Tesla’s success in China is a surprise for the country’s own exporters. Its aggressive price cuts have made it highly competitive and it will continue to dominate rankings, at least in the short term. Now Geely has decided to fight back with its own premium electric models.

Tesla’s Model 3 was the best-selling electric car in China last year. The US group has held on to its lead this year. The Model 3 and Model Y were the second and third most popular cars with buyers last month. Local makers have struggled to keep up. Indeed, Geely’s plans for its premium EV brand, Zeekr, underscore the fact that its current model line-up can do little more against Tesla.

The strategy makes sense. Geely, which holds a 9.7 per cent stake in Daimler and owns Volvo Cars, has form in the premium segment. China accounts for about a fifth of global luxury demand. The trend of buyers trading up remains strong.