DiDi, a ride-hailing company, will get $740 million and take a 3.25% stake in XPeng. The partnership agreement also covers marketing, financial and insurance services, charging, robotaxis and international expansion.
XPeng plans to launch a new EV brand using the DiDi technology next year.
XPeng will call the brand using DiDi’s technology Mona. It will be listed as a preferred option for DiDi’s 587 million active app users. DiDi also owns a Brazilian ride-sharing company, which could open up Latin America for XPeng.
DiDi was among the companies most impacted by Xi Jinping’s tech crackdown. It had previously tried to make self-driving cars with Volvo (OTCMKTS:VLVLY), which is controlled by Geely (OTCMKTS:GELYF), the company behind Polestar (NASDAQ:PSNYW). XPeng, meanwhile, has been a big investor in self-driving technology but recently lost the head of that division, reportedly to Nvidia (NASDAQ:NVDA).
XPeng is presently worth about four times last year’s sales despite never turning a profit.
XPEV Stock: What Happens Next?
XPeng’s deal-making this year may be seen by some investors as a sign of strength. More likely, this is a sign of weakness. What might change my mind is a profit, however small.
As of this writing, Dana Blankenhorn had a LONG position in NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.