Chinese electric vehicle startup Xpeng Motors announced it will acquire Didi Global's smart electric vehicle development business for HK$5.84 billion (US$744 million).

In a stock exchange filing on Monday, Xpeng said it would issue about 3.25% of the company’s shares to the Chinese ride-hailing giant at HK$64.03 per share, making it a strategic shareholder.

Through the partnership with Didi, Xpeng is set to roll out a new EV brand in 2024, targeting a broader consumer base within the competitive 150,000 price range. This ambitious initiative, currently in the development stages, is named "MONA."

According to the agreement, Xpeng will become the first automotive manufacturing company with comprehensive support from the ecosystem of DiDi. Both parties will explore strategic cooperation in a number of areas, including marketing, financial and insurance services, charging, Robotaxi and international market expansion.

"As a world’s leading mobility technology platform, DiDi shares Xpeng's vision of shaping the mobility experience of the future with technology. Xpeng's A-class Smart EV products under the new brand will not only significantly increase our scale, but also accelerate the adoption of our Smart EV technologies in the mass market segment, bringing our technologies to a much broader customer base," said He Xiaopeng, Chairman and CEO of Xpeng. 

Xpeng and Didi have a longstanding collaborative relationship. In 2020, the EV maker forged a strategic alliance with Xiaoju Car Service, Didi's car rental and maintenance subsidiary. 

The duo have connected their charging networks and have been co-developing charging stations. Additionally, select Xpeng Service Centers now offer Xiaoju's maintenance services.

In a bid to strengthen its foothold in China's fierce EV landscape, Xpeng secured a significant investment in July. Volkswagen acquired a close to 5% stake in Xpeng for $700 million and entered into a strategic agreement to co-design two new models tailored for the Chinese market.