The HK$5.84 billion ($744 million) all-stock deal will see Didi emerge with a 3.25% stake in Xpeng, in keeping with an change submitting Monday. Xpeng shares surged greater than 16% in Hong Kong buying and selling earlier than paring beneficial properties to shut 11% increased. Its American depositary receipts gained 5% by 4:27 a.m. in New York.

As a part of the deal, Xpeng plans to launch a brand new EV model in partnership with Didi in 2024. Dubbed Venture “MONA,” the vehicles will goal the mass market section with a price ticket of round 150,000 yuan — or about $20,000. The partnership comes simply over a month after Xpeng acquired a $700 million funding from German auto big Volkswagen AG to collectively develop EVs for the Chinese language market — and may assist ease investor issues about sluggish gross sales within the face of intensifying competitors from the likes of Nio Inc., BYD Co. and Tesla Inc.

Xpeng, which has invested closely in autonomous driving options, stated it will discover collaborations with Didi on fleet administration, advertising and marketing, insurance coverage, charging amenities, robotaxis and worldwide markets.

For Didi, the deal marks a retreat from the car-making enterprise, as soon as thought-about a possible driver of progress for the car-hailing firm. 

Chinese language know-how leaders, together with Didi and Xiaomi Corp., have been attempting to inch into the capital-intensive EV growth, with a wager to make the vehicles extra “clever” with autonomous driving and different customized interactive options. But the already over-crowded market has made it even harder for the late-comers to acquire a producing license and acquire market share.

Didi, as soon as feted because the nationwide champion that pushed Uber Applied sciences Inc. in a foreign country, was pushed off New York’s essential bourse after Chinese language regulators launched investigations into the safety of its information. The corporate is regularly resuming its car-hailing enlargement.

Buyers have been relying on Didi popping out of the penalty field. Greater than a yr after exiting the New York Inventory Trade following Beijing’s tech crackdown, the Chinese language ride-hailing agency boasts a market worth round $15 billion. That’s bigger than simply about another agency whose shares are primarily quoted over-the-counter within the US, and even places it among the many high ranks of NYSE-listed companies American Depositary Receipts, information compiled by Bloomberg present.

9-year-old Xpeng simply reported a wider-than-expected quarterly loss because it struggles to ramp up deliveries. It has stoked investor concern with its gross sales decline and weak margins, and was pressured to delay its profitability goal and overhaul inside administration. 

Didi might improve its stake in Xpeng to five% if the brand new mass-market model reaches 100,000 deliveries for 2 consecutive years, in keeping with the settlement.