Chinese language electrical car upstart Xpeng is buying the good EV belongings of journey 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 stated the duo is forming a strategic partnership to “promote the worldwide software of good electrical autos and applied sciences.”
Notably, the Didi belongings will develop into 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 providers, charging and worldwide enlargement.
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 might probably assist it faucet a whole lot of hundreds of thousands of customers in China.
For the 12 months ended Q1 2023, Didi recorded 587 million lively customers. Think about that these passengers, when choosing their journey on the Didi platform, see Xpeng’s Mona mannequin s displayed as a most well-liked 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 enhance the Firm [Xpeng]’s model publicity and buyer attain by way 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 shaped partnerships with main auto OEMs. That included one with Volvo, the place it agreed to produce autonomous driving expertise to energy robotaxi fleets provided by the producer. Shedding its good automotive 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 sequence 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 business accomplice doesn’t look like a nasty thought.
The remaining query is whether or not Didi and Xpeng will be part of forces within the autonomous car realm. Xpeng itself has a big AV workforce, having been essentially the most aggressive EV participant in China when it comes to software program improvement 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 question may very well be a useful asset for Xpeng in coaching its autonomous driving algorithms.
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