August 29, 2023: On Monday, XPeng inks a $744M deal with ride-share firm Didi, connecting two of China’s largest tech names.

The Chinese ride-hailing firm will become a strategic shareholder of Xpeng, and the two companies are examining to cooperate in marketing, financial and insurance services, setting, robotaxis, and international expansion. That’s according to releases from both companies.

On Monday morning, Xpeng shares increased over 13% in Hong Kong trading.

With Didi’s strategic collaboration and new assets, Xpeng said it plans to develop an electric car for launch next year under a new mass market brand that will target the 150,000 yuan ($20,580) price range.

Xpeng’s cars typically sell for around 200,000 yuan or more. The new brand, developed under the scheme name “MONA,” is set to differ from that of Xpeng.

The startup’s deal with Didi comes as many companies seek ways to grab a slice of China’s growing but positively competitive electric car market.

In late July, Xpeng and German auto giant Volkswagen announced a deal to develop two new electric cars for China under the VW brand, which will launch in 2026.

Under the agreement, Volkswagen plans to invest almost $700 million in Xpeng for a 4.99% stake.