Chinese electric vehicle (EV) maker Xpeng plans to acquire ride-hailing giant DiDi Global’s smart EV unit, and the two firms will form a strategic partnership to launch a new brand next year, Xpeng said in a statement Sunday.
According to the deal, Xpeng will issue its 3.25% of Class A ordinary shares to acquire DiDi’s Smart EV project assets, resulting in DiDi becoming a strategic stakeholder of the EV maker, with a lock-up period of 24 months after the initial closing.
Although the Chinese EV maker did not provide the transaction amount, a Reuters report said the likely maximum deal value of the acquisition is $744 million, including potential milestone payments.
Xpeng added that it plans to launch an A-class Smart EV brand next year, “currently being developed under the project name MONA to expand in the mass market of $20,594 (150,000 Chinese yuan) price range.”
The project, which will speed up the adoption of Smart EVs and technologies in this segment, will accelerate Guangzhou-headquartered XPeng's sales growth and support greater economies of scale, added the statement.
According to Xpeng, the proposed model will be different from Xpeng-branded products, and DiDi will provide support from its mobility ecosystem for the MONA project with access to its nationwide shared mobility market.
The deal stipulates performance-based incentive mechanisms in line with the mass production of MONA and fulfilling of sales targets by DiDi, which would help DiDi receive share-based incentives.
Both Chinese firms will also explore strategic cooperation in several areas, including marketing, financial and insurance services, charging, Robotaxi, and international market expansion.
"Xpeng's A-class Smart EV products under the new brand will not only significantly increase our scale but also accelerate the adoption of our Smart EV technologies in the mass market segment, bringing our technologies to a much broader customer base," He Xiaopeng, chairman and CEO of Xpeng, said in the statement.
The announcement boosted Xpeng shares in Hong Kong trading by 12.9% as of 7:59 a.m. GST Monday. Xpeng went public in the US by floating American Depositary shares (ADS) in 2020, and now its shares are traded on Hong Kong and New York bourses.
Xpeng, cofounded by billiore He Xiaopeng, designs, manufactures, and markets smart EVs that appeal to the large and growinaing base of technology-savvy middle-class consumers, while DiDi Global offers a range of app-based services across Asia Pacific, Latin America, and other global markets.
"Xpeng's A-class Smart EV products under the new brand will not only significantly increase our scale but also accelerate the adoption of our Smart EV technologies in the mass market segment, bringing our technologies to a much broader customer base," He Xiaopeng, chairman and CEO of Xpeng, said in the statement.
