Chinese electric vehicle manufacturer Xpeng has launched a new, affordably priced electric car that incorporates technology acquired from ride-hailing giant Didi’s failed attempt to enter the highly competitive automotive market in China. The Mona M03 saloon, which Xpeng developed using an unfinished car project it purchased from Didi for HK$5.84bn (£744mn) last year, boasts a minimalist, button-free dashboard reminiscent of Tesla’s design and an advanced artificial intelligence-powered self-driving system.
Xpeng co-founder and chief executive He Xiaopeng announced at the Beijing launch event on Tuesday evening that the M03 is the only car in its price range to offer advanced autonomous driving features. The “Max” version, which includes the self-driving capabilities, starts at just Rmb155,000 (£21,700), while the base model of the M03 range begins at an even more impressive Rmb119,800 – half the price of Tesla’s standard Model 3. This positions the M03 to compete directly with Tesla and models from Chinese market leader BYD.
Didi, once a rising star in the tech industry, fell victim to Beijing’s crackdown on technology companies after its New York Stock Exchange listing in 2021. The company subsequently delisted, faced restrictions on acquiring new customers and drivers, and was hit with an Rmb8bn fine for serious violations of China’s data security laws. As a result, Didi was forced to scale back its ambitions and sell off its car project to Xpeng.
According to Mona product manager Wu Zhefeng, who transitioned to Xpeng from Didi following the acquisition, the sale was driven by Didi’s financial constraints. The heavy investment required for a new car project proved too challenging for the embattled ride-hailing firm.
Wu noted that Didi’s design concept and the utilisation of its driver data in developing the self-driving technology allowed for significant cost savings, enabling Xpeng to offer the M03 at such a competitive price point. He emphasised that the new model is aimed at young, individual customers who value autonomous driving technologies rather than being intended for use in ride-hailing fleets.
The M03 Max version is capable of self-parking without a driver behind the wheel and can drive itself on frequently travelled routes. Industry analysts view the M03 as a strategic shift for Xpeng, which has traditionally been perceived as a premium EV brand. By entering the crowded affordable market segment, Xpeng appears to be prioritising sales volume over profit margins amidst an ongoing price war in the world’s largest automotive market.
The Mona M03 has already garnered significant interest, with Xpeng reporting over 10,000 orders within the first hour of the car going on sale. However, the new model’s impact on Xpeng’s profitability remains a concern. Chief executive He Xiaopeng acknowledged the challenges ahead, stating that only seven major automakers are likely to survive in the Chinese market over the next decade. He believes that annual sales of 1 million AI-equipped cars will be essential for companies to remain competitive in the long run.
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