XPeng's 'Mona' Brand to Offer Budget-Friendly EVs at $20,000

author: FutureCar Staff    

China's XPeng is set to acquire Didi Global's Smart electric car division, a move that will enable them to introduce a new brand of affordable electric vehicles. This strategic purchase will allow XPeng to launch zero-emission models with a price tag of approximately 150,000 RMB ($20,500).

The deal, valued at around $744 million, will see Didi become a strategic shareholder, providing support to 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 comes at a crucial time, as competitors like BYD and NIO have already entered the affordable EV market.

The initial offering from the new brand will be the A-class Smart EV, similar in size to the BYD Qin. Production is slated to begin in the second half of 2024, with a target price of RMB 150,000 ($20,500). XPeng and Didi Global will also collaborate on various aspects such as marketing, financials, insurance, charging infrastructure, ride-hailing, and international expansion.

To prioritize the development of the Mona brand, Didi Global has discontinued its Da Vinci project. XPeng will take over some of the R&D staff and equipment from Da Vinci for use in the Mona project.

This partnership between XPeng and Didi Global is crucial in the increasingly competitive Chinese EV market, the largest in the world. It will help XPeng stay relevant and establish Didi as a player in EV manufacturing. Without such partnerships, companies without a car manufacturing background would struggle 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 total EVs sold in the country. In comparison, Tesla sold 294,000 cars manufactured at its Shanghai plant, while BYD sold 550,000 units. XPeng is hopeful that the introduction of the Mona brand will improve its market position.

According to Reuters, Didi will hold around 3.25% of XPeng's shares following the transaction, worth a total of $474 million. The deal could potentially reach $744 million if delivery targets are met, resulting in a stake of up to 5.26%.

XPeng plans to produce at least 100,000 Mona cars per year, targeting both retail customers and specific markets such as China, Norway, Sweden, and the Netherlands. However, there are currently no immediate plans to bring these models to the United States, despite XPeng being listed on the New York Stock Exchange.

FutureCar Staff