XPeng acquires rival subsidiary in $740M deal

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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. This deal will allow XPeng to eliminate a potential competitor and gain access to advanced technology. Additionally, XPeng plans to partner with Didi to launch a new brand of electric vehicles in the coming year. The acquisition was well-received by the markets, with XPeng shares increasing by almost 13%.

FutureCar Staff Aug 30, 2023 11:42 PM PT

XPeng acquires rival subsidiary in $740M deal

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, 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, as stated in a filing to the Hong Kong Stock Exchange, where XPeng is listed. Additionally, XPeng will partner 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 rose by 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, which represents a 40% decrease compared to the previous year, according to recently published results. China, being the largest emitter of greenhouse gases, aims to have the majority of car sales consist of 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.