Xpeng, a Chinese electric vehicle (EV) maker, has recently introduced its budget sub-brand called MONA. The first model in this lineup is the MONA M03 electric hatchback coupe, priced at $16,813. This affordable EV will compete in the highly competitive segment of the Chinese auto market, where EVs priced between 100,000-150,000 yuan ($14,035-$21,052) make up a significant portion of total car sales.
The MONA M03 will be available in two versions: an entry-level model without advanced autonomous driving technology and the M03 Max, which utilizes Tesla-like technology. Both versions are priced below Xpeng’s lowest priced Xpeng-branded EV, the P5 sedan, which starts at $22,000. The M03 Max, priced at $21,866, will be the only car with advanced autonomous driving features available for less than 200,000 yuan ($28,068) and is set to be delivered early next year.
Xpeng’s decision to develop the MONA brand came after acquiring the EV development unit of ride-hailing company Didi Global. This move aims to help Xpeng achieve better economies of scale and eventually break even. Xpeng predicts annual sales of at least 100,000 MONA cars, which will contribute to the company’s improved gross profit margin. In the first seven months of this year, Xpeng recorded a 20% increase in the number of EVs sold compared to the same period last year. Additionally, the company has generated revenue by providing technology services to Volkswagen.
Xpeng is not the only Chinese EV manufacturer to introduce a lower-priced brand. Its rival, Nio, launched a similar initiative called Onvo in April. The Onvo L60, set to go on sale in September, aims to compete with Tesla’s popular Model Y in the Chinese market. Both the Onvo and MONA EVs adopt a strategy similar to Tesla’s camera-only Full-Self Driving, which reduces hardware costs by excluding lidar sensors from their advanced autonomous driving technologies. While lidar sensors cost several thousand yuan, their price has dropped significantly in recent years due to increased production by Chinese lidar makers.
Interestingly, Xpeng initially launched its P5 model with lidar sensors, making it the world’s first mass-produced car with optional lidar. However, in September last year, Xpeng removed the lidar sensor from the P5 to lower the starting price to $22,000 and attract price-sensitive consumers. Currently, Xpeng’s cars equipped with lidar sensors are priced at $31,450.
Xpeng’s introduction of the MONA brand and the affordable MONA M03 model demonstrates the company’s commitment to capturing a larger share of the Chinese EV market. By offering competitively priced EVs with advanced autonomous driving features, Xpeng aims to capitalize on the growing demand for affordable and technologically advanced electric vehicles. With the launch of the MONA M03 and the success of Xpeng’s overall EV sales, it’s clear that Chinese EV manufacturers are actively adapting their strategies to meet the needs and preferences of the Chinese consumer market.