XPeng acquires competitor's subsidiary for $740M

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【Summary】Chinese EV startup XPeng is set to acquire the EV division of ride-hailing service Didi for over $740 million, allowing XPeng to eliminate a potential competitor and gain access to advanced technology. XPeng will also partner with Didi to launch a new brand of electric vehicles. The deal was well-received by the market, with XPeng shares rising by almost 13%. China aims to have the majority of car sales be electric and hybrid by 2035, driving the boom in EVs and attracting companies like XPeng.

FutureCar Staff Aug 30, 2023 9:32 AM PT

XPeng acquires competitor's subsidiary for $740M

Chinese electric car company XPeng has announced its plans to acquire the electric vehicle (EV) division of ride-hailing service Didi and launch a new brand of vehicles. The company will be spending over $740 million on this venture. XPeng, founded in 2015 in Guangdong province, is among the many Chinese startups that have emerged in recent years to capitalize on the growing demand for electric vehicles in the world's largest auto market.

Didi, China's leading car-hailing app, also operates a subsidiary that designs electric vehicles. XPeng has reached a deal with Didi to purchase this subsidiary for $744 million, according to a filing with the Hong Kong Stock Exchange. Additionally, XPeng will be partnering with Didi to introduce a new brand of electric vehicles in the coming year.

The market has responded positively to this deal, as it allows XPeng to eliminate a potential competitor and gain access to advanced technology. As a result, XPeng shares saw an increase of almost 13% on Monday morning. XPeng, which also sells some of its products in Europe, currently employs around 14,400 people and has offices in Silicon Valley and Amsterdam.

In terms of sales, XPeng sold 41,435 vehicles in the first half of 2023, representing a 40% decrease compared to the previous year, as reported in the company's recent results. China, being the largest emitter of greenhouse gases, aims to have the majority of car sales be electric and hybrid vehicles by 2035. Generous purchase subsidies have contributed to the surge in EV sales in recent years, with companies like BYD, Nio, and XPeng leading the way.