Islamabad, Aug 26: As the ride-hailing company concentrates on its core business following a brutal regulatory crackdown, Didi Global, a subsidiary of the Chinese state-backed digital mapping giant NavInfo, is in advanced talks to sell its smart driving and cockpit assets to the latter, according to three sources.
According to two of the people, Didi intends to transfer the assets to AutoAi, a company that makes hardware and software for intelligent cockpits, in exchange for a share in AutoAi. The sale, which values the assets at close to 500 million yuan ($70 million), is expected to cause China’s largest ride-hailing service to withdraw considerably from the fiercely competitive electric vehicle sector, according to the two people.
In an increasingly competitive Chinese market, manufacturers of electric vehicles (EVs) are vying for customers with cutting-edge features like autonomous driving and smart cockpits. A year ago, Didi sold its EV development company for $744 million to Chinese EV manufacturer Xpeng, in exchange for a roughly 3.25% interest in the car manufacturer. According to the three sources, it made up the majority of its EV-related assets.
They declined to give their name because the information was confidential, but they stated that the agreement with AutoAi might be revealed in the next several days. NavInfo, AutoAi, and Didi did not reply to messages seeking comment.Didi also intends to invest more than 200 million yuan in the currently losing AutoAi as part of the agreement, additionally referred to as Siwei Zhilian Technology in Chinese, according to two of the individuals.
According to them, the agreement will enable Didi to explore strategic collaboration in several domains, like as ride-hailing and intelligent driving, and strengthen its relationship with AutoAi and NavInfo, two of China’s leading online mapping companies.
Listed in Shenzhen NavInfo gives Didi mapping-related data and technical help. NavInfo delivers services like high-definition maps and navigation solutions to automobiles and internet corporations. As a significant provider of mapping data and other software solutions, NavInfo has been in competition with Baidu and Tencent, counting BMW and Mercedes Benz among its automotive clients.
According to one of the persons, the smart driving and cockpit assets that its unit is purchasing from Didi are ready for mass production. According to one of the persons, Didi would become AutoAi’s second-largest stakeholder if the asset sale and investment were to go through.
According to the Chinese corporate registry, AutoAi, which split off from NavInfo in 2018, has the parent company as its largest stakeholder with a 30% stake. A unit of MediaTek, a major player in Taiwanese chip design, is second with a nearly 20% investment.
According to insiders, Didi had previously advanced with a project code-named “Da Vinci” to produce electric vehicles. This project employed roughly 2,000 people, and the company had plans to enter production.Since the project’s start in 2021, it has committed more than 10 billion yuan in the EV sector, which includes the development of vehicles, smart driving, and smart cockpit, according to two of the sources.
According to the sources, Didi has just notified possibly impacted workers the most of whom are situated in Beijing about the upcoming AutoAi contract. One source further stated that between 200 and 300 people might be impacted.
Didi’s disposal from last year was its first significant deal since its apps made a comeback to domestic app stores in early 2023, following a regulatory crackdown on its operations that resulted in its delisting from the United States in 2022. The company announced last week that its revenue increased 4.1% to 50.9 billion yuan for the quarter, and that it turned a profit of 1.4 billion yuan for the second quarter, up from a loss of 300 million yuan a year earlier.
