The deal, worth up to 5.8 billion Hong Kong dollars, or about $744 million, will see DiDi (DIDIY) receive a 3.25% stake in

XPeng
,
according to a company filing Monday.

XPeng added it plans to launch a new EV brand in 2024 as part of a strategic partnership with

DiDi
.
The brand is currently being developed under the project name “MONA” and includes plans to launch an A-class smart EV model next year. DiDi will “provide support from its mobility ecosystem” for the project with access to its nationwide mobility market, XPeng said.

A-segment cars are small, compact cars. B-segment cars are slightly larger, and a C-segment car is equivalent to a small family sedan.

The new brand will target the mass market segment at a price range of around 150,000 Chinese yuan, or about $21,000, XPeng said.

American depositary receipts of XPeng (ticker: XPEV) climbed 5% in premarket trading Monday to $17.53, while its Hong Kong shares closed with a gain of 11%.

S&P 500
and

Nasdaq Composite
futures were up 0.1% and 0.2%, respectively.

XPeng’s ADRs, as of Friday’s close, have risen 76% so far in 2023. The company, and not the overall market, has been responsible for much of those gains.

XPeng shares surged from roughly $15 a share to more than $20 a share in the days following an announcement in July regarding a $700 million investment into the company by

Volkswagen

(VOW3.Germany). Along with the capital, the pair will develop two EVs for the Chinese market.

ADRs have settled back down below $18 a share, but they are still up about 113% over the past three months despite price cuts for EVs in China accelerating. Lower pricing has weighed on shares of some other EV makers over the past few weeks.

BYD

(1211.Hong Kong) is the largest maker of battery electric vehicles, or BEVs, in China. Its shares have fallen about 4% over the past three months.

Write to Callum Keown at [email protected]