Didi Abandons Direct Vehicle Manufacturing... Transfers Assets to Xiaopeng

China's largest ride-sharing company, Didi, has abandoned independent automobile manufacturing. This is attributed to the worsening market conditions due to intensified competition in the industry and a slowdown in sales growth.

On the 28th, China Securities Journal reported that Didi signed a strategic cooperation agreement to transfer assets and research and development (R&D) personnel related to its smart electric vehicle project to Xiaopeng Motors. The acquisition price by Xiaopeng is known to be around $740 million (approximately 979.5 billion KRW). Based on this, Xiaopeng plans to develop the A-class smart electric vehicle "Mona" and start mass production of the first model from next year.

[Image source=Yonhap News]

Didi has been focusing on automobile manufacturing since 2018. In the same year, it established a joint venture called "Zhudianchuxing" with electric vehicle company Li Auto, and in 2019, it launched the ride-hailing exclusive vehicle D1 by establishing "Meihaochuxing" together with BYD.

In 2023, Didi acquired Guojizjun, signaling its intention to independently enter automobile R&D, production, and manufacturing. Some media outlets reported that an internal manufacturing plan called "Da Vinci" was announced in June last year, and that the first vehicle would be delivered in June this year.

In particular, Didi Chuxing has been focusing on research in the autonomous driving field. According to China Securities Journal, as of last year, Didi Chuxing's cumulative investment in autonomous driving-related R&D reached 35 billion yuan (approximately 6.363 trillion KRW), with an estimated 9.5 billion yuan invested last year alone. In April, it also unveiled the concept car Didi Neuron and the autonomous driving cargo robot CargoBot.

However, due to intensified competition in the finished vehicle industry and development setbacks, Zhudianchuxing filed for bankruptcy in August last year. The cumulative loss since Didi Chuxing was first established in 2012 exceeds 100 billion yuan, which is also a burden. A former senior executive of Didi told China Securities Journal, "Didi's revenue has sharply declined in recent years," adding, "Businesses that cannot be realized in the short term should be discontinued, and focus should be placed on the core business."

This content was produced with the assistance of AI translation services.