HONG KONG -- Chinese EV maker Xpeng said it would buy Didi's electric car 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.
The all-stock deal with Didi calls for Xpeng to launch an A-class model next year under a new brand, in a project called MONA, which will be priced in the 150,000 yuan ($20,000) price tier. Xpeng's current offerings are mostly priced above 200,000 yuan.
The deal comes after Xpeng and Volkswagen Group in July announced a partnership in which VW will invest $700 million in Xpeng and the two companies jointly develop electric vehicles in China.
"As an EV startup, we are not as skilled as established automakers like Volkswagen in terms of scale and cost management in the 150,000 yuan segment ... the partnership with Didi will ensure better-than-expected initial scale for the car and achieve a combination of goals in innovation and supply chain management," Xpeng CEO He Xiaopeng told Chinese media, according to a company-provided transcript.