Although the acquisition of the MONA brand is a very wise decision for Xpeng Motors, the problems faced by MONA also need to be mitigated by Xpeng Motors.
In August 2023, Xpeng Motors and Didi reached a strategic cooperation. According to the relevant cooperation agreement, Xpeng Motors issued Class A ordinary shares, accounting for 3.25% of the total share capital after the completion of the transaction, at a price of 5.835 billion yuan, to acquire the assets and R&D capabilities related to Didi's smart electric vehicle project. Didi will become a strategic shareholder of Xpeng, with a 24-month lock-up period for the first shares.
Didi's internal codenamed "Da Vinci" car-making project has officially become Xiaopeng's second brand - MONA, the most noteworthy thing is that in order to ensure the normal development of the MONA brand, the two sides also signed a VAM agreement, if Didi sells 100,000 vehicles per year in the travel system, there will be additional consideration to pay; If sales reach 180,000 units per year and this target is achieved for two consecutive years, the highest transaction consideration could be 5% of Xpeng's Class A common stock after the transaction is completed.
Source: Xpeng Motors
At this year's Beijing Auto Show, Xpeng officially released the MONA brand, which means Made Of New AI, and the new brand is positioned as a global popularizer of AI intelligent driving cars. Immediately after June, the first model of the MONA series was named Xpeng M03, according to the official information, the car's drag coefficient is only Cd 0.194, known as "the world's lowest wind resistance of the mass-produced pure electric hatchback sedan", the new car will be launched in the third quarter of this year.
Although the Xpeng M03 has not yet been officially launched, and the market performance is unknown, with Didi's gambling guarantee, the starting point of the Xpeng M03 will not be low, and for the current Xpeng Motors, increasing sales has become more and more important.
MONA is the hope of the whole village
Judging from the sales performance, Xiaopeng has been half a beat slower. According to the data, in May 2024, Xpeng Motors delivered a total of 10,146 new vehicles, a year-on-year increase of 35% and a month-on-month increase of 8%. From January to May 2024, Xpeng delivered a total of 41,360 new vehicles, a year-on-year increase of 26%.
Sales are up year-on-year, but they are still far from their annual sales target of 280,000 units. As of May, Xpeng was 14.6% of its annual sales target.
In the same period, Ideal and Weilai both delivered their best results this year in May, of which Ideal delivered 35,020 new cars, a year-on-year increase of 23.8% and a month-on-month increase of 35.80%; NIO delivered 20,544 new vehicles, up 233.8% year-on-year and 31.5% month-on-month, a record high. In contrast, Xiaopeng's monthly sales volume of just breaking 10,000 is much lighter.
The automotive industry is an industry with extremely high requirements for scale, and it is difficult for car companies to form their own competitiveness without "scale effect", which is a problem that all new forces must face, in order to pursue a larger market share, the ideal began to break through to the pure electric market, and Weilai and Xiaopeng have planned a second brand.
Unlike brands such as Leap, Nezha, and AVATR that have entered the extended range market from pure electric vehicles, NIO and Xpeng still stick to the pure electric market. However, the growth rate of the pure electric market has slowed.
Source: Xpeng Motors
According to the data of the Passenger Association, the wholesale sales of pure electric vehicles in May were 531,000 units, a year-on-year increase of 9.4% and a month-on-month increase of 14.8%; The overall sales volume of plug-in hybrids was 276,000 units, an increase of 84% year-on-year and 8% month-on-month; Wholesales of range-extender hybrids in May were 91,000 units, up 105% y/y and 27% m/m. Pure electric, plug-in hybrid, and extended range products accounted for 71% of new energy vehicles, plug-in hybrid, and 6% of range extenders, respectively.
Plug-in hybrid and range extension are the sources of growth in the current new energy vehicle market, and the market share of pure electric vehicles has stabilized, while before the breakthrough in battery technology, problems such as range anxiety and charging difficulties will still plague the development of the pure electric market. Ledao continues NIO's battery swap system to avoid such a problem, while MONA puts the breakthrough point in the field of intelligent driving, hoping to impress more consumers through the popularization of high-end assisted driving.
Although the industry has broken the news more than once that Xiaopeng will lay out range extender models, He Xiaopeng has denied again and again that at the financial report analysis meeting in the first quarter of this year, He Xiaopeng once said: "Customers have real demand for hybrids" and "What is the next generation of range extenders, this is what we think more about".
