Didi Global Inc. has agreed to sell its smart car development arm to Xpeng Inc. for HK$5.84 billion ($744 million), exiting a promising business in the world’s largest electric vehicle market.

Xpeng, one of the country’s largest EV makers, will issue shares at HK$64.03 apiece to Didi, the company said in a stock exchange filing.

Didi, once feted as the national champion that drove Uber Technologies Inc. out of the country, was driven off New York’s main bourse after Chinese regulators launched investigations into the security of its data. The company is gradually resuming its car-hailing expansion.

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--With assistance from Peter Elstrom.