XPeng's 'Mona' Brand to Introduce Budget-Friendly EVs Priced at Approximately $20,000

author: FutureCar Staff    

China's XPeng is set to acquire Didi Global's Smart electric car division, paving the way for the launch of a new and affordable brand of electric vehicles. The move will enable XPeng to introduce zero-emission models priced at approximately 150,000 RMB ($20,500).

The acquisition will be an all-stock deal valued at around $744 million, with Didi becoming a strategic shareholder and assisting XPeng in the development of upcoming models. The first model, codenamed 'Mona,' is expected to be released next year.

XPeng, known for selling premium EVs, will now enter the low-budget segment, expanding its presence in the industry and boosting sales. This move also helps XPeng compete with rivals such as BYD and NIO, who have already launched affordable electric models.

The debut product under the new brand will be the A-class Smart EV, similar in size to the BYD Qin. Production is scheduled to begin in the second half of 2024, with a market release in the fall at a price of approximately RMB 150,000 ($20,500). XPeng and Didi Global will collaborate on various aspects, including marketing, finance, insurance, charging infrastructure, ride-hailing services, and international expansion.

Didi Global, in order to focus on the Mona brand, has abandoned the Da Vinci project. XPeng will take over some of the R&D staff and equipment from Da Vinci for use in the development of Mona.

Given the intense competition in China's EV market, this partnership has the potential to keep XPeng competitive and establish Didi as a player in EV manufacturing. Without a car background, it would be challenging for companies to keep up with the industry.

In the first half of 2023, XPeng sold approximately 41,000 electric cars in China, accounting for nearly 2% of the country's total EV sales. In comparison, Tesla sold 294,000 cars, all manufactured at its Shanghai plant, and BYD accounted for 550,000 units. XPeng is optimistic that the introduction of the Mona brand will lead to improved sales performance.

According to Reuters, Didi will hold around 3.25% of XPeng shares following the transaction, worth a total of $474 million. If delivery targets are met, the deal could reach $744 million, with Didi's stake increasing to 5.26%.

XPeng plans to produce at least 100,000 Mona cars per year, targeting both retail customers and the Chinese and Norwegian markets. While there are plans to expand to Sweden and the Netherlands, XPeng currently has no immediate intention to enter the United States market, despite being listed on the New York Stock Exchange.

FutureCar Staff