Compared with the hesitation in the extended-range layout, Xpeng is quite firm in the field of intelligent driving, and as long as it can play the role of a popularizer of assisted driving, Xpeng's existential crisis will no longer exist.
According to the first-quarter financial report, Xpeng Motors' revenue in the first quarter of this year was 6.55 billion yuan, a year-on-year increase of 62.3%. Among them, the revenue of automobile business was 5.54 billion yuan, a year-on-year increase of 57.8%. At the same time, Xpeng Motors had a net loss of 1.37 billion yuan in the first quarter, a significant decrease from 2.34 billion yuan in the same period in 2023.
In addition to the improvement of the automobile business, "technology for profit" has also played a greater role. According to the financial report, in the first quarter of this year, Xiaopeng Motors' service and other sales were 462 million yuan, 100 million yuan more than the revenue of 366 million yuan in the same period last year, which was mainly due to the technical benefits obtained from cooperation with Volkswagen.
Source: Xpeng Motors
With the arrival of the MONA brand, Xpeng will also popularize urban NOA to the market of less than 150,000, so that young people's first car can also have industry-leading high-end assisted driving functions. Although it is still unknown whether this move can promote the re-development of pure electric vehicles, it is certain that with the support of Didi's gambling orders, MONA's sales base will not be low, and this can help Xpeng obtain rich data sources to optimize its own assisted driving experience, and at the same time establish its own identity as a leader in assisted driving, it can also improve the operating status of Xpeng Motors through technology monetization, and accumulate strength for long-term development.
Modle 2 is the number one predator
"MONA is a production model with a very high degree of completion, and Didi has developed billions of dollars and is an attractive asset. All of MONA's R&D and testing equipment assets and core personnel team will also join Xpeng. ”
"MONA will be equipped with Xpeng's XNGP assisted driving function, and the cooperation between Xpeng and Didi can accelerate technological equality, and then realize the decentralization of high-end assisted driving functions." When Xiaopeng acquired MONA last year, He Xiaopeng had already clarified the mission of this new brand.
But this positioning completely coincides with the role of Tesla Modle 2.
At Tesla's annual shareholder meeting held on June 14, the silhouette of the new Modle 2 was clearly visible, although it was concealed, and the biggest feature of the car is that it is cheap and can be equipped with FSD advanced driver assistance functions. Combined with the information that FSD has been approved to start testing in Shanghai, Tesla is about to enter the high-end assisted driving market for 150,000-level models.
This undoubtedly put a lot of pressure on Xpeng Motors, in order to avoid head-on competition with Tesla, the price of Xpeng M03 was lowered, and it is reported that M03 will be positioned at 10~150,000 yuan, which is more competitive than Modle 2. In addition, He Xiaopeng personally went to the United States to explore the level of FSD.
Source: He Xiaopeng Weibo
On June 25, He Xiaopeng posted a video on Weibo to experience Tesla's FSD intelligent driving experience in the United States. He said: "After the whole experience, the performance of FSD is still very silky. Most of the road handling gives me a lot of peace of mind, much like a human driver. But China's roads are more complex than those in the United States, with more people and vehicles, and it is interesting to see how FSD will perform in China after the event. ”
In addition to praising Tesla, He Xiaopeng also took advantage of the trend to promote a wave of its own products, he said, "At present, our XNGP has fully adapted to China's road conditions, and we invite @ElonMusk to come to China to experience XNGP, and we also look forward to more exchanges in the entire industry to jointly promote the popularization of intelligent driving in the world."
Obviously, in He Xiaopeng's view, the current FSD is not enough to cope with China's complex road environment, and Xpeng's XNGP still has advantages.
But this does not mean that Xpeng can despise its opponents, first, because Tesla has a strong brand appeal and is easier to be recognized in the consumer market; Secondly, Tesla has a huge sales support in China, and all provide AP (basic version of assisted driving) function, and some domestic users subscribe to EAP (enhanced version of assisted driving) function, if Tesla uses the data accumulated by these models to optimize the ability of FSD, FSD will become a high probability event in the Chinese market to achieve a high level of rapid landing.
In this context, Xpeng Motors can only accelerate the mass production and delivery of M03, seize the opportunity, rapidly expand its market share, and accelerate the iteration of assisted driving functions while achieving rapid shipments, only in this way can Xpeng grasp the initiative in the fierce market competition.