Chinese green car Xpeng to acquire Didi's smart EV unit for $744mln
Chinese green car maker Xpeng announced this week that it would acquire Didi's electric car (EV) development business in a deal worth up to $744 million that will see it supply vehicles to the ride-hailing giant، boosting production and cutting costs by launching an A-class model next year under a new brand، in a project called MONA، which will be priced in the 150 thousand yuan ($20 thousand) price tier.
Chinese green car maker Xpeng would buy Didi's electric car (EV) development unit in all-stock deal with Didi calls for Xpeng to produce an A-class model next year under a new brand، in project MONA، which will be priced in the 150 thousand yuan while peng's current offerings are mostly priced above 200 thousand yuan.
Xpeng shares shot up 11% at the start of this week
Reuters reported that shares in Xpeng، one of China's smaller green car or electric vehicle manufacturers and currently loss-making، shot up 11% at the start of this week in Hong Kong trade on the news which comes on the heels of a stake sale to and partnership with Germany's Volkswagen.
Chinese green car maker Xpeng expects to deliver، after acquiring buy Didi's electric car (EV) development unit، at least 100 thousand MONA cars to be sold per year and to achieve greater economies of scale for Xpeng an A-class model under MONA project.
Chinese green car maker Xpeng is not as skilled as the German Volkswagen
He Xiaopeng، Chinese green car maker Xpeng Chief Executive، stated that his company as an EV startup، it is not as skilled as established automakers like the German Volkswagen in terms of scale and cost management in the 150 thousand yuan segment.
He Xiaopeng، Chinese green car maker Xpeng Chief Executive، confirmed that the partnership with Didi's electric car (EV) development unit will ensure better-than-expected initial scale for the car and achieve a combination of goals in innovation and supply chain management.
Chinese green car maker Xpeng sales of at least 100 thousand MONA a year
He Xiaopeng، Chinese green car maker Xpeng Chief Executive، expected sales of at least 100 thousand MONA cars a year and that the cars would also be sold to retail customers as this deal looks like a very good strategic move.
He Xiaopeng، Chinese green car maker Xpeng Chief Executive، explained that Didi's development of green cars or EV had invited speculation that it had ambitions to shift into manufacturing، but the announcement of the deal which is Didi's first major transaction since its apps were restored to China app stores in January after a regulatory crackdown on its business، suggests the company is moving in another direction.
Slower demand، excess manufacturing capacity in China's EV industry have intensified competition
He Xiaopeng، Chinese green car maker Xpeng Chief Executive، indicated that slower demand and excess manufacturing capacity in China's EV industry have intensified competition and made it hard for relative newcomers such as Didi to enter the market، while smartphone maker Xiaomi only recently won a regulatory nod to manufacture electric cars، EVs، two years after first announcing such plans.
Yale Zhang، managing director at Shanghai-based consultancy Automotive Foresight، assured that Didi's decision to partner with Chinese green car maker Xpeng over other EV makers likely marked recognition of Xpeng's technology and the deal will benefit Xpeng as the sedan Didi has developed would be suitable for selling to other businesses.
Ride-hailing giant Didi Global stocks listed in the New York Stock Exchange
Under the deal، ride-hailing giant Didi Global whose stocks listed in the New York Stock Exchange، will gain around 3.25% of Xpeng، with the green cars maker issuing shares at HK$64.03 each، worth $474 million in total and the offer price represents a 1.7% discount to its closing price last Friday but if vehicle delivery targets are fulfilled، Didi's stake could climb to 5.26% for a deal value of up to $744 million.
Chinese green car maker Xpeng and Didi companies will explore strategic cooperation in a number of areas، including marketing، financial and insurance services as well as other possible areas of cooperation include charging، robotaxis and jointly developing an international market as Didi has been working with Chinese carmakers to develop robotaxis which it aims to put in service by 2025.
Chinese green cars face wide price war by American electric cars Tesla
Chinese green car maker Xpeng، which is also listed in New York Stock Exchange، has been grappling with expanding losses and slumping sales amid an industry-wide price war started by American electric cars Tesla company since January.
He Xiaopeng، Chinese green car maker Xpeng CEO، said the new mass-market brand it aimed to introduce using the MONA platform would begin mass production in the second half of 2024 while Xpeng sold some 41 thousand EVs in the first half، accounting for nearly 2% of battery vehicle sales in China، by comparison، rivals BYD and Tesla sold 550 thousand and 294 thousand green cars، respectively.
He Xiaopeng، Chinese green car maker Xpeng CEO، expected to see only 8 automakers survive in the Chinese auto market، the world's biggest car market، by 2030، compares with 65 auto manufacturers currently.
