How Chinese Cars Like The XPeng Mona M03 Will Impact The Global Auto Industry – CleanTechnica

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In this article, I analyze the competitive landscape of electric vehicles (EVs) in China, focusing on the Xpeng Mona M03 and others’ effect on the global auto market. About 3 years ago, I wrote about cars that seemed to be impressive before, like the Xpeng P5 and the BYD Dolphin. The sales of both have been disappointing to me.  I don’t know the exact reasons for that, but in the brutally competitive Chinese marketplace, it could be competition or it could be the manufacturer just didn’t plan for it to be a volume model based on their factory plans, so they don’t promote it aggressively.

Xpeng Mona M03

Zachary recently published an article on the release of the car and it’s impressive starting price under $17,000! CnEVPost recently reported that they received over 30,000 orders in only 48 hours. So, this XPeng may have caught lightning in a bottle with this one. But the P5 and the Dolphin are also impressively prices, so what do I think is special regarding the Mona? Below are some ideas.

Value for the price is the most important thing for many shoppers. The Mona starting price is RMD 119,800 ($16,880) and the model with advanced driver assistance features is RMB 155,800 ($21,960). That compares to the current price of the Dolphin at RMB 99,800 ($14,070) and the Xpeng P5 at RMP 160,000 ($22,550). My other points will show how the Mona M03 is now offering much of the value of the P5 at a price just a little above the Dolphin. It is also about half the price of the cheapest Tesla Model 3 in China, which starts at RMB 231,900 ($32,680).

Physical size and utility is just right. It’s length/width/height (in mm) of 4780/1896/1445 is almost identical to the Tesla Model 3’s and the Xpeng P5’s, and substantially larger than the BYD Dolphin’s (490 mm or 19 inches longer). The hatchback is just like what the Tesla Model S offers, and it’s what I wish Tesla would have done with the Model 3 so that you can get bikes and other large things into the hatch. The volume of 621 liters is much higher than the Model 3’s 425 liters, the Xpeng P5’s 450 liters, or the BYD Dolphin’s 345 liters. Although, of course, it’s less than the Tesla Model Y’s 854 liters. You can see that the Mona M03 is competitive in size and utility with more expensive models.

Range and charging speed are always primary considerations. The Mona M03 has either a 51.8 or 62.2 kWh battery with a CLTC range of 515 or 620 km, respectively. They claim charging from 30% to 80% in as little as 26 minutes. This is more than the more expensive P5 (500 km and 30 minutes for the 30% to 80% charge). The BYD Dolphin has recently increased its range to 420 km for the entry level to 520 km for the most expensive model costing RMB 129,800 ($18,290). The reported time to go from 30% to 80% is 29 minutes. The Tesla Model 3 entry level model has a range of 606 km and typically takes 20 to 25 minutes to charge 30% to 80%. So, you can see the Mona M03 is competitive in range and charging with more expensive models. One reason for this is the Mona’s extremely low coefficient of drag of 0.194, which is the lowest in the world for a production car!

It also comes with standard lane centering and adaptive cruise (similar to Tesla Autopilot) and even assisted parking in the entry model. The top of the line model has the company’s XPILOT system, with an AI driving experience similar to Tesla Supervised FSD. The BYD Dolphin & the Xpeng P5 features are also similar to Tesla Autopilot plus parking assist. The P5 had more advanced features previously, but in a recent redesign, removed the LiDAR sensors. The Mona M03 has 7 cameras, 12 ultrasonic sensors, and 2 radars to understand its environment.

Attractive and distinctive design are subjective, but that is how I would describe the images above.

Other Models & Trends In China

But this article isn’t just about the Xpeng Mona M03. Rather, it’s to show how far the industry has come in the last 3 years. More upscale compact SUVs, the Zeekr X and Volvo EX30, are two more impressive models that are moving the needle. BYD’s newly redesigned Seal is a bit more expensive than the Mona M03, but it shows the company has made a lot of progress also. As I was submitting this article, I noticed the Geely Geome Yingyuan is coming out at RMB 80,000 ($11,000), with the size and power of the BYD Dolphin but RMB 20,000 ($3,000) cheaper! Here is another article with a few more details.

