Didi Sells EV Project for $744 Million and Partners with Buyer Xpeng to Launch Model

BEIJING, August 28 (TiPost)— Didi Global Inc., the world’s leading ride-hailing platform, found a new partner to pursue its electric vehicle (EV) dream.

Credit：Visual China

Xpeng Inc. announced on Monday a strategic partnership with Didi, becoming the first automotive manufacturing company with comprehensive support from the ecosystem of DiDi. Under the agreement, Xpeng will issue Class A ordinary shares, worth up to HK$5.84 billion (US$744 million), to acquire assets related to DiDi’s Smart EV project. Didi will receive about 3.25% of Xpeng’s outstanding share capital upon completion of the issuance, thus become a strategic shareholder of Xpeng, with a lock-up period of 24 months after the initial closing.

Xpeng said it plans to launch an all-new EV brand and an A-class Smart EV model as the debut product of the brand in 2024, currently being developed under the project name MONA. DiDi will provide support from its mobility ecosystem for the project with access to its nationwide shared mobility market. Unlike the current lineups mainly pricing above RMB200, 000, Xpeng will set price of the new brand at a RMB150, 000 range, paving the way for the auto company to build EVs for the mass market segment.

Besides the new brand, Xpeng and Didi will explore strategic cooperation in a number of areas, including marketing, financial and insurance services, charging, Robotaxi and international market expansion. Xiaopeng will continue to create value and capture growth opportunities in the mobility ecosystem as well as in autonomous, the Chairman and CEO He Xiaopeng said. He noted the new brand will not only significantly increase his company’s scale, but also accelerate the adoption of its EV technologies in the mass market segment, bringing its technologies to a much broader customer base. Didi Chairman and CEO Cheng Wei vowed to continue to deepen cooperation with Xpeng in multiple areas, driving transformation of the transportation and automotive industries.

This is the second significant partnership that Xpeng sealed in about a month. Volkswagen, the top 1 European automaker by revenue, unveiled in July a framework agreement on strategic technical collaboration with Xpeng. The two parties will jointly develop two B-class battery electric vehicles (BEV) models for sale in the Chinese market under Volkswagen brand, leveraging respective core competencies and Xpeng’s full-stack technologies, from EV platform G9 to Connectivity and advanced driver-assistance system (ADAS) software. The models are expected to start production in 2026. The parties will explore additional potential strategic cooperation in a number of areas, including collaboration on future EV platforms, software technologies and supply chain.

Volkswagen CEO Oliver Blume said in late July that his company’s co-developed EVs will be produced at Edward platform, an older generation of Xpeng’s platform technology underpinned the Chinese startup’s G9 and P7 models. Xpeng will receive technology service revenue from Volkswagen, historically reversing a traditional model of foreign automakers charging Chinese partners for tech licensing in the past four decades. 

Prior to Didi’s sales of EV unit, another Chinese internet giant Baidu has also dropped its previous plan to produce EVs by itself. Jidu, Baidu’s EV joint venture with Zhejiang Geely Holding Group, was renamed to Ji Yue, a premium intelligent technology brand, earlier this month. Ji Yue is a brand that was mainly controlled by Geely. Geely holds 65% stakes in the company and Baidu holds 35%, while Jidu is a venture that 55% of shares owned by Baidu and remained 45% by Geely.

The equity structure reflects Baidu’s role shift to a technology provider, handing over the decision-making power of vehicle production to Geely. The rename signals Baidu CEO Robin Li may determine to get back to his previous pursuit in 2018, which means Baidu will only develop self-driving tech, rather than building cars and treat artificial intelligence (AI) as its top strategy.

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