Alibaba and Tencent are teaming up with China’s biggest automakers to create a ride-hailing venture, in a potential challenge to Didi Chuxing.
Changan Automobile said in a regulatory filing that it is investing in a new venture that aims to become “China’s most trusted mobility service company.” Other investors include automakers Dongfeng Motor and FAW Group, as well as Alibaba, Tencent and electronics retailer Suning. The new firm is raising about $1.45 billion from the investors.
The new alliance between China’s state-owned automakers and the country’s biggest tech giants could reshape the ride-hailing sector where Didi, whose main investor is SoftBank, has so far been dominant. The move comes as Didi is grappling with tighter regulations that limit its supply of drivers and cars. China’s regulators have increased their scrutiny of Didi in response to the murders of two female passengers by Didi drivers last summer.
While Alibaba and Tencent also own minority stakes in Didi, the ride-hailing company is one of the few Chinese tech firms that are powerful enough to chart its own path, independently from Alibaba and Tencent.