Chinese electric vehicle (EV) upstart Xpeng has made a strategic move by acquiring the smart EV assets of ride-hailing giant Didi in a deal worth $744 million. This partnership aims to bolster Xpeng’s position in the competitive EV market and tap into a larger user base.
Under the agreement, the Didi assets will be rebranded as “Mona” and will operate as a new sub-brand under Xpeng. The Mona brand is expected to launch in 2024, offering customers a range of smart EV options.
In addition to the acquisition, the partnership between Xpeng and Didi extends to various other areas, including marketing, financial insurance services, charging infrastructure, and international expansion. This collaboration will enable both companies to leverage their expertise and resources to further develop their respective businesses.
Xpeng’s market share in the EV industry remains relatively small, accounting for just 2.1% of China’s new energy vehicle market in 2022. However, with this strategic partnership, the company aims to significantly expand its reach and attract more customers.
Didi’s recent acquisition of Brazilian rideshare company 99 also plays a crucial role in this partnership. By expanding its operations beyond China, Didi is expected to benefit Xpeng’s international expansion plans. This broader geographic footprint will provide Xpeng with access to new markets and potential customers.
Didi has previously established partnerships with major automobile original equipment manufacturers (OEMs), much like Uber. However, shedding its smart car business as part of this deal means relinquishing a significant portion of its carmaking ambitions.
One lingering question is whether Didi and Xpeng will collaborate in the autonomous vehicle (AV) sector. Both companies have made substantial investments in AV technology, and a joint effort in this field could lead to significant breakthroughs and advancements.
Overall, this acquisition and partnership between Xpeng and Didi represent a strategic move to strengthen their positions in the EV market. The merging of resources and expertise is expected to drive growth for both companies, expand their market share, and potentially pave the way for future collaborations in the exciting realm of autonomous vehicles.
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