XPeng Inc. (NYSE: XPEV) shares surged in pre-market trading on Monday after it announced the acquisition of Didi Global Inc.’s smart-car development division. This move eliminates a potential competitor in the electric vehicle market and gives Xpeng a tech-savvy partner in a new venture.
According to an exchange filing Monday, the all-stock deal is valued at HK$5.84 billion ($744 million) and will result in Didi holding a 3.25% stake in XPeng. Xpeng stock witnessed a notable increase of over 16% in Hong Kong trading, eventually settling for an 11% gain at closing. Meanwhile, its American depositary receipts saw a 5% rise by 4:27 a.m. in New York.
This agreement entails the introduction of Project “MONA,” a new EV brand launched by XPeng in partnership with Didi. The brand is set to debut in 2024. These vehicles, priced at around 150,000 yuan – or the equivalent of $20,000, will target the mass market segment.
This development comes shortly after XPeng secured a $700 million investment from Volkswagen AG, a German auto giant. The investment was aimed at a joint effort to develop electric vehicles (EVs) tailored for the Chinese market.
The recent move is expected to ease investor concerns about sluggish sales. This comes amidst escalating competition from industry counterparts such as NIO Inc. (NYSE: NIO), BYD Co., and Tesla, Inc. (NASDAQ: TSLA).
XPeng Inc. (NYSE: XPEV), a company with substantial investments in autonomous driving features, said it would explore various collaborative avenues with Didi. These include fleet management, marketing, insurance, charging facilities, robotaxis, and international markets.
