Alibaba Pulls Out of 'Chinese Tesla'... Converts 500 Billion KRW Worth of Xiaopeng Shares into Cash

Xiaopeng Founder He Xiaopeng, Former Alibaba Employee, Secures $700 Million Investment from Volkswagen

Chinese big tech company Alibaba is cashing out 500 billion won worth of shares in XPeng, an electric vehicle company known as the 'Tesla of China,' and stepping back.

According to Chinese economic media Caixin on the 17th, XPeng announced on the 15th that Taobao, an Alibaba affiliate, sold 25 million shares of XPeng listed on the New York Stock Exchange, cashing out a total of $390 million (approximately 507.4 billion won). After the announcement, XPeng's stock price plunged 7.54%. Following this share sale, Taobao's stake in XPeng decreased from the previous 10.2% to 7.5%.

[Image source=AFP Yonhap News]

[Image source=Reuters Yonhap News]

XPeng is regarded as a promising company that has rapidly grown in the electric vehicle market to the extent of being called the Tesla of China. Alibaba has been a major investor in XPeng since the company's founding in 2014 through Taobao, and XPeng has experienced relatively fast growth with support in funding and technology. XPeng's founder, He Xiaopeng, was a senior executive who served as president of Alibaba's mobile business group and CEO of AliGames.

Earlier, German automaker Volkswagen announced it would acquire a 4.99% stake in XPeng for $700 million. The two companies have signed a technology agreement and plan to launch two mid-sized electric vehicles bearing the Volkswagen logo in China by 2026. The software and autonomous driving features installed in these electric vehicles will incorporate XPeng's technology.

Alibaba Group's Chairman of the Board, Cai Chongxin, revealed during the company's conference call last September that Alibaba's equity securities and other investments total $67 billion. He explained that since not all investments are core strategic businesses, the company is considering cashing out these assets and returning value to shareholders through this process.

Meanwhile, last month XPeng showed its intention to expand related businesses by acquiring the smart electric vehicle project assets of China's ride-sharing company Didi. XPeng and Didi signed a strategic cooperation agreement in August. Didi transferred its smart car development division to XPeng and acquired a 3.25% stake in XPeng, with the acquisition price reaching $740 million.

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