Chinese electric vehicle manufacturer XPeng on Monday hit the initial closing of its acquisition of ride-hailing firm Didi’s smart auto development business.
Xpeng announced on August 27 that it will acquire Xiaoju Smart Auto and its subsidiaries — the EV unit that develops, designs and engineers the smart EV model under DiDi in a deal valued as much as $744 million, per its exchange filing.
The firms will form a strategic partnership that enables them to cooperate in ride-sharing, marketing, promotion of financial and insurance services, smart EV charging, robotaxi, and expansion into international markets, according to the filing.
Xpeng also plans to launch a new EV brand in 2024. The brand named “MONA” will tap the mass market segment with a price range of 150,000 yuan ($20,564.9), as well as launching an A-class smart EV model in 2024 as the debut product.
After the initial close, Xiaoju Smart Auto and its subsidiaries have become a wholly-owned subsidiary of Xpeng. Meanwhile, Didi will take a 3.25% stake in Xpeng under the deal.
The news comes at a time when a slew of EV brands in the world’s largest EV market are paring down prices amid weakening demand.
In January, US electric car maker Tesla cut prices for all of its Model 3 and Model Y cars in China by around 6-13.5%, according to Reuters’ calculations. This has prompted at least 40 auto brands operating in China to follow suit and join the price war, according to a report by local market research firm Daxue Consulting.
EV sales in China went up 29% year-to-date in September; compared to the 34% growth for the global EV market during the same period, per Reuters, citing data from market research firm Rho Motion.