China’s Xpeng prices new budget EV at $16,813

BEIJING (Reuters) -Chinese electric vehicle maker Xpeng (NYSE:) priced the first model of its budget sub-brand MONA at $16,813 on Tuesday, wedging into the mainstream but highly competitive segment of the world’s largest auto market.

The MONA M03 electric hatchback coupe is Xpeng’s most affordable model and will compete with other EVs priced in the 100,000-150,000 yuan ($14,035-$21,052) range, which accounts for a third of total car sales in China.

There will be two versions of the MONA M03: an entry-level one without advanced autonomous driving technology available from $16,813, and the M03 Max that uses Tesla-like technology and is priced from $21,866. Both are cheaper than the lowest priced Xpeng-branded EV, the P5 sedan, which is priced from $22,000.

Deliveries of the M03 Max, “the only car with advanced autonomous driving at less than 200,000 yuan ($28,068)”, will start early next year, said He Xiaopeng, co-founder and CEO of XPeng Motors. He was speaking at a launch gala in Beijing that also celebrated the Guangzhou-based carmaker’s 10th anniversary.

Xpeng developed the Mona brand after it acquired the EV development unit from Didi Global, the Chinese ride-hailing company that has pulled back significantly from the ultra-competitive electric vehicle market.

With Mona, loss-making Xpeng expects to achieve a better economy of scale to break even. The company said previously that it expected annual sales of at least 100,000 MONA cars.

Xpeng’s gross profit margin has improved this year thanks to a 20% increase in the number of EVs sold in the first seven months from a year earlier and a revenue boost from offering technology services to Volkswagen (ETR:).

($1 = 7.1256 renminbi)