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Chinese electric vehicle upstart Xpeng is acquiring the smart EV assets of ride hailing giant Didi for $744 million, marking another significant alliance that the Tesla challenger has struck in recent months.<\/p>\n
In an announcement on Monday, Didi said<\/a> the duo is forming a strategic partnership to \u201cpromote the global application of smart electric vehicles and technologies.\u201d<\/p>\n Notably, the Didi assets will become a new sub-brand called \u201cMona\u201d under Xpeng, which is scheduled to launch in 2024.\u00a0The partnership also extends to areas including marketing, financial insurance services, charging and international expansion.<\/p>\n The news followed on the heels of Volkswagen\u2019s $700 million investment in Xpeng<\/a> which would see the production of two new models under the Volkswagen brand utilizing XPeng\u2019s key ADAS technologies.<\/p>\n Despite spending heavily on R&D, Xpeng\u2019s EV adoption remains quite limited, making up just 2.1% of China\u2019s new energy vehicle market<\/a> (including hybrids) in 2022. A partnership with Didi could potentially help it tap hundreds of millions of users in China.<\/p>\n For the 12 months ended Q1 2023, Didi recorded<\/a> 587 million active users. Imagine that these passengers, when picking their ride on the Didi platform, see Xpeng\u2019s Mona model served up as a preferred option in the future. Didi\u2019s footprint reaches beyond China with its acquisition of the Brazilian rideshare company 99<\/a> back in 2018, which has given it a boost in Latin America.<\/p>\n Indeed, Xpeng acknowledges in its filing with Hong Kong\u2019s securities authority that the partnership \u201cwill increase the Company [Xpeng]\u2019s brand exposure and customer reach through the Seller\u2019s platform, which will in turn result in more business leads and unfold business opportunities for the Company in new international markets.\u201d<\/p>\n Like Uber, Didi has over the years formed partnerships with major auto markers, including Volvo<\/a>, where it supplies autonomous driving technology to power fleets supplied by the manufacturers. Shedding its smart car business means Didi has, at least for now, given up on its manufacturing dream.<\/p>\n The rideshare titan has been slowly climbing out from under the dark cloud<\/a> following a series of regulatory crackdown. At this stage, where its priority is probably to strengthen its dominance in China\u2019s ride-sharing market, selling the money-hemorrhaging, assets-heavy EV business to an industry partner doesn\u2019t seem like a bad idea.<\/span><\/p>\n The remaining question is whether Didi and Xpeng will join forces in the autonomous vehicle realm. Xpeng itself has a large AV team, having been the most aggressive EV player in China in terms of its software development capabilities. And there\u2019s no sign of it slowing down that part of the business despite the recent loss of its AV head<\/a>. The seas of driving data gleaned by Didi\u2019s platform no doubt could be an invaluable asset for Xpeng.<\/p>\nXpeng\u2019s mass market ambitions<\/h2>\n
Didi\u2019s carmaking dream<\/h2>\n