XPeng acquires rival subsidiary for $740M

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【Summary】Chinese EV startup XPeng announced its plan to acquire the EV division of ride-hailing service Didi for over $740 million. The acquisition will allow 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 almost 13%. China aims for the majority of car sales to be electric and hybrid by 2035, leading to a boom in the EV market.

FutureCar Staff Aug 28, 2023 4:17 PM PT

XPeng acquires rival subsidiary for $740M

Chinese electric car company XPeng has announced its plans to acquire the electric vehicle (EV) division of ride-hailing service Didi in a deal worth over $740 million. This move will also see XPeng launch a new brand of vehicles. Founded in Guangdong province in 2015, XPeng is among the many Chinese startups that have emerged to tap into the growing electric vehicle market in China, the world's largest auto market.

Didi, known as China's leading car-hailing app, also operates a subsidiary focused on designing electric vehicles. As part of the agreement, XPeng will purchase this subsidiary from Didi for $744 million. Additionally, XPeng will collaborate with Didi to introduce a new line of electric vehicles next year. The deal has been well-received by the market, with XPeng shares rising by nearly 13% on Monday morning.

XPeng, which also markets its products in Europe, currently employs around 14,400 individuals and has offices in Silicon Valley and Amsterdam. However, the company faced a decline in sales during the first half of 2023, with 41,435 vehicles sold, marking a 40% decrease compared to the previous year.

China, being the largest emitter of greenhouse gases globally, has set a target for the majority of car sales to be electric and hybrid by 2035. The government's generous purchase subsidies have contributed to the surge in EV sales in recent years, with companies like BYD, Nio, and XPeng leading the way in this market.