The combination of Didi and Tucki is essentially that two technology companies have a clearer understanding of their self-positioning and goals in the face of the era of smart travel.
Author | Zhou Yiwei
Edit | peace of mind
What sparks can be sparked by the joint efforts of shared travel giants and new forces to build cars?
Didi Chuxing and Xpeng Motors gave the answer.
On August 28th, Didi and Tucki jointly announced that they have reached a strategic cooperation, and will make use of their respective superior resources to jointly promote the global application and popularization of smart electric vehicles and related technologies, so as to accelerate the landing of "universal access to technology and smart equality".
For this cooperation, Cheng Wei, chairman and CEO of Didi, and He Xiaopeng, founder of Xpeng Motors, personally participated in the negotiation and discussion on the details of the cooperation.
The founders of both sides not only paid enough attention to this cooperation, but also had high expectations and great dreams. As Cheng Wei said, "The two sides will continue to deepen cooperation in various fields and jointly promote the transformation of the transportation and automobile industries."
Didi is the largest shared travel platform in China, and Xpeng Motors is one of the first new forces to explore smart electric vehicles in China.
On the whole, the two sides can complement each other and get what they need. In essence, two technology companies have a clearer understanding of their role positioning and goals in the face of the era of intelligent travel.
Complement each other’s advantages and take what they need.
Specifically, the cooperation between Didi and Tucki mainly includes the following information:
On the capital level, Tucki will acquire Didi’s smart car development business, including research and development, design and engineering development of new smart electric vehicles.
Neither party involved in the transaction involves cash, and it will be completed in the form of additional shares issued by Xpeng Motors. Tucki’s upfront consideration is 3.25% of Tucki Class A common stock. After the gambling target is achieved, Didi’s shareholding in Tucki will be expanded to 5% at most. The highest total consideration of this acquisition is about 5.835 billion Hong Kong dollars (about 744 million US dollars).
In terms of business cooperation, Xpeng Motors will launch an A-class intelligent electric vehicle, the project code is "MONA", and there will be multiple SKUs, which are respectively for the B-end shared travel market and the C-end personal consumption market. The goal of "MONA" is to build a pure electric vehicle with high-level assisted driving capability in the price range of 150,000, and the XNGP capability based on the Boom 2.0 architecture in Tucki is standard.
"MONA" will be made and produced in Xpeng Motors and owned by Tucki, and mass production is expected to start in 2024. Didi will open up the ecology to Xiaopeng Automobile, provide business support for MONA, including intelligent cockpit, intelligent driving and shared travel market, and help Tucki to create explosions in the "150,000-level" price range.
According to the gambling terms set by both parties, the issuance of additional shares includes four stages in total: 58.16 million shares will be issued on the acquisition delivery date; Mass production vehicles began to deliver and issue 4.63 million shares; In the first phase, the delivery of new cars reached 180,000 units and 14.05 million shares were issued; In the second stage, 180,000 new cars were delivered and 14.27 million shares were issued.
That is to say, if the annual sales volume of "MONA" reaches 180,000 vehicles, and this goal is achieved for two consecutive years, Didi will get up to 5% of Xpeng Motors’s Class A common stock after the transaction is completed.
Why did Didi take the road of Huawei?
A few years ago, Cheng Wei, the founder of Didi, shared his prediction of future travel. He mentioned that there are three irreversible trends in the next 10 years: car sharing, new energy vehicles replacing fuel vehicles, driverless and intelligent times.
Cheng Wei believes that Didi is essentially a big data company and an artificial intelligence company. What Didi will do in the future is to resolve the contradiction between supply and demand among people, cars and roads in a specific period of time by creating super traffic AI, so as to make travel smarter and more efficient.
To make travel smarter and more efficient, we must not only have smart roads, but also smart and shared cars.
As early as 2017, smart transportation has become one of Didi’s strategic directions. They hope to reduce urban congestion by 20% through a series of smart transportation products and services.
How to make cars smart and shared? This road is not easy to walk.
In April 2018, Didi and 31 automobile industry chain enterprises jointly established the "Torrent Alliance". The members of the alliance include OEMs, spare parts manufacturers, new energy fields, digital map companies, and car networking.
With openness and empowerment as the core, Torrent Alliance hopes that all enterprises in the alliance can open and empower each other, discuss the design and standard formulation of shared new energy vehicles, jointly develop a new generation of vehicles designed for sharing, and promote large-scale operation.
Based on the idea of Torrent Alliance, in May 2018, Didi and LI established a joint venture company, and the two sides planned to customize and produce smart electric vehicles for shared travel scenes. However, the cooperation finally ran aground for various reasons.
In 2020, Didi and BYD jointly established a joint venture company-Wonderful Travel (Hangzhou) Automobile Technology Co., Ltd., which is dedicated to the design and research and development of online car. BYD holds 65% of the shares, and Didi accounts for 35%.
In November of that year, the world’s first customized network car D1 jointly built by Didi and BYD was officially unveiled. D1 Didi is responsible for product definition, styling design, car networking research and development, and BYD is responsible for OEM.