As Zachary noticed a week ago, though, even the Chinese automakers that are doing well with battery electric vehicles (BEV) like Zeekr and Avatr are introducing plug in hybrids. This really can’t be about cost, since you can see that pure EVs are now very affordable in China (and I’m not even mentioning the BYD Seagull that starts at under $10,000). This clearly has to be about either a real charging infrastructure issue or a perceived one. And to buyers, perception is reality. I don’t worry as much as others that plug-in hybrids (PHEV) will just be used as gas cars for 3 reasons.

1. It seems most PHEVs in China have an all-electric range of more than 100 km that makes them worth plugging in. I’ve owned a Ford C-Max Energi with 13 miles of electric range that was barely worth plugging in. It’s not the same.
2. I’ve written about PHEVs as the gateway drug for EVs. I’ve know several people who bought PHEVs (Chevy Volts in the US) who just weren’t comfortable making that big of a step all at once. Once they own a PHEV and find they rarely need to go to the gas station and how much they enjoy that, they buy an EV as their next car. Yes, it is a slower transition than if everyone was an early adopter like me, but not everyone has that tolerance for risk.
3. China has substantially stronger government and less personal freedom than many other countries, with all the advantages and disadvantages that come with that. I have no doubt when the central government thinks it is a good time, they can switch the people buying PHEVs to buying BEVs with some incentives, and by raising gas prices and lowering electricity prices, they can encourage the people that already own PHEVs to use them as BEVs most of the time. They must not think the charging infrastructure is ready to do that now. I don’t know if it is or not. It does seem like a good compromise selling PHEVs to those afraid to buy BEVs, and then, as the infrastructure improves, you can motivate those people to use almost no gas.

Effect On The Rest Of The World

As we have been saying for a while, this innovation is going to affect everyone. I wrote about how it would affect the Chinese and US markets a few weeks ago.

• The legacy automakers in China (VW, Toyota, Honda, Nissan, GM, Ford, Stellantis, BMW, Mercedes, Audi, and even Hyundai & Kia) are just going to be crushed in China. The domestic products are just too good for them to compete. Tesla had better accelerate its development or it faces serious trouble too. Tesla has a little more runway than the rest, but you saw how the Xpeng offered most of what you can get with the newly designed Tesla Model 3 at about half the price. For the legacy automakers, their market was people not ready to buy a BEV. Now that BYD (and others) offer PHEVs at the same prices as the legacy gas cars but you get some of the NEV incentives with none of the risks of going to a BEV, there really isn’t any reason to buy a gas car anymore in China (unless you like the sound of the motor or are just a BMW fan or for some other sentimental reason).
• This same dynamic spreads to significant markets like Mexico, Malaysia, Indonesia, Australia, Russia, South Korea, UK, and Japan which have low or no tariffs on Chinese vehicles. These automakers will export PHEVs to the markets with poor charging infrastructure and BEVs to the areas with sufficient chargers (or as second cars to people wealthy enough to own two vehicles). Brazil and Saudi Arabia have low tariffs on Chinese vehicles, so those markets have some potential also.
• Europe has imposed tariffs that in combination with the shipping costs will be sufficient to insulate the market for a while.  But BYD and others will be welcome to build the vehicles in Europe and then they won’t have significant shipping costs or tariffs to deal with.
• The US and Canada have recently imposed tariffs of 100% or more, and this will significantly insulate the market from competition. The Chinese can build plants in Mexico to get around this, but it is likely politicians will find a way to block them to protect their domestic automakers if consumers don’t realize what they are missing.

Disclosure: I am a shareholder in Tesla [TSLA], BYD [BYDDY], Nio [NIO], XPeng [XPEV], NextEra Energy [NEP], and several ARK ETFs. But I offer no investment advice of any sort here.