A ride-hailing service operated by China’s largest homegrown automaker SAIC Motor has received a 300 million yuan ($46 million) strategic investment from e-commerce giant Alibaba and Tesla battery supplier Contemporary Amperex Technology (CATL), as it accelerates its drive into the burgeoning market dominated by Didi Chuxing.

The deal, which was announced on Friday, will allow SAIC’s Xiangdao Chuxing to jointly develop technologies related to big data, autonomous driving and new energy vehicles, Xiangdao said.

Simultaneously, Xiangdao also announced it will absorb Shencheng Chuxing, a taxi-hailing platform SAIC rolled out in partnership with the Shanghai municipal government earlier this year. Xiangdao will also absorb SAIC’s electric vehicle rental service EvCard, which operates across more than 60 Chinese cities with over 8 million registered users.

“Nearly 100 million people in China have driver’s licenses but do not have a (private) car, potentially representing strong demand for individual-facing car rental services,” said Xiangdao’s CEO Wu Bing. Wu added that the businesses of ride-hailing and car rental are complementary, and can improve service efficiency and reduce operating costs.

SAIC launched the Xiangdao brand in 2018 in search of a new growth drivers, following a number of other major Chinese carmakers moving into the market dominated by Didi.

SAIC is China’s largest domestic automaker, and has separate joint ventures with General Motors and Volkswagen. It sold 4.85 million vehicles in the first 11 months of 2020, down 12.4% year-on-year.

Contact reporter Ding Yi (yiding@caixin.com)

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