China’s ride-hailing mammoth Didi Chuxing announced today a new joint venture with Beijing Electric Vehicle Co., the largest Chinese electric vehicle (EV) maker, to ride on the wave of Beijing’s push towards greener transportation to drive its growth which has been plagued by regulatory concerns on the company’s safety practice.
The JV – BAIC-Xiaoju New Energy Auto Technology Co. Ltd, or Jingju, – is going to see Didi work closely with BAIC on areas including new energy fleet operation. Didi currently runs the world’s largest shared EV network, with close to 400,000 cars registered in its system.
The setup of Jinju is the latest development in Didi’s growing alliance with automakers.
Coming as a disruptor to the traditional automakers, Didi started collaborating with carmakers and fleet operators in 2016, which led to the launch of an industry-chain partnership network dubbed DiDi Auto Alliance, a platform later on being upgraded to Xiaoju Automobile Solutions (XAS) in August 2018 with US$1 billion investment.
Like many other countries, China is also gradually phasing out gasoline cars. And in response to Beijing’s calling, BAIC, the parent company of Beijing Electric Vehicle Co., has set a target to stop the sale and manufacturing of gas-fuelled car models by 2025. Beijing is also aggressively looking at alternative solutions – vehicles that run either on battery or a plug-in hybrid electric vehicle.
Additionally, this shift to cleaner vehicles coincides with the decline – the first time since the 1990s – we are seeing in China’s auto market in 2018.
NEV sales, on the other hand, grew by 61.7% to 1.3 million units, according to Reuters citing China’s Association of Automobile Manufacturers. The industry body expects NEV sales in China to hit 1.6 million within 2019.
This could be another growth opportunity that Didi can leverage on after a challenging 2018, plagued by increase regulatory checks amid safety concerns.
Didi, who counts the likes of Uber Technologies Inc, Apple Inc and Japan’s SoftBank Group Corp as backers, has raised up to US$20.6 billion to date, according to CrunchBase.
Editor: Ben Jiang