Alibaba’s Stake in Xpeng Drops Below 5% Following Planned Reduction

Alibaba, the Chinese e-commerce giant, has completed its latest planned reduction of its stake in Xpeng, the electric vehicle (EV) maker, leading to a significant decrease in its ownership percentage. The reduction saw Alibaba’s stake in Xpeng fall to less than 5%, marking a strategic realignment for the company.

On March 22, Alibaba’s Taobao China finalized the sale of 33 million American Depositary Shares (ADSs) of Xpeng, as announced by the Hong Kong stock exchange. Each ADS represents two Xpeng Class A ordinary shares, with an average price per ordinary share of approximately $4.76. Alibaba successfully cashed out $314 million through this transaction.

Prior to the reduction, Alibaba held 141,918,464 ordinary shares of Xpeng, representing a 9.23% stake in the company. Following the completion of the reduction, Alibaba’s ownership of Xpeng ordinary shares decreased to 75,918,464 shares, or 4.94%.

The reduction in Alibaba’s stake in Xpeng is part of the company’s broader strategy to streamline its non-e-commerce related businesses. However, Xpeng reassured stakeholders that the move does not reflect a change in Alibaba’s attitude towards its business and development prospects. The EV maker emphasized that Alibaba and Alibaba Cloud remain among its most important strategic partners, with ongoing collaboration in research and development, marketing, and service systems.

Despite the reduction in Alibaba’s stake, Xpeng remains optimistic about its future prospects and its partnership with Alibaba. The company reiterated its commitment to innovation and growth in the electric vehicle market, underscoring the continued cooperation between the two entities.

As Alibaba adjusts its investment portfolio, Xpeng continues to forge ahead in its mission to revolutionize the automotive industry with cutting-edge technology and sustainable mobility solutions.

Implications for Xpeng and Alibaba

The reduction in Alibaba’s stake in Xpeng may raise questions about the future direction of their partnership and the impact on Xpeng’s operations. However, both companies have emphasized their ongoing cooperation in various strategic areas, including research and development, marketing, and service systems. This indicates a commitment to maintaining a strong relationship despite changes in ownership structure.

For Xpeng, the decrease in Alibaba’s ownership percentage may have minimal immediate impact on its business operations. The company remains focused on its core mission of delivering innovative electric vehicles and expanding its market presence both domestically and internationally. Xpeng’s continued collaboration with Alibaba and Alibaba Cloud underscores its confidence in the strength of their partnership and the value it brings to its growth strategy.

As for Alibaba, the reduction in its stake in Xpeng aligns with its broader strategic realignment efforts. By divesting from non-core businesses, Alibaba aims to streamline its operations and focus on areas where it can generate the highest returns. While the reduction may signal a shift in Alibaba’s investment priorities, its ongoing partnership with Xpeng suggests a continued interest in the future of the electric vehicle industry and the potential for collaboration in other areas.

Overall, while the reduction in Alibaba’s stake in Xpeng may represent a significant development, both companies are poised to navigate this transition and continue their respective paths towards success in the dynamic and rapidly evolving automotive and technology sectors. Read Similar Story