Xpeng Inc (NYSE:XPEV), one of Tesla's Chinese electric vehicle rivals, has launched a new model priced below an equivalent of $17,000 and a higher-end version priced just below $22,000 that boasts self-driving features.
Shares in the Hong Kong- and New York-listed company rose 6% on its announcements overnight, where the new affordable Mona M03 model was launched in a strategic move to penetrate the highly competitive mainstream segment of China’s automotive market.
The entry-level M03 aims to capture a slice of the market dominated by domestic leader BYD Co (HKG:1211, LSE:0HKY, OTCQX:BYDDY) and international rivals such, where it is half the price of Tesla's Model 3.
It marks a significant shift for Xpeng's traditional market positioning as a premium EV brand.
The higher-end M03 Max, priced from $21,866, boasts a Tesla-like self-driving system that CEO He Xiaopeng described as “the only car with advanced autonomous driving at less than 200,000 yuan ($28,068).”
Xpeng was reported to have received over 10,000 orders placed within an hour of its launch, showing shown strong initial demand.
However, such aggressive pricing is likely to come at the expense of profit margins, as the company battles to achieve economies of scale in a fiercely competitive market, with management having previously set an annual sales target of at least 100,000 Mona vehicles.