Toyota is prepping a sizable equity investment in Chinese ride-hailing leader Didi Chuxing as part of a broader partnership discussion to help Didi drivers rent Toyota vehicles, Nikkei reported. The Japanese company has gotten closer to ride-hailing companies than any other automaker: before Didi, Toyota had invested or agreed to invest nearly $2 billion in Uber and Grab, the southeast Asia ride-hailing leader. It makes sense: ride-hailing drivers that don’t own a vehicle need to rent one for the job, and vehicles like the gas-electric hybrid Prius are among the most economical choices. Also, Toyota is closely aligned with SoftBank, the biggest financial backer of the ride-hailing companies.
If this were a primarily financial decision for Toyota, it might not look so great: Toyota’s $500 million investment in Uber last year is worth about $400 million right now. (One question is whether Didi will use the additional capital to continue to try to expand in territories where Uber is a leading players, such as Brazil.) And while Didi got a paper valuation of around $50 billion, including its cash, more than a year ago, the recent Uber IPO might raise even more questions about the valuation math. But these services are here to stay and there’s plenty of ways for Toyota to benefit as a partner.