XPeng acquires rival 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 $740M, enabling the launch of a new electric vehicle brand. The deal eliminates a potential competitor for XPeng and grants access to advanced technology. XPeng shares rose by almost 13% following the announcement. China, the largest emitter of greenhouse gases, aims for the majority of car sales to be electric and hybrid by 2035, leading to a boom in EVs and companies like BYD, Nio, and XPeng.

FutureCar Staff Aug 28, 2023 11:23 PM PT

XPeng acquires rival subsidiary for $740M

Chinese electric car company XPeng has announced its plans to acquire the 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 take advantage of the growing electric vehicle market in China.

Didi, China's leading car-hailing app, also operates a subsidiary that designs electric vehicles. In a filing to the Hong Kong Stock Exchange, XPeng revealed that it has reached a deal with Didi to acquire the subsidiary for $744 million. As part of the agreement, XPeng will also collaborate with Didi to launch a new brand of electric vehicles next year.

The market has responded positively to the deal, as it allows XPeng to eliminate a potential competitor and gain access to advanced technology. Following the announcement, XPeng shares rose by almost 13% on Monday morning.

XPeng, which also markets some of its products in Europe, currently employs around 14,400 people and has offices in Silicon Valley and Amsterdam. However, the company's sales have experienced a decline, with 41,435 vehicles sold in the first half of 2023, representing a 40% decrease compared to the previous year.

China, being the largest emitter of greenhouse gases, has set a goal for the majority of car sales to be electric and hybrid by 2035. Generous purchase subsidies have fueled the growth of the electric vehicle market in recent years, with companies like BYD, Nio, and XPeng leading the way.