Xpeng just announced a deal with DiDi Global – a reason to buy stock?

Xpeng Inc (NYSE: XPEV) just announced a $744 million deal to buy the smart electric vehicles segment of Didi Global. Its shares are up 3.0% on Monday.

Xpeng will also introduce a new EV brand

The ride-hailing giant will get a 3.25% stake in the Chinese EV startup in return, as per the press release.

On Monday, Xpeng also revealed plans of announcing a new electric vehicles brand next year as part of its strategic alliance with DiDi Global. The project dubbed “MONA” will launch a smart EV (A-class) priced at about $21,000 in 2024. According to CEO He Xiaopeng:

Xpeng shares are up nearly 80% year-to-date at writing.

Is it worth buying Xpeng stock today?

Partnering with DiDi Global may be a reason to invest in Xpeng considering a Bank of America analyst recently raised his price objective on the EV stock to $22 – a more than 20% upside from here.

Last month, Volkswagen disclosed a $700 million stake in Xpeng and said it will work with the Chinese startup on two new electric vehicles. According to Ming Hsun Lee, that partnership delivers the following three benefits:

Earlier in August, Xpeng reported a 25.5% sequential growth in its revenue for the second quarter.