Chinese electric vehicle (EV) maker Xpeng has announced its acquisition of Didi’s EV development business for a total of USD744m, as reported by Reuters on August 28. The deal involves Xpeng issuing shares worth USD744m and transferring a 3.25% stake of its enlarged capital to Didi. Additionally, the two companies are set to collaborate on the launch of a new mass-market brand named Mona in 2024. The partnership will extend into various areas, including marketing, financial services, and insurance. It’s worth noting that Xpeng’s acquisition of Didi’s EV business comes shortly after a USD700m investment in Xpeng by German automaker Volkswagen , with a plan to jointly develop EVs for the Chinese market.

Xpeng’s acquisition of Didi presents several strategic benefits for Xpeng. By utilizing Didi’s well-established ride-hailing platform, Xpeng can promote its electric vehicles more effectively and access valuable data from Didi’s mobility services to enhance its autonomous driving algorithms. The move could potentially strengthen Xpeng’s position in China’s competitive EV market. For Didi, divesting its EV development business aligns with the company’s recent efforts to streamline its operations and focus on its core ride-hailing business. The EV industry in China has become increasingly crowded, and Didi’s divestiture of its EV business could help it mitigate risks and focus on areas where it has a strong presence and expertise.

Sources:

https://www.reuters.com/markets/deals/chinas-xpeng-take-over-didis-autonomus-vehicle-unit-eyeing-2024-launch-2023-08-28/

https://www.scmp.com/business/china-business/article/3232529/chinese-ride-hailing-giant-didi-global-sells-its-ev-unit-xpeng-two-plan-launch-mass-market-brand

https://techcrunch.com/2023/08/27/teslas-china-rival-xpeng-buys-ride-hailing-giant-didis-smart-ev-assets-for-744m/