With the infusion of assets and insights from Didi, Xpeng is seizing the opportunity to develop an affordable electric car under a new mass market brand, codenamed “MONA”.
Renowned Chinese electric car manufacturer XPeng Inc (HK: 9868) has witnessed its shares rise to 13% within hours of announcing its intention to acquire Didi‘s smart electric car development business.
This groundbreaking deal, valued at an impressive $744 million, is set to reshape the landscape of both the EV and ride-hailing sectors. Xpeng’s acquisition of Didi’s smart electric car development division represents a strategic convergence of two major stakeholders in China’s transportation ecosystem.
Xpeng, known for its revolutionary Electric Vehicles (EVs), has been steadily making strides in the EV market, winning a reputation for technology breakthroughs and a customer-centric strategy. Didi, on the other hand, has established itself as a top ride-hailing startup, dubbed the “Uber of China”.
Under this agreement, Didi is set to become a strategic shareholder of Xpeng. This investment not only provides Xpeng with a substantial financial boost but also opens the door to a range of collaborative opportunities.
The companies are keen to collaborate on various fronts, including marketing, financial and insurance services, charging infrastructure, autonomous “robotaxi” technology, and even international expansion.
Xpeng Plan to Introduce a Mass Market Electric Car
With the infusion of assets and insights from Didi, Xpeng is seizing the opportunity to develop an affordable electric car under a new mass market brand, codenamed “MONA”.
The launch of the “MONA” brand, aimed at the 150,000 Yuan ($20,580) price range, marks a shift in Xpeng’s market approach. While Xpeng’s previous lineup is normally priced in the 200,000 Yuan range and higher, this new brand aims to introduce the benefits of EVs to a wider audience.
The deal between Xpeng and Didi is not a straightforward transaction, but rather a multi-staged endeavor with built-in performance benchmarks. According to the terms, Didi will receive additional shares in Xpeng if the new mass-market car brand, born from this partnership, achieves commendable success.
This performance-based structure adds an element of risk-sharing and aligns the interests of both parties in ensuring the venture’s prosperity. Didi stands to obtain a total of 3.25% share in Xpeng if the new mass-market EV brand receives favorable market acceptance and large sales statistics.
It is worth noting that Xpeng’s collaboration with Didi is not its only strategic move. The company’s partnership with German auto giant Volkswagen Group (ETR: VOW3) is equally noteworthy. This joint effort aims to develop two new electric cars specifically tailored for the Chinese market under the VW brand.
This alliance is projected to introduce these vehicles by 2026, reflecting the companies’ shared commitment to harnessing China’s EV potential. The Volkswagen-Xpeng collaboration also includes a financial aspect, with Volkswagen’s planned investment of around $700 million in Xpeng. In exchange for this investment, Volkswagen secures a 4.99% stake in Xpeng, further solidifying the ties between these two automotive powerhouses.
Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.
