XPENG’s strategic business transaction with the Volkswagen Group

Following leading Chinese smart electric vehicle (“Smart EV”) company XPENG Inc. (NYSE: XPEV, HKEX: 9868) (“XPENG”)’s announced strategic business transactions with the world’s leading automobile manufacturer the Volkswagen Group to jointly develop two B-class battery electric vehicles for sale in the Chinese market under Volkswagen brand (the “BEV Development”) and to issue to the Volkswagen Group shares of representing 4.99% of the total issued and outstanding shares of XPENG for a total purchase price of approximately US$705.6 million (the “Share Issuance”), on December 6, 2023, XPENG announced the closing of the Share Issuance and that the project feasibility study on the BEV Development has completed with positive outcome.

Fangda Partners is continuing to represent XPENG in the strategic collaboration of the BEV Development and the Share Issuance. The Fangda team on this deal is led by partners Jeffrey Ding (Capital Markets), Norman Zhong (Corporate/M&A) and Claudia Yun (Intellectual Property), and the team members include counsels Joyce Pei and Jason Xu, with support from associates Cassie Chang, Zoe Hu and Kyle Liu.

XPENG’s strategic partnership with DiDi

Leading Chinese smart electric vehicle (“Smart EV”) company XPENG Inc. (NYSE: XPEV, HKEX: 9868) (“XPENG”) and world’s leading mobility technology platform DiDi Global Inc. (“DiDi”) announced a strategic partnership on August 28, 2023. The partnership brings together the commercial and technological strengths of both companies and will significantly accelerate the adoption of Smart EV and technologies in the mass market.

Initial closing of this transaction has commenced on November 13, 2023. XPENG issued Class A ordinary shares, representing approximately 3.25% of its outstanding share capital upon the completion of the issuance as the Initial Consideration Shares to DiDi, to acquire the assets and R&D capabilities related to DiDi’s Smart EV project. DiDi becomes a strategic shareholder of XPENG. The newly-developed Smart EV under this project will enter the market as XPENG’s first product of the new brand after transaction.

XPENG becomes the first automotive manufacturing company drawing on DiDi’s comprehensive ecosystem. Both parties will explore strategic cooperation in a number of areas, including marketing, financial and insurance services, charging, Robotaxi and international market expansion.

Fangda acted as PRC legal counsel to XPENG and advised on PRC related transactions throughout the whole project. The team on this deal is led by partners Jeffrey Ding (Capital Markets), Norman Zhong (Corporate/M&A) and Claudia Yun (Intellectual Property), and main team members included counsels Zhangxian Chen, Cindy Zhang, Qian Guan and Cassie Chang, with support from associates Zhuxin Liu, Wyatt Zhang and Kyle Liu.