XPeng acquires rival subsidiary for $740M
【Summary】Chinese EV startup XPeng is set to acquire the EV division of ride-hailing service Didi for over $740M and launch a new brand of vehicles. The deal allows XPeng to eliminate a potential competitor and gain access to advanced technology. XPeng shares rose nearly 13% following the announcement. China aims for the majority of car sales to be electric and hybrid by 2035.
Chinese electric car company XPeng has announced its plans to acquire the electric vehicle (EV) division of ride-hailing service Didi for over $740 million. This move will also see XPeng launching a new brand of vehicles.
XPeng, founded in Guangdong province in 2015, is among the many Chinese startups that have emerged in recent years to tap into the growing electric vehicle market in China.
Didi, China's leading car-hailing app, also operates a subsidiary that designs electric vehicles. In a filing with the Hong Kong Stock Exchange, XPeng revealed that it has reached an agreement to acquire this subsidiary for $744 million.
Furthermore, XPeng will be partnering with Didi to introduce a new brand of electric vehicles in the coming year. This deal has been well-received by the market, 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.
XPeng, which also sells some of its products in Europe, employs around 14,400 people and has offices in Silicon Valley and Amsterdam.
In terms of sales performance, XPeng sold 41,435 vehicles in the first half of 2023, marking a 40% decline compared to the previous year. This information was published in the company's recent results.
China, being the world's largest emitter of greenhouse gases, has set a goal for the majority of car sales to be electric and hybrid by 2035. The availability of generous purchase subsidies has fueled the boom in electric vehicles in recent years, with companies like BYD, Nio, and XPeng leading the charge.
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