Didi launched a no cost robotaxi assistance in pieces of Shanghai in 2020.
Vcg | Visible China Team | Getty Pictures
BEIJING — Chinese electrical auto corporation Xpeng mentioned Monday it is purchasing Didi’s intelligent electric powered car growth enterprise in an exchange of shares well worth $744 million.
The Chinese trip-hailing business will become a strategic shareholder of Xpeng, and the two firms are searching to cooperate in promoting, monetary and insurance policies services, charging, robotaxis and global growth. Which is according to releases from both equally businesses.
Xpeng shares rose additional than 13% in Hong Kong buying and selling as of Monday early morning.
With the strategic partnership and new property from Didi, Xpeng said it strategies to establish an electrical motor vehicle for start subsequent calendar year below a new mass market place brand that will focus on the 150,000 yuan ($20,580) rate variety.
Xpeng’s automobiles ordinarily provide for close to 200,000 yuan or a lot more. The new model, developed underneath the task identify “MONA,” is set to be distinctive from that of Xpeng.
The startup’s offer with Didi will come as quite a few firms glimpse for techniques to seize a slice of China’s expanding but very aggressive electrical motor vehicle market place.
In late July, Xpeng and German auto huge Volkswagen signed a deal to acquire two new electric powered automobiles for China under the VW brand name, that’s established to start in 2026.
Less than the arrangement, Volkswagen plans to make investments about $700 million in Xpeng for a 4.99% stake.
Continue to functioning at a decline
The offers come as conventional car giants have the funds that electric powered car startups lack.
Previously this thirty day period, Xpeng described second-quarter web reduction 2.8 billion yuan ($384.5 million) — a wider reduction than analysts anticipated and the largest quarterly decline because the company went public three decades ago.
Xpeng gives some of the most sophisticated assisted driving engineering readily available to drivers in China. But the startup’s month-to-month car or truck deliveries have remained very low compared to competitors’ these kinds of as BYD and Li Automobile.
The Didi electric powered motor vehicle enterprise — held by a subsidiary termed Da Vinci Vehicle Co. — has also racked up losses. Those for 2022 extra than tripled from the prior yr to 2.64 billion yuan, according to a Hong Kong stock trade filing. The unit experienced web assets of 937 million yuan as of June 30.
These economical success are established to be consolidated into Xpeng’s financial statements following the initial offer, the submitting stated.
The deal is envisioned to be completed in stages, with Didi established to obtain much more shares if the new mass industry car model does nicely for an predicted full 3.25% stake in Xpeng.
Under the arrangement, Didi can’t offer the shares for two years right after the preliminary closing of the offer.
The strategic cooperation agreement is established to very last for at minimum five years.
Didi by itself has tried using to produce robotaxis and electric vehicles, amid organization setbacks in the final two a long time.
The journey-hailing giant delisted from the New York Inventory Exchange just months right after heading general public in 2021, and went via a now-concluded authorities probe. While the inventory continues to be tradeable about-the-counter, options for an anticipated Hong Kong listing continue to be unclear.
— CNBC’s John Rosevear and Arjun Kharpal contributed to this report.