In a significant move within the electric vehicle (EV) industry, Xpeng (NYSE: XPEV) has announced its acquisition of the electric vehicle business of Didi Global, a prominent Chinese ride-hailing giant. The acquisition will mark the emergence of a new EV brand codenamed “Mona.” Additional details surrounding this development have recently come to light.
The Mona project, born out of this collaboration, is poised to introduce two fresh vehicle models by the close of 2024. These offerings are anticipated to be priced at approximately RMB 150,000 (equivalent to $20,630). According to insights from an individual familiar with the matter, these models will inherit their technological foundation from Didi’s existing car-making initiative, as reported by local media outlet Yicai.
Xpeng’s earlier announcement elucidated that the inaugural model from the Mona project will take the form of an A-class intelligent electric vehicle, with a slated release in 2024. Significantly, both the new model and the Mona brand are anticipated to showcase clear differentiation from Xpeng’s existing products and primary brand identity.
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Didi’s contribution to the Mona project will extend to leveraging its expansive mobility ecosystem to support this endeavour. By tapping into Didi’s widespread shared mobility market, Xpeng is positioned to actualise the creation of an accessible smart EV model catering to the mass market, with a price point set at RMB 150,000.
Reports from March 2022 hinted at Didi’s aspirations to venture into the automotive sector with an EV project named “Da Vinci.” This project, overseen by a team of around 1,700 professionals based in Beijing’s Shunyi district, was anticipated to culminate in a mass-market A-class EV model comparable in size to the BYD Qin and GAC Aion S. The expected price tag was also approximately RMB 150,000, as outlined in previous reports.
Beyond the transfer of technical assets from the Da Vinci initiative, Xpeng will integrate its software capabilities, including XNGP and smart cockpit, to enhance the project. The manufacturing of the Mona project’s models will take place within Xpeng’s own production facilities. Alongside technology, Didi will also assume responsibility for the sale of select products stemming from the Mona project.
While the Mona project targets both corporate and general consumers, there remains uncertainty regarding the establishment of a dedicated channel for this undertaking, according to sources.
Furthermore, a report by Huxiu, another local media outlet, suggests that Xpeng’s acquisition of Didi’s EV business effectively concludes the “Da Vinci” project’s aspirations in the car-making domain. The report highlights that Didi’s plans for “Da Vinci” will see the abandonment of certain departments, such as branding, marketing, and after-sales, while retaining essential engineering and product divisions.
Didi’s shift away from its automotive ambitions is attributed not solely to qualifications for car manufacturing, but rather to CEO Cheng Wei’s apprehensions. Cheng Wei expressed reservations about car manufacturing’s cost-effectiveness, ultimately leading to the decision to divest from this sector.
Conversely, Xpeng’s Chairman and CEO, He Xiaopeng, maintains an optimistic stance on the potential of the mobility market. In this collaborative effort, Xpeng will oversee research and development, as well as mass production, while Didi will lend operational support from an ecological standpoint.
See also: Xpeng Motors to Acquire Didi’s Smart EV Development Business in $744 Million Deal
The partnership between Xpeng and Didi extends beyond the realm of manufacturing, encompassing strategic cooperation in marketing, financial and insurance services, charging infrastructure, Robotaxi initiatives, and international market expansion.
The agreement between the two entities also includes performance-based incentives linked to the mass production of the Mona project and Didi’s attainment of sales targets, with Didi being eligible for share-based incentives.
With this venture, Xpeng positions itself as the pioneer in automotive manufacturing to receive comprehensive support from Didi’s multifaceted ecosystem, paving the way for synergistic advancements and innovations across various sectors of the electric vehicle landscape.