On December 17, 2023, Alibaba announced that it would sell part of its stake in Xpeng Motors. The sale would reduce Alibaba’s stake from 10.2% to 7.5%, and would generate about US$3.91 billion in proceeds.
Alibaba said that the sale was in line with its capital management goals. The company is looking to improve its return on capital and shareholder value, and the sale would free up cash.
Xpeng Motors said that it was not concerned about the sale. The company said that Alibaba remains its second-largest shareholder, and that the two companies will continue to collaborate on strategic initiatives, such as cloud computing.
Xpeng Motors has been performing well in recent months. The company’s third-quarter revenue increased 25% year-over-year to RMB 6.1 billion, and its deliveries increased 245% year-over-year to 20,041 units.
The sale of Alibaba’s stake in Xpeng Motors is a significant development, but it is unlikely to have a major impact on either company. Alibaba remains Xpeng’s second-largest shareholder, and the two companies will continue to collaborate on strategic initiatives.
The sale is likely due to a combination of factors, including Alibaba’s desire to improve its capital efficiency and its belief that Xpeng is no longer a high-growth investment. Alibaba has been under pressure to improve its profitability in recent years, and the sale of Xpeng shares would generate cash that could be used to invest in other areas of the company.
Xpeng Motors is still a relatively young company, and it is facing increasing competition from rivals such as Tesla and BYD. The sale of Alibaba shares could be seen as a sign that the company is not as attractive an investment as it once was. However, Xpeng Motors is still growing rapidly, and it has a strong management team. The company is likely to remain a major player in the Chinese electric vehicle market.
