Toyota pushes EV sales in China with $600 million investment in Didi

2 min read
<em>In this image from Didi Chuxing, Stephen Zhu, senior vice president of Didi (left), and Shigeki Tomoyama, Toyota executive vice president attend the signing recently in Tokyo, Japan. (Image credit: Didi Chuxing) </em>
In this image from Didi Chuxing, Stephen Zhu, senior vice president of Didi (left), and Shigeki Tomoyama, Toyota executive vice president attended the signing recently in Tokyo, Japan. (Image credit: Didi Chuxing)

Didi Chuxing on Thursday announced that it has closed a $600 million investment deal from Toyota Motor Corporation to jointly offer auto services for ride-hailing drivers on Didi’s platform.

Why it matters: The deal marks a big step forward for Didi, which seeks closer ties with traditional automakers to extend its dominance in the Chinese ride-hailing market. Other players across mobility and internet sectors, from OEMs to bike-rental firms to lifestyle platforms, are taking aim at the ride-hailing market in direct competition with Didi.

  • Didi began setting up its mobility-automotive industry alliance in April 2018, and has wooed upwards of 30 OEMs and key suppliers worldwide in an aim to offer shared mobility services with new energy vehicles.
  • State-owned automakers FAW, Chinese largest private car company Geely, and German automaker Volkswagen are some of its allies.

Details: Toyota, Didi, and GAC Toyota Motor will establish a joint venture offering car leasing, fleet management, and other vehicle-related services, said a Didi spokesman. Guangzhou-based GAC Toyota itself is a car manufacturing company formed between automakers GAC Group and Toyota in 2004.

  • The two companies are also piloting services to drivers including car maintenance and self-driving guidance based on Toyota’s proprietary mobility services platform (TMSP), a form of information infrastructure that supports various mobility services.
  • Toyota and Didi first partnered in January 2018, when the Japanese auto giant unveiled “e-Palette,” a driverless all-electric concept vehicle designed for a range of Mobility as a Service (MaaS) businesses. Didi was one of the partners in testing vehicles for a variety of functions, including on-demand delivery and carpooling, apart from Amazon and Pizza Hut.
  • Speculation about Toyota’s investment in Didi has been circulating since May this year. Didi is now valued at about $62 billion.

“I am delighted that we are strengthening our collaboration—which utilizes Toyota’s connected technologies and next-generation BEVs—with DiDi … Looking ahead, we will work with DiDi to develop services that are more attractive, safe and secure for our customers in China.”

—Shigeki Tomoyama, Toyota executive vice president

Context: Global automakers and Chinese ride-hailing firms are shifting focus to comply with the central government’s goal of one electric car out of every five vehicles sold in 2025.

  • Toyota said in June that it expects to sell 5.5 million electrified vehicles worldwide in 2025, moving up the target date by five years. This was followed by the partnership with China’s largest EV maker BYD earlier this week, with an aim to launch 10 battery electric vehicle models to the Chinese market over the next five years.
  • T3 Chuxing, a Chinese ride-hailing company co-established by three state-backed automakers, said Monday that it plans to purchase 300,000 cars over the next three years, and its fleet will consist entirely of electrified cars.
  • Beijing municipal government will replace all gas-powered taxis with electric cars over the next two years. More than 20 Chinese municipal governments are following suit, including the southwestern Chinese city of Chengdu and Xi’an, capital of western Shanxi province.