Didi launched a free robotaxi service in components of Shanghai in 2020.
Vcg | Visual China Group | Getty Images
BEIJING — Chinese electrical automobile firm Xpeng mentioned Monday it’s shopping for Didi’s good electrical automobile growth enterprise in an alternate of shares value $744 million.
The Chinese ride-hailing firm will turn out to be a strategic shareholder of Xpeng, and the 2 firms want to cooperate in advertising, monetary and insurance coverage providers, charging, robotaxis and worldwide growth. That’s in keeping with releases from each firms.
Xpeng shares rose greater than 13% in Hong Kong buying and selling as of Monday morning.
With the strategic partnership and new belongings from Didi, Xpeng mentioned it plans to develop an electrical automobile for launch subsequent yr underneath a brand new mass market model that can goal the 150,000 yuan ($20,580) value vary.
Xpeng’s vehicles usually promote for round 200,000 yuan or extra. The new model, developed underneath the venture identify “MONA,” is about to be totally different from that of Xpeng.
The startup’s take care of Didi comes as many firms search for methods to seize a slice of China’s rising however extremely aggressive electrical automobile market.
In late July, Xpeng and German auto big Volkswagen signed a deal to develop two new electrical vehicles for China underneath the VW model, that is set to launch in 2026.
Under the settlement, Volkswagen plans to speculate about $700 million in Xpeng for a 4.99% stake.
Still working at a loss
The offers come as conventional auto giants have the money that electrical automobile startups lack.
Earlier this month, Xpeng reported second-quarter web loss 2.8 billion yuan ($384.5 million) — a wider loss than analysts anticipated and the most important quarterly loss because the firm went public three years in the past.
Xpeng gives a number of the most superior assisted driving know-how accessible to drivers in China. But the startup’s month-to-month automobile deliveries have remained low versus rivals’ comparable to BYD and Li Auto.
The Didi electrical automobile enterprise — held by a subsidiary known as Da Vinci Auto Co. — has additionally racked up losses. Those for 2022 greater than tripled from the prior yr to 2.64 billion yuan, in keeping with a Hong Kong inventory alternate submitting. The unit had web belongings of 937 million yuan as of June 30.
Those monetary outcomes are set to be consolidated into Xpeng’s monetary statements after the preliminary deal, the submitting mentioned.
The deal is predicted to be accomplished in phases, with Didi set to obtain extra shares if the brand new mass market automobile model does effectively for an anticipated complete 3.25% stake in Xpeng.
Under the settlement, Didi can’t promote the shares for 2 years after the preliminary closing of the deal.
The strategic cooperation settlement is about to final for not less than 5 years.
Didi itself has tried to develop robotaxis and electrical autos, amid enterprise setbacks within the final two years.
The ride-hailing big delisted from the New York Stock Exchange simply months after going public in 2021, and went via a now-concluded authorities probe. While the inventory stays tradeable over-the-counter, plans for an anticipated Hong Kong itemizing stay unclear.
— CNBC’s John Rosevear and Arjun Kharpal contributed to this report.
Source: www.cnbc.com”