Xpeng acquires Didi's smart EV assets for $744 million in a strategic partnership

Didi also benefits from freeing itself up to focus on its core ride-hailing business.

Chinese electric vehicle (EV) manufacturer Xpeng is acquiring and forming a strategic partnership with the smart EV assets of ride-hailing giant Didi for $744m. These assets will become a new sub-brand called "Mona" under Xpeng, launching in 2024. The partnership will also include marketing, financial insurance services, charging and international expansion. Xpeng has previously formed another significant alliance with Volkswagen, benefiting from its $700m investment and its key ADAS technologies. Xpeng's EVs comprises just 2.1% of China's new energy vehicle market, but the Didi partnership could enable the company to tap into hundreds of millions of users.

Didi has in recent years formed partnerships with major automotive OEMs, including Volvo, but the sale of its smart EV assets is part of Didi's refocusing after a period of regulatory crackdown. An unanswered question is whether Didi and Xpeng will join forces in the autonomous vehicle realm, with autonomous driving algorithms potentially benefiting from Didi's platform and its driving data. The Didi-Xpeng partnership presents a new opportunity for Xpeng to leverage Didi's vast pool of users and expand further beyond China. Didi also benefits from freeing itself up to focus on its core ride-hailing business. The partnership will enhance Xpeng's brand exposure and customer reach and lead to new global business opportunities.