XPeng's New '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. XPeng plans to launch zero-emission models priced at around 150,000 RMB ($20,500). The carmaker will purchase the development project for approximately $744 million in an all-stock deal, with Didi becoming a strategic shareholder and assisting with the development of upcoming models. The first model, codenamed 'Mona,' is expected to be released next year.

XPeng, known for selling premium EVs, aims to enter the low-budget segment with the Mona brand, expanding its presence in the industry and boosting sales. This move comes at a crucial time to compete with rivals such as BYD and NIO, who have been launching affordable models and establishing mass-market brands respectively.

The debut product of the Mona 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 an anticipated market release in the fall, priced at around RMB 150,000 ($20,500). XPeng and Didi Global will also collaborate on various aspects, including marketing, financials, insurance, charging infrastructure, ride-hailing services, and international expansion.

In order to focus on the new Mona brand, Didi Global has decided to discontinue the Da Vinci project. XPeng will take over some of the R&D staff and equipment from Da Vinci to support the development of Mona.

With competition intensifying 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 background in car manufacturing, 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 total EV sales in the country. In comparison, Tesla sold 294,000 cars manufactured at its Shanghai plant, while BYD accounted for 550,000 units. XPeng hopes that the introduction of the Mona brand will improve its sales performance.

According to Reuters, Didi will hold around 3.25% of XPeng's shares following the transaction, valued at $474 million. If delivery targets are met, the deal could be worth up to $744 million, with Didi's stake potentially reaching 5.26%.

The Chinese automaker plans to produce at least 100,000 Mona cars annually, targeting retail customers in China and Norway. Expansion to Sweden and the Netherlands is also in the pipeline, but there are currently no immediate plans to enter the United States market, despite XPeng being listed on the New York Stock Exchange.

FutureCar Staff