Chinese electric car giant XPeng announced on Monday that it would acquire Didi’s electric vehicle (EV) subsidiary for more than $740 million and introduce a new vehicle brand.
Founded in 2015 in the southern province of Guangdong, XPeng is one of scores of Chinese startups that have emerged in recent years to capitalize on the surge in electric vehicles in the world’s largest auto market.
Didi is the most popular car-hailing service in China, but it also has a subsidiary that designs electric vehicles.
In a filing with the Hong Kong Stock Exchange, where XPeng is listed, the automaker disclosed that it had reached an agreement with Didi to purchase the subsidiary for $744 million.
Next year, XPeng will also launch a new brand of electric vehicles in partnership with Didi.
The deal, which enables the Chinese manufacturer to eliminate a potential competitor and gain access to its advanced technology, was well received by the markets. Monday morning, XPeng stock rose by nearly 13 percent.
The company, which also sells some of its products in Europe, employs approximately 14,400 individuals and has offices in Silicon Valley and Amsterdam.
According to results released this month, XPeng sold 41,435 vehicles in the first half of 2023, a decrease of 40 percent compared to the same period last year.
China, the world’s greatest emitter of greenhouse gases, aims to sell primarily electric and hybrid vehicles by 2035.
In recent years, generous purchase subsidies have fueled a growth in electric vehicles, led by companies such as BYD, Nio, XPeng, and others.
