Chinese ride-hailing firm Didi Global sells its EV unit to Xpeng as the two plan to launch a mass-market brand in 2024
- Guangzhou-based Xpeng will issue shares worth HK$5.84 billion (US$744 million), according to filings, giving Didi a 3.25 per cent stake in the firm
- The deal allows Xpeng to take advantage of Didi’s business platforms for promotion while helping Didi dodge the cutthroat EV market, analyst says
“The Chinese EV market has great potential, but latecomers now have slim chances of making a success due to fierce competition,” said Cao Hua, a partner at Shanghai-based private equity firm Unity Asset Management, which invests in vehicle supply-chain firms. “The deal enables Xpeng to take advantage of Didi’s business platforms to promote its vehicles while helping Didi dodge the cutthroat market before its designed models go into production.”
Xpeng jumped 10.9 per cent to HK$72.20 in Hong Kong in a bullish market as the Hang Seng Index logged a 1 per cent gain. Didi declined 2.2 per cent to US$3.17 in over-the-counter trading in New York on Friday.
Didi will continue to “deepen our cooperation with Xpeng in multiple areas, driving transformation of the transportation and automotive industries”, Cheng Wei, chairman and CEO of Didi, said in a statement on Monday.
He Xiaopeng, Xpeng’s co-founder and CEO, said the EV start-up will explore working with Didi in certain fields such as marketing, insurance service, charging, robotic taxis and international expansion as the two pursue a leading position in the future of mobility.