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

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【Summary】XPeng, a Chinese EV company, is acquiring Didi Global's Smart electric car division to launch an affordable brand called 'Mona.' The new brand will offer zero-emission electric cars priced around $20,500. Didi will become a strategic shareholder and assist in developing the upcoming models. The first model, an A-class Smart EV, is expected to enter production in the second half of 2024. XPeng aims to increase its presence in the industry and compete with other low-budget EV brands in China.

FutureCar Staff Aug 29, 2023 6:14 AM PT

China's XPeng is set to acquire Didi Global's Smart electric car division, a move that will enable them to introduce a new line of affordable electric vehicles. The carmaker plans to launch emission-free models priced at around 150,000 RMB (approximately $20,500). The acquisition, valued at $744 million, will make Didi a strategic shareholder, providing assistance in the development of upcoming models. The first model, codenamed 'Mona,' is expected to be released next year.

XPeng has primarily focused on selling premium electric vehicles, but with the introduction of the Mona brand, they aim to enter the low-budget segment. This strategic move will expand the company's presence in the industry and boost sales figures, allowing them to compete with rivals such as BYD and NIO, who have already launched affordable models.

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

As part of the focus on the Mona brand, Didi Global has abandoned the Da Vinci project. XPeng will take over some of the R&D staff and equipment from the project, utilizing them for the development of Mona. The partnership between XPeng and Didi Global is crucial in the highly competitive Chinese EV market, allowing XPeng to stay relevant and establishing Didi as a player in EV manufacturing.

XPeng sold approximately 41,000 electric cars in China during the first half of 2023, accounting for nearly 2% of the total EVs sold in the country. In comparison, Tesla sold 294,000 cars from its Shanghai plant, while BYD accounted for 550,000 units. XPeng hopes that the introduction of the Mona brand will improve its market position.

According to Reuters, Didi will gain a 3.25% stake in XPeng following the transaction, with shares valued at $474 million. If delivery targets are met, the deal could reach $744 million, resulting in Didi holding a stake as high as 5.26%. XPeng plans to produce at least 100,000 Mona cars annually, targeting both retail customers and specific markets such as China, Norway, Sweden, and the Netherlands. However, there are currently no plans to expand into the United States, despite being listed on the New York Stock Exchange.