Chinese language electrical car upstart Xpeng is buying the good EV belongings of trip hailing large Didi for $744 million, marking one other vital alliance that the Tesla challenger has struck in latest months.
In an announcement on Monday, Didi mentioned the duo is forming a strategic partnership to “promote the worldwide utility of good electrical autos and applied sciences.”
Notably, the Didi belongings will grow to be a brand new sub-brand known as “Mona” below Xpeng, which is scheduled to launch in 2024. The partnership additionally extends to areas together with advertising, monetary insurance coverage companies, charging and worldwide growth.
The information adopted on the heels of Volkswagen’s $700 million funding in Xpeng which might see the manufacturing of two new fashions below the Volkswagen model using XPeng’s key ADAS applied sciences.
Xpeng’s mass market ambitions
Regardless of spending closely on R&D, Xpeng’s EV adoption stays fairly restricted, making up simply 2.1% of China’s new power car market (together with hybrids) in 2022. A partnership with Didi may doubtlessly assist it faucet tons of of tens of millions of customers in China.
For the 12 months ended Q1 2023, Didi recorded 587 million energetic customers. Think about that these passengers, when choosing their trip on the Didi platform, see Xpeng’s Mona mannequin s displayed as a most popular possibility sooner or later. Moreover, Didi’s footprint reaches past China with its acquisition of the Brazilian rideshare firm 99 again in 2018, which has given it a lift in Latin America.
Certainly, Xpeng acknowledged in its submitting with Hong Kong’s securities authority that the partnership “will improve the Firm [Xpeng]’s model publicity and buyer attain by means of the Vendor [Didi]’s platform, which can in flip lead to extra enterprise leads and unfold enterprise alternatives for the Firm in new worldwide markets.”
Didi’s carmaking dream
Like Uber, Didi has through the years fashioned partnerships with main auto OEMs. That included one with Volvo, the place it agreed to produce autonomous driving know-how to energy robotaxi fleets provided by the producer. Shedding its good automobile enterprise means Didi has given up a part of its carmaking dream.
The rideshare titan has been slowly climbing out from below the darkish cloud following a collection of regulatory crackdown. At this stage, the place its precedence might be to strengthen its dominance in China’s ride-sharing market, promoting the money-hemorrhaging, assets-heavy EV enterprise to an trade associate doesn’t look like a nasty concept.
The remaining query is whether or not Didi and Xpeng will be a part of forces within the autonomous car realm. Xpeng itself has a big AV group, having been essentially the most aggressive EV participant in China when it comes to software program growth funding. And there’s no signal of slowdown in a part of the enterprise regardless of the latest lack of its AV head. The seas of driving knowledge gleaned by Didi’s platform little doubt might be a useful asset for Xpeng in coaching its autonomous driving algorithms.
Extra to return — this can be a growing story…