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Chinese carmaker Xpeng has launched a low-priced electric vehicle based on technology sifted from the ashes of ride-hailing group Didi’s thwarted efforts to break into the country’s highly competitive automotive sector.
The Mona M03 saloon, based on an unfinished car project Didi sold to Xpeng for HK$5.84bn ($744mn) last year, features a Tesla-like button-free dashboard and an artificial intelligence-powered self-driving system.
With a starting price of just Rmb119,800 ($16,800), half that of Tesla’s Model 3 standard version, the M03 is competing against the US EV manufacturer and models offered by Chinese domestic market leader BYD.
He Xiaopeng, Xpeng co-founder and chief executive, said at a launch event in Beijing on Tuesday night that it was “the only car with advanced autonomous driving” selling for less than Rmb200,000. The “Max” version with self-driving features starts at Rmb155,000.
Didi has been forced to rein in its ambitions since becoming a prime victim of Beijing’s tech crackdown when it listed on the New York Stock Exchange in 2021.
It subsequently delisted and suffered restrictions on signing up new customers and drivers, as well as an Rmb8bn fine for “vile” breaches of China’s data security laws.
“Didi sold the project to Xpeng due to financial issues,” said Wu Zhefeng, a Mona product manager who moved to Xpeng from Didi after the acquisition. A new car project required heavy investment “that was very challenging for Didi”, he added.
“The more in-depth co-operation with NavInfo and AutoAi will be centred on the area of smart transport, exploring more scenarios of intelligent mobility,” Didi said in a statement.
Didi recently sold its smart driving and “cockpit assets” unit AutoAi to state-backed digital mapping company NavInfo for Rmb450mn, according to a stock exchange filing on Wednesday.
The sale of its car-related businesses contrasts with the initial success of Chinese tech giant Huawei in establishing itself as a leading supplier to EV makers and its rival Xiaomi’s rapid launch of its own electric vehicle.
Xpeng’s He said Didi’s design concept and use of its driver data in the development of self-driving had meant major savings that made it easier to push down the M03’s price.
The new model was not intended for use in the ride-hailing company’s fleet or those of its rivals, he said, adding: “Our vision is instead to [serve] young individual customers who favour autonomous driving technologies.” The Max version can park itself without anyone behind the wheel and drive itself on frequently visited roads.
Analysts said the M03 marked a departure from Xpeng’s established image as a premium EV brand and would take the Volkswagen-backed company into the crowded affordable market segment dominated by BYD.
Xpeng’s move to widen its range is seen as an effort to boost sales volumes even at the expense of profit margins amid a prolonged price war in the world’s largest car market.
“Considering the stiff competition in the Chinese market, car companies only care about how to win as many orders as possible with an attractive price, while neglecting the costs,” said Li Yanwei, a member of the China Automobile Dealers Association’s expert committee.
The Mona M03 passed 10,000 orders within an hour of going on sale, Xpeng said in a social media post on Tuesday. The carmaker delivered 30,200 cars in the second quarter, a fraction of BYD’s 982,700 units in the same quarter.
With the new model set to squeeze Xpeng’s profitability, its chief executive acknowledged it faced a major challenge.
“Only seven major automakers will survive in the Chinese market over the coming decade,” He said at the launch, adding that annual sales of 1mn AI-equipped cars would be “the ticket to the final battle”.
Additional reporting by Wenjie Ding in Beijing
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