Chinese electric vehicle (EV) manufacturer Xpeng (XPEV) has joined forces with mobility and ride-sharing behemoth Didi in a momentous development pact worth a staggering $744 million (HK $5.84 billion). The groundbreaking collaboration unites two of China’s foremost technological giants, with the deal structured entirely in stock transactions. As part of the arrangement, Didi will secure a 3.25% ownership stake in Xpeng, while Xpeng will acquire EV and autonomous assets from Didi.
The pivotal agreement paves the way for the launch of an innovative “Smart EV” brand named Project ‘MONA’, borne out of the partnership between Xpeng and Didi. Under this visionary initiative, the companies are poised to introduce electric vehicles with an accessible price point of around 150,000 yuan, equivalent to approximately $20,000. The inaugural addition to the Smart EV lineup will manifest as an A-class vehicle, tailored for urban mobility and efficiency, with its debut scheduled for the year 2024.
Exemplifying an unparalleled synergy, Xpeng’s newly minted Smart EVs will bask in the comprehensive support of the DiDi ecosystem, thereby gaining an unprecedented edge within the competitive automotive market. He Xiaopeng, the resolute CEO and Chairman of Xpeng, underlined the broader implications of the collaboration, expressing his conviction that the new brand and its A-class products will not only invigorate scale but also expedite the assimilation of Smart EV technologies among a broader demographic, thereby democratizing advanced automotive solutions.
This strategic alliance signals a poignant milestone for Xpeng, a mere month after its strategic partnership with Volkswagen. The Volkswagen consortium’s substantial $700 million investment equates to Xpeng’s commitment to engineer B-class EVs for the esteemed German automaker’s Chinese domestic market. This duo of collaborations underscores Xpeng’s concerted efforts to pioneer innovation and solidify its stance within the EV industry.
For Didi, this entente provides a strategic avenue to invigorate its EV and autonomous pursuits following the challenges encountered in the preceding year. Industry analysts at Jefferies responded positively to the development, reiterating their “buy” recommendation for Xpeng’s stock and revising the price target to an optimistic $25.30. This commendation coincided with an immediate upswing in Xpeng’s New York Stock Exchange (NYSE) listing, with shares climbing by nearly 3% in the early trading hours.
The accord culminates as the most recent entry in a succession of remarkable strides within the Chinese EV realm. The combined forces of Xpeng and Didi augur an exciting trajectory for the industry, underscoring the nation’s prowess in driving electric mobility innovations. As China positions itself at the vanguard of the global EV revolution, the partnership’s ripple effects are anticipated to reverberate far beyond the confines of the industry, resonating as a testament to the potency of collaboration and innovation on a national and global scale.
Source: Yahoo Finance
