China EVs: Xpeng unveils Mona brand with eye on mass-market buyers, global leader BYD

Xpeng unveiled its first model under the new Mona sub-brand, as the Chinese electric-vehicle (EV) maker targets the compact car segment and market leader BYD.

The M03 pure electric compact sedan will come with intelligent features, the Guangzhou-based company announced on the Chinese microblogging site Weibo on Tuesday. Xpeng did not provide details such as the car's driving range and level of automation.

"Xpeng is targeting budget-conscious customers with the new brand," said Chen Jinzhu, CEO of consultancy Shanghai Mingliang Auto Service. "It will rely on Mona's success to increase its market share."

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Xpeng said it will officially launch the Mona brand in late July and also release the growth strategy and development plan for the product line-up.

He Xiaopeng, co-founder and CEO of Xpeng, told an EV forum in Beijing in March that models under the Mona brand will be equipped with autonomous driving systems and will be priced between 100,000 yuan (US$13,785) and 150,000 yuan.

He added that Mona cars could be developed into fully autonomous driving vehicles in the future at about the same price, as the company makes rapid technological advances and improves its manufacturing efficiency.

Xpeng, along with Shanghai-based Nio and Beijing-headquartered Li Auto, are viewed as China's best response to Tesla, the market leader in mainland China.

Xpeng on Tuesday unveiled the Mona sub-brand, with the first model in the line-up called the M03. Photo: Xpeng alt=Xpeng on Tuesday unveiled the Mona sub-brand, with the first model in the line-up called the M03. Photo: Xpeng>

Some of Xpeng's existing production models are capable of self-navigation in many Chinese cities as they are equipped with its proprietary Navigation Guided Pilot system. But human intervention is still required under many circumstances.

Currently, Xpeng's smart EVs are priced at more than 200,000 yuan.

The Mona brand will take on BYD's plug-in hybrid and fully electric cars, which are priced as low as 79,800 yuan.

Shenzhen-based BYD, the world's largest EV builder, delivered 3.02 million electric cars at home and abroad in 2023, a year-on-year increase of 62.3 per cent.

Xpeng reported sales of 141,601 units last year, 17 per cent higher than 2022.

The company is following on the heels of Nio, which launched the cheaper Onvo brand in mid-May.

Nio currently builds premium EVs priced at more than 300,000 yuan.

The first Onvo model, the L60 SUV, starts at 219,900 yuan, 12 per cent, cheaper than the basic edition of Tesla's Shanghai-made Model Y. The L60 has a driving range of 555km, the same as the Model Y.

Cheap battery-powered cars have helped accelerate the transition of mainland China's automotive industry from petrol to EVs. Currently, about four out of every 10 new cars sold in China are powered by batteries.

Last month, BYD unveiled a new and improved version of its plug-in hybrid technology, which can offer a driving range of 2,100km.

Entry-level versions of BYD's new cars fitted with the technology are priced under 100,000 yuan.

China's EV sector is expected to see sales growth of 20 per cent this year, compared with 37 per cent in 2023, according to a forecast by Fitch Ratings in November.

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