In 2021, D1 sold 10,176 vehicles; In 2022, the sales volume was less than 1,000 vehicles. In November 2022, this car officially began to be sold to individual consumers. It has only one model and the price is 157,800 yuan. Only 367 vehicles were sold in November last year.
A very important reason why D1 is difficult to get a car is that the price of similar car models on the market has dropped to 70,000-110,000. Although D1 has better service, the price of 150,000 is not competitive for drivers.
Since D1 is a customized model, BYD needs to open a separate production line for it. Low sales volume cannot reduce production costs. Reality has proved that the OEM mode is uneconomical and unsatisfactory.
Joint development and OEM models are not feasible. Is it feasible for Didi to build a car by himself?
Earlier, it was also reported that Didi secretly launched a car-making project in 2021, with the internal code name "Da Vinci". This year, Xiaomi and Baidu also announced the next car.
Today, Xiaomi and Baidu’s car-making projects are still struggling, and the smart car market has fallen into a bloody price war. The sluggish consumption has forced head brands Tesla and BYD to cut prices to seek sales, while other brands have to cut prices to survive.
In this environment, it is better for Didi to take a more efficient road than to build a car himself. After all, building a car requires a lot of money, which is a heavy burden for Didi, which is still losing money at this stage.
This time, Didi changed her mind. In essence, its cooperation with Tucki is to export its capabilities and ecology in a modular way, exchange resources for sales, make a big cake together, and achieve a win-win situation for both sides.
This is a bit like Huawei’s path. Huawei has always emphasized not to build cars, but to be an eco-brand, empowering other car companies with its technology and capabilities accumulated in the ICT field for more than 30 years and helping them build cars.
Tucki found sales export.
With this cooperation, Xpeng Motors founder He Xiaopeng made no secret of his desire for sales. He said that he is very optimistic about the sales competitiveness of MONA, with an annual sales volume of at least 100,000, and his expectation is much higher than this figure.
As early as August 18th, at the conference call of Xpeng Motors Q2 financial report, He Xiaopeng mentioned that he was confident that he had the ability to launch fully-automatic driving cars at the most mainstream level of 150,000, which would greatly promote the comprehensive popularization of intelligence. Because he has clearly seen the clear and achievable path and timetable.
From MONA, where Tucki cooperates with Didi, we can see the path and timetable that He Xiaopeng refers to.
MONA plans to start mass production in 2024. The reason why it is so fast is that before the cooperation between the two parties, Didi has already had a class A smart electric car with a very high degree of completion, and has invested billions of yuan in development in the early stage.
Tucki believes that this is a very attractive asset and the core of cooperation between Tucki and Didi.
In addition to the car-making business, Xpeng Motors became the first vehicle enterprise to receive full support from Didi’s ecosystem. The two sides will explore mutually beneficial and win-win long-term cooperation opportunities in various fields, including the operation of Tucki vehicles on Didi platform, brand marketing, financial and insurance services, construction of charging facilities, Robotaxi and international market cooperation.
In recent years, some cities have begun to promote the use of new energy vehicles in the network car, and the network car market is becoming the main sales market for new energy vehicle brands.
According to the data of the Ministry of Transport, by the end of last year, a total of 5.09 million people in the country had obtained the driving license of the network car, and a total of 2.118 million vehicles had obtained the transportation license of the network car.
The Interim Measures for the Management of Online Booking Taxi Management Services stipulates that the online car will be scrapped when the mileage reaches 600,000 kilometers. Some cities have also made requirements for the newly applied network car, which must be brand-new new energy vehicles, and the old and worn-out vehicles are blocked from the door.
This means that every 3-5 years, there is a demand for changing cars for millions of network cars. Previously, Ai ‘an, BYD, etc. all took a large share in the online car market, and became the mainstream brands in the online car market at a price of less than 200,000.
As the head network car platform, Didi has accumulated a huge number of C-end users and network car drivers. In the 12 months to March 31st, 2023, Didi’s travel business in China had 411 million annual active users and 19 million annual active drivers. All these will guarantee MONA’s sales.
And boosting sales is what Xpeng Motors needs most at the moment. From January to June this year, Xpeng Motors delivered a total of 41,400 vehicles, down 40% year-on-year. In the same period last year, Tucki delivered 34,600 vehicles, up 160% year-on-year. In the first half of last year, the delivery volume of Tucki ranked first among Wei Xiaoli’s three companies, and it was at the bottom in the first half of this year.
For Tucki, it is the last word to promote sales in an eclectic way. Judging from Tucki’s actions in the first half of the year, it did.
Starting from MONA, Xpeng Motors not only started the multi-brand strategy, but also started the ToB sales. Previously, Xpeng Motors reached a cooperation with Volkswagen, and Tucki sold technologies related to smart cars to Volkswagen.
In other words, Tucki can sell Tucki brand cars, or MONA or other brands of cars; Tucki not only sells cars, but also sells technology.
This is not inconsistent with Tucki’s positioning. From the beginning, it was positioned as "a technology company focusing on future travel, committed to exploring technology and leading future travel changes."
Socrates said, "Know yourself". He believes that the deeper and more comprehensive a person knows about himself, the less detours he will take; Therefore, knowing yourself is the most important topic in everyone’s life.
For an enterprise, why not?