Didi launched a free robotaxi service in elements of Shanghai in 2020.
Vcg | Visible China Group | Getty Photographs
BEIJING — Chinese language electrical automotive firm Xpeng stated Monday it’s shopping for Didi’s good electrical automotive growth enterprise in an trade of shares value $744 million.
The Chinese language ride-hailing firm will turn out to be a strategic shareholder of Xpeng, and the 2 corporations want to cooperate in advertising and marketing, monetary and insurance coverage providers, charging, robotaxis and worldwide growth. That is in response to releases from each corporations.
Xpeng shares rose greater than 13% in Hong Kong buying and selling as of Monday morning.
With the strategic partnership and new property from Didi, Xpeng stated it plans to develop an electrical automotive for launch subsequent yr underneath a brand new mass market model that can goal the 150,000 yuan ($20,580) worth vary.
Xpeng’s automobiles sometimes promote for round 200,000 yuan or extra. The brand new model, developed underneath the challenge identify “MONA,” is ready to be completely different from that of Xpeng.
The startup’s cope with Didi comes as many corporations search for methods to seize a slice of China’s rising however extremely aggressive electrical automotive market.
In late July, Xpeng and German auto big Volkswagen signed a deal to develop two new electrical automobiles for China underneath the VW model, that is set to launch in 2026.
Underneath the settlement, Volkswagen plans to speculate about $700 million in Xpeng for a 4.99% stake.
Nonetheless working at a loss
The offers come as conventional auto giants have the money that electrical automotive startups lack.
Earlier this month, Xpeng reported second-quarter internet loss 2.8 billion yuan ($384.5 million) — a wider loss than analysts anticipated and the largest quarterly loss for the reason that firm went public three years in the past.
Xpeng gives among the most superior assisted driving expertise out there to drivers in China. However the startup’s month-to-month automotive deliveries have remained low versus rivals’ reminiscent of BYD and Li Auto.
The Didi electrical automotive enterprise — held by a subsidiary referred to as Da Vinci Auto Co. — has additionally racked up losses. These for 2022 greater than tripled from the prior yr to 2.64 billion yuan, in response to a Hong Kong inventory trade submitting. The unit had internet property of 937 million yuan as of June 30.
These monetary outcomes are set to be consolidated into Xpeng’s monetary statements after the preliminary deal, the submitting stated.
The deal is anticipated to be accomplished in levels, with Didi set to obtain extra shares if the brand new mass market automotive model does effectively for an anticipated whole 3.25% stake in Xpeng.
Underneath the settlement, Didi can not promote the shares for 2 years after the preliminary closing of the deal.
The strategic cooperation settlement is ready to final for not less than 5 years.
Didi itself has tried to develop robotaxis and electrical autos, amid enterprise setbacks within the final two years.
The ride-hailing big delisted from the New York Inventory Trade simply months after going public in 2021, and went by way of a now-concluded authorities probe. Whereas the inventory stays tradeable over-the-counter, plans for an anticipated Hong Kong itemizing stay unclear.
— CNBC’s John Rosevear and Arjun Kharpal contributed to this report.