Beijing, Aug 28 (IANS): In a bid to challenge Tesla’s dominance, ride hailing giant Didi Global on Monday sold its smart EV assets to electric vehicle company Xpeng for nearly $744 million.

DiDi Global and XPeng jointly announced a strategic cooperation where the two will collaborate to promote the global application of smart electric vehicles and technologies.

DiDi will sell certain business assets related to its smart EV development project to XPeng, which aims to launch an A-class Smart EV model in 2024, currently being developed under the project name “MONA”.

The new model and brand will be differentiated from XPENG-branded products and its main brand.

“XPENG's A-class Smart EV products under the new brand will not only significantly increase our scale, but also accelerate the adoption of our Smart EV technologies in the mass market segment, bringing our technologies to a much broader customer base," said He Xiaopeng, Chairman and CEO of XPENG.

The strategic cooperation will also extend to areas such as marketing, financial insurance services, charging and international expansion.

"XPENG has established its leadership position in the Smart EV technologies and intelligent driving technologies. We will continue to deepen our cooperation with XPENG in multiple areas, driving transformation of the transportation and automotive industries,” said Cheng Wei, Chairman and CEO of DiDi.

DiDi offers a wide range of app-based services across Asia Pacific, Latin America and other global markets, including ride hailing, taxi hailing, chauffeur and other forms of shared mobility.

DiDi registered 587 million active users in the 12 months ended March 2023.

One in every seven cars sold during the first quarter this year was an electric vehicle, dominated by China's BYD at 21.1 per cent market share while Tesla was at second spot, with 16 per cent share.

The US surpassed Germany to become the world's second-largest EV market while China remained the leader, according to Counterpoint Research.