Chinese EV startup Xpeng shares soar 13% after announcing $744 million deal with Didi

cnbc.com:

BEIJING — Chinese electric car company Xpeng said Monday it is buying Didi's smart electric car development business in an exchange of shares worth $744 million.

The Chinese ride-hailing company will become a strategic shareholder of Xpeng, and the two companies are looking to cooperate in marketing, financial and insurance services, charging, robotaxis and international expansion. That's according to releases from both companies.

Xpeng shares rose more than 13% in Hong Kong trading as of Monday morning.

With the strategic partnership and new assets from Didi, Xpeng said it plans to develop an electric car for launch next year under a new mass market brand that will target the 150,000 yuan ($20,580) price range.

Xpeng's cars typically sell for around 200,000 yuan or more. The new brand, developed under the project name «MONA,» is set to be different from that of Xpeng.

The startup's deal with Didi comes as many companies look for ways to grab a slice of China's growing but highly competitive electric car market.

In late July, Xpeng and German auto giant Volkswagen signed a deal to develop two new electric cars for China under the VW brand, that's set to launch in 2026.

Under the agreement, Volkswagen plans to invest about $700 million in Xpeng for a 4.99% stake.

The deals come as traditional auto giants have the cash that electric car startups lack.

Earlier this month, Xpeng reported second-quarter net loss 2.8 billion yuan ($384.5 million) — a wider loss than analysts expected and the biggest quarterly loss since the company went public three years ago.

Xpeng offers some of the most advanced assisted driving technology available to drivers in China. But the startup's monthly car deliveries have remained low versus