Chinese electric vehicle (EV) manufacturer Guangzhou Xiaopeng Motors Technology Company Ltd (Xpeng) has agreed to acquire the smart EV technology development business of local ride hailing company Didi Chuxing Technology Company (Didi).
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Didi agreed to sell its smart EV technology unit in exchange for US$744m worth of shares in Xpeng. The deal is expected to be completed in stages, with Didi set to receive additional shares depending on the success of the business – for a maximum stake in Xpeng of 3.25%. Under the agreement, Didi is not allowed to sell its shares in Xpeng for at least two years after the initial deal is finalised.
Why it matters
Didi has invested heavily in developing autonomous driving technologies for robotaxis and private EVs over the last several years, with mixed results so far. The company launched a robotaxi service in restricted areas of Shanghai in 2020.
The two companies have also agreed to collaborate in marketing, financial and insurance services, charging networks, robotaxis and international expansion. Xpeng said the partnership with Didi aims to “promote the global application of smart electric vehicles and technologies.”
The move comes just one month after German automaker Volkswagen Group announced a US$700m investment in a 5% stake in Xpeng, with a view to establishing a strategic partnership. The two companies have agreed to collaborate in the development of two new EV models for sale under the Volkswagen brand in China by 2026.
Xpeng already offers some of the most advanced assisted driving technologies in China.
Xpeng also revealed it plans to launch a new mass market EV brand in China under a project codenamed “Mona”, with the first model scheduled to be launched next year with a targeted price tag of CNY150,000 (US$20,600) compared with at least CNY200,000 for current Xpeng models.
Xpeng shares rose by over 13% in Hong Kong trading on Monday morning on the news.
GlobalData analyst Al Bedwell said the move is expected to strengthen the EV maker’s next generation EV capabilities. “It reinforces Xpeng’s technical capabilities and its position as a future technology partner for Volkswagen in China.”
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