XPeng Acquires DiDi's Smart Vehicle Unit
Chinese electric-vehicle start-up XPeng acquires DiDi's smart vehicle unit in a deal valued at $744 million, while planning to launch a new affordable EV brand.
Shares of Chinese electric-vehicle start-up XPeng soared after the company announced its acquisition of ride-hailing app DiDi Global's smart vehicle unit. The ambitious deal, valued at up to 5.8 billion Hong Kong dollars (approximately $744 million), will result in DiDi receiving a 3.25% stake in XPeng. Additionally, as part of their strategic partnership, XPeng plans to launch a new EV brand named "MONA" in 2024. The brand's development includes the launch of an A-class smart EV model next year, with support from DiDi's mobility ecosystem and access to its nationwide mobility market.
The new EV brand by XPeng will specifically target the mass market segment, offering affordable options with a price range of around 150,000 Chinese yuan (approximately $21,000). The aim is to bring electric vehicles within reach for a larger consumer base.
XPeng's American depositary receipts (ADRs) experienced a significant boost in trading, increasing by 5% in premarket trading on Monday to $17.53. Meanwhile, its Hong Kong shares closed with an 11% gain. This surge follows a year of remarkable growth, with XPeng's ADRs rising by 76% so far in 2023. The company has been the primary driver behind these gains.
Despite the recent acceleration of price cuts for EVs in China, XPeng's ADRs have remained strong. While some other EV makers have seen their shares decline due to lower pricing, XPeng has sustained steady growth. BYD, the largest maker of battery electric vehicles in China, experienced a 4% decline in shares over the past three months.
With its strategic acquisitions and partnerships, XPeng is positioning itself as a prominent player in the Chinese EV market. The company's continued growth and expansion plans indicate a promising future for this emerging industry.