Chinese new energy vehicle startup Xpeng has completed the initial closing for the acquisition of assets related to ride-hailing giant Didi Global's smart electric vehicle business.

Xpeng received all the assets from Didi's Smart EV project, the Guangzhou-based carmaker announced yesterday. In return, Xpeng issued new Class A ordinary shares of the company, representing 3.25 percent of its total equity, to Didi.

The pair will join hands to develop a new smart EV brand called Mona, Xpeng noted, adding that the cooperation will later extend to fields such as smart cockpit, smart driving, charging, and marketing.

Xpeng announced on Aug. 28 that it had signed an agreement with Didi to purchase assets of the latter's Smart EV project. After the acquisition, Didi would become a strategic shareholder of Xpeng, with a lock-up period of 24 months after the initial closing.

According to the valuation adjustment mechanism Xpeng and Didi signed in August, if the Mona project reaches certain milestones, such as the sales target, Xpeng needs to increase the share payment ratio to Didi, with the maximum shareholding ratio set at 5 percent.

The Mona project will integrate Didi's accumulated vehicle development technology with semi-automatic driving system XNGP, smart cabin, and other intelligent software capabilities developed by Xpeng.

Schedule to launch next year, Mona would be Xpeng's second smart car brand, priced at around CNY150,000 (USD20,580), whereas Xpeng's self-branded cars cost from CNY150,000 to CNY350,000.

Mona's launch marks the entry of Xpeng into the multi-brand operation stage, becoming the second emerging car manufacturer in China to start such a layout, He Xiaopeng, chairman and chief executive officer of Xpeng.

Mona-branded cars will be different from the company's existing products and will have an annual sales target of 100,000 units, He noted, adding that the pair plans to leverage Didi’s smart mobility platform and ecosystem to acquire buyers for the new brand.