Xpeng, the Chinese competitor to Tesla, acquires Didi for $744m
Chinese electric vehicle startup Xpeng is set to acquire Didi's smart EV assets for $744 million, signaling another significant partnership in the ongoing competition against Tesla. Didi, the ride-hailing giant, announced the collaboration on Monday, revealing their intention to jointly advance the global adoption of smart electric vehicles and related technologies.
One noteworthy aspect is that the acquired Didi assets will be established as a fresh sub-brand named "Mona" under Xpeng's umbrella. The official launch of Mona is planned for 2024. This partnership goes beyond asset acquisition and also covers domains such as marketing, financial insurance services, charging infrastructure, and international expansion.
This development comes shortly after Volkswagen's investment of $700 million in Xpeng. This investment will lead to the creation of two new vehicle models under Volkswagen's brand, leveraging Xpeng's core Advanced Driver Assistance Systems (ADAS) technologies.
Xpeng's quest for broader market reach is evident. Despite substantial investment in research and development, its electric vehicle market share in China, including hybrids, stood at just 2.1% in 2022. The partnership with Didi holds the potential to tap into Didi's vast user base, which reached 587 million active users in the 12 months leading up to Q1 2023. The strategic integration of Xpeng's "Mona" model as a preferred option for these users when selecting rides on the Didi platform could be a game-changer.
Moreover, Didi's influence extends beyond China, thanks to its acquisition of the Brazilian rideshare company 99 in 2018, enhancing its presence in Latin America. Xpeng recognizes that this partnership will significantly elevate its brand exposure and customer reach, opening doors to new international markets.
Didi's aspirations in the car manufacturing domain have been notable, having formed alliances with major auto OEMs similar to Uber. However, the divestiture of its smart car business signifies a strategic shift, as Didi navigates regulatory challenges and aims to consolidate its dominance in China's ride-sharing sector.
The question of potential collaboration between Didi and Xpeng in the realm of autonomous vehicles remains open. Xpeng boasts a substantial autonomous vehicle team, marked by significant investment in software development, making it one of the most aggressive players in China. Despite the departure of its AV head, the momentum in this sector remains strong. Didi's wealth of driving data could prove invaluable in refining Xpeng's autonomous driving algorithms.
