Xpeng Launches Budget Sub-Brand MONA, Aims to Dominate China’s Market

Chinese electric vehicle maker Xpeng has announced the pricing for the first model of its budget sub-brand, MONA, starting at $16,813. The MONA M03, an electric hatchback coupe, is Xpeng’s most affordable model to date.

It targets the mainstream, highly competitive segment of the Chinese auto market, specifically the 100,000-150,000 yuan ($14,035-$21,052) range, representing a third of all car sales in the country.

Two Versions to Cater to Different Market Segments:

The MONA M03 will be available in two versions. The entry-level model, priced at $16,813, does not include advanced autonomous driving technology. Meanwhile, the M03 Max, equipped with Tesla-like technology, starts at $21,866. Both models are priced lower than Xpeng’s P5 sedan, which begins at $22,000.

According to He Xiaopeng, co-founder and CEO of Xpeng Motors, deliveries of the M03 Max—billed as “the only car with advanced autonomous driving at less than 200,000 yuan ($28,068)”—are expected to start early next year. He announced a launch event in Beijing, which also marked Xpeng’s 10th anniversary.

Strategic Acquisition and the Birth of MONA:

The MONA brand was developed after Xpeng acquired the EV development unit from Didi Global, the Chinese ride-hailing giant. Didi has significantly reduced its involvement in the ultra-competitive electric vehicle market, opening the door for Xpeng to leverage the acquisition for MONA’s development.

With the MONA brand, Xpeng aims to achieve better economies of scale, which could help the company break even. The company has previously stated that it expects to sell at least 100,000 MONA vehicles annually.

Improving Profit Margins and Strategic Partnerships:

Xpeng’s gross profit margin has shown improvement this year, driven by a 20% increase in EV sales during the first seven months compared to the previous year.

Additionally, Xpeng has boosted its revenue by offering technology services to Volkswagen, further strengthening its financial position.

Competition with Nio’s Onvo and the Broader EV Market:

Xpeng’s Chinese rival, Nio, also entered the lower-priced EV market with the launch of its Onvo brand in April. The Onvo L60, set to launch in September, is expected to compete directly with Tesla’s best-selling Model Y in China.

Both Xpeng’s MONA and Nio’s Onvo brands have opted not to include lidar sensors in their advanced autonomous driving technologies. Similar to Tesla’s camera-only Full-Self Driving system, this approach helps reduce hardware costs, making these EVs more accessible to consumers.

While the price of lidar sensors has significantly dropped due to increased production by Chinese manufacturers like Hesai Technology, they still add several thousand yuan to a vehicle’s cost.

Xpeng launched the P5 in 2021 as the world’s first mass-produced car with optionally equipped lidar sensors. Since then, the sensor has been removed from the P5 to lower its price to $22,000 and appeal to price-sensitive buyers. Currently, Xpeng’s vehicles with lidar sensors are priced from $31,450.