The Xpeng-Didi Partnership: A New Era of Collaboration in the EV Industry

The Birth of Mona: Xpeng’s Ambitious Sub-Brand

One notable highlight of the Xpeng-Didi partnership is the rebranding of Didi’s assets into a new sub-brand under Xpeng called “Mona.” Set to make its grand debut in 2024, the Mona models will become an integral part of Xpeng’s product lineup, showcasing the company’s commitment to innovation and capturing a larger market share.

Xpeng’s Need for Market Penetration

Despite heavy investments in research and development, Xpeng’s adoption in the electric vehicle market has been relatively limited, accounting for only 2.1% of China’s new energy vehicle market in 2022, including hybrids. This partnership with Didi presents a huge opportunity for Xpeng to tap into Didi’s extensive user base, which records 587 million active users as of the first quarter of 2023.

The potential integration of Xpeng’s Mona models into the Didi platform could significantly increase the exposure and visibility of Xpeng’s brand, enabling it to reach millions of potential customers in China and beyond. Additionally, Didi’s global expansion efforts, such as its acquisition of Brazilian ride-sharing company 99, provide Xpeng with further business opportunities in new international markets.

Didi’s Evolution from a Ride-Hailing Giant to an EV Collaborator

Didi’s decision to divest its smart electric vehicle business is a strategic move as the company aims to consolidate its position in China’s rideshare market. By partnering with Xpeng, Didi can offload its financially demanding and asset-heavy EV business while still fostering collaboration in the autonomous vehicle domain.

Didi has had a history of collaborations with major car manufacturers, including Volvo, where it supplied autonomous driving technology for manufacturer-supplied robotaxi fleets. Although this divestment marks a partial shift away from Didi’s aspirations of becoming a car manufacturer, it allows the company to focus on strengthening its dominance in the rideshare industry.

The Potential Path to Autonomous Vehicle Collaboration

As Xpeng boasts a strong autonomous driving team and significant investments in software development, the partnership with Didi opens up possibilities for collaboration in the autonomous vehicle space. The vast amount of driving data collected by Didi’s platform can prove invaluable to Xpeng in training its autonomous driving algorithms and enhancing its capabilities.

Despite recent departures within Xpeng’s autonomous driving division, the company remains committed to advancing its autonomous technology. By leveraging the expertise and data resources of Didi, Xpeng can further strengthen its position as a leader in the autonomous vehicle market.

In Conclusion

Summary

The Xpeng-Didi partnership has ushered in a new era of collaboration in the electric vehicle industry. Xpeng’s acquisition of Didi’s smart electric vehicle assets, the introduction of the Mona sub-brand, and collaboration in various areas reflect Xpeng’s determination to expand its market presence and technological capabilities.

By teaming up with Didi, Xpeng gains access to Didi’s extensive user base and the potential to showcase its Mona models as a preferred option within the Didi platform. This partnership presents a significant opportunity for Xpeng to increase its brand exposure, penetrate the market, and tap into new international markets.

Didi’s divestment of its smart electric vehicle business allows the company to focus on strengthening its position in the rideshare market while still fostering collaboration in the autonomous vehicle space. The partnership opens up possibilities for Xpeng to leverage Didi’s driving data and enhance its autonomous driving capabilities.

The Xpeng-Didi partnership sets the stage for continued innovation and growth in the electric vehicle industry, shaping the future of transportation and advancing the adoption of intelligent electric vehicles globally.

Chinese electric vehicle company Xpeng is acquiring the smart electric vehicle assets of transportation giant Didi for $744 million, marking another major alliance that Tesla’s rival has closed in recent months.

In an announcement Monday, Didi saying The duo is forming a strategic partnership to “promote the global application of intelligent electric vehicles and technologies.”

Notably, Didi’s assets will be converted into a new sub-brand called “Mona” under Xpeng, which is scheduled to launch in 2024. The partnership also extends to areas including marketing, financial insurance services, cargo and international expansion.

The news came immediately after Volkswagen’s $700 million investment in Xpeng which would see the production of two new models under the Volkswagen brand using XPeng’s key ADAS technologies.

Xpeng’s Mass Market Ambitions

Despite spending heavily on R&D, Xpeng’s EV adoption is still quite limited, which makes up for only 2.1% of China’s new energy vehicle market (including hybrids) in 2022. A partnership with Didi could help you reach hundreds of millions of users in China.

For the year ending in the first quarter of 2023, Didi Recorded 587 million active users. Imagine these passengers, when choosing their ride on the Didi platform, see Xpeng’s Mona models displayed as a preferred option in the future. In addition, Didi’s footprint goes beyond China with his acquisition of the Brazilian ride-sharing company 99 back in 2018, which has given it a boost in Latin America.

In fact, Xpeng acknowledged in its filing with the Hong Kong securities authority that the partnership “will increase the company’s [Xpeng]Brand exposure and customer reach through the vendor. [Didi]’s, which in turn will result in further business opportunities and unfold business opportunities for the Company in new international markets.”

Didi’s dream as a car manufacturer

Like Uber, Didi has partnered with major car manufacturers over the years. That included one with volvo, where it agreed to supply autonomous driving technology to power manufacturer-supplied robotaxi fleets. Dumping his smart car business means Didi has given up part of his dream of making cars.

The carpool titan has been slowly coming out from under the dark cloud after a series of regulatory crackdowns. At this stage, where your priority is likely to be to strengthen your dominance in China’s rideshare market, Selling the money-guzzling, asset-heavy EV business to an industry partner doesn’t sound like a bad idea.

The remaining question is whether Didi and Xpeng will join forces in the autonomous vehicle realm. Xpeng itself has a great AV team and has been the most aggressive EV player in China in terms of investment in software development. And there are no signs of a slowdown in one part of the business despite the recent loss of your AV head. The seas of driving data collected by Didi’s platform could certainly be an invaluable asset for Xpeng in training its autonomous driving algorithms.

More to come: this is a developing story…