China's Didi gets backing from state-owned carmaker

The company raised billions of dollars in private funding, notably from SoftBank Vision Fund, and was valued at up to USD 60bn. However, days after its USD 4.4bn IPO in mid-2021, Didi was investigated for breaching Chinese data security regulations. The company was barred from onboarding new customers for a while and its stock crashed and never recovered. A delisting was completed in May 2022.

The new investment will come from GAC Capital, a subsidiary of GAC Group, and Guangzhou Development District Investment Group. It will go towards R&D and product development, including the creation of a sustainable automotive industry ecosystem and the commercialisation of autonomous driving, according to a statement.

Didi began exploring autonomous driving technology in 2016 and established an independent subsidiary in this area – called Didi Autonomous Driving – in 2019. SoftBank Vision Fund 2 invested USD 500m in 2020 and IDG Capital led a second round of USD 300m the following year.

Two years ago, Didi announced plans to have more than 1m million self-driving vehicles in operation by 2030, while noting that it was the only company globally with more than 100bn kilometres of autonomous driving data. This comes from robotaxi services in certain parts of Guangzhou and Shanghai that have now been running for 1,200 consecutive days.

Earlier this year, Didi agreed to sell its electric vehicle (EV) unit to Xpeng for USD 744m. Meanwhile, autonomous driving developments continue thick and fast. In April, the company said it would introduce mass-produced robotaxis to its ride-hailing platform in 2025. The vehicles will have level-four autonomy – this involves full autonomy in certain environments but with the option of human override.

Did has also launched Kargobot, an autonomous truck business that already has more than 100 vehicles in operation. Regular trials are conducted on Tianjin-Inner Mongolia route.

Vehicles are developed in partnership with original equipment manufacturers (OEMs). In May, Didi Autonomous Driving agreed to a joint venture with GAC Aion New Energy Automobile – a subsidiary of GAC Group – to mass produce robotaxis.

“The strong support from GAC Group will help us accelerate the construction of an open, sustainable, and mixed dispatching network for shared mobility, providing users with safe, convenient, and cost-effective autonomous driving services,” said Zhang Bo, CTO of Didi and CEO of Didi Autonomous Driving, in response to the most recent investment.

Several ride-hailing platforms emerged to challenge Didi, encouraged to some extent by the incumbent’s regulatory problems. All have some connection to traditional OEMs and one of them was incubated by GAC Group. Ruqi Mobility went on to raise a CNY 842m (USD 117m) Series B round in June.

Didi’s aspirations to create a sustainable automotive industry ecosystem are shared by the OEMs. Survival is the primary motivation. These companies are envisaging a future beyond internal combustion engines. They pursue competency not in EVs and autonomous driving, and they want to provide services that feed and feed off the commercialisation of such technologies.

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• Topics
• Greater China
• Expansion
• Technology
• China
• Didi Chuxing
• Growth capital
• autonomous driving
• automobiles