XPeng acquires competitor's subsidiary for more than $740M

author: FutureCar Staff    

XPeng, a Chinese electric car company, has announced its plan to acquire the electric vehicle (EV) division of ride-hailing service Didi and launch a new brand of vehicles. The company, founded in Guangdong in 2015, is among the many Chinese startups that have emerged in recent years to capitalize on the growing electric vehicle market in China.

Didi, China's leading car-hailing app, also operates a subsidiary focused on designing electric vehicles. XPeng has reached a deal with Didi to purchase this subsidiary for $744 million, as stated in a filing to the Hong Kong Stock Exchange where XPeng is listed. Additionally, XPeng will collaborate with Didi to introduce a new brand of electric vehicles next 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. The company, which also markets 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, a decrease of 40% compared to the previous year. This information was published in the company's recent results. China, the largest emitter of greenhouse gases globally, aims to have the majority of car sales be electric and hybrid vehicles by 2035. The generous purchase subsidies provided by the government have fueled the growth of the electric vehicle market in recent years, with companies like BYD, Nio, and XPeng leading the way.

FutureCar Staff