Exclusive | Xpeng Mona Progress: Jiang Wen Serves As General Manager And Introduces BYD Batteries

21st Century Business Herald Wu Xiaoyu reports from Beijing

 

After Weilai launched a new brand "Ledao" to pursue sales, Xiaopeng will also place its hopes on its second brand - MONA for growth.

21st Century Business Herald learned from multiple independent sources that MONA's first car is produced at Xiaopeng's Zhaoqing factory. The trial production car has rolled off the production line and is about to enter the PT2 stage. Battery suppliers include BYD.

 

PT (Production Trial) is the verification stage before mass production of automobiles, generally divided into PT0, PT1 and PT2. Once PT2 is completed, MONA moves into pre-production (PP) and small batch production (SOP).

 

The Xpeng Zhaoqing factory where MONA is located has an annual production capacity of 200,000 vehicles. It is also the production site of Xpeng's popular model P7. At the end of January this year, in order to put new models into production, Xiaopeng invested 100 million yuan to upgrade the vehicle production line of the Zhaoqing factory.

 

In order to lead Ledao, NIO CEO Li Bin introduced senior executives from outside - Ai Tiecheng, who has a Disney background, as president. However, the general manager of Xpeng's sub-brand MONA was selected internally.

 

A reporter from the 21st Century Business Herald learned that the general person in charge of MONA is Jiang Wen, with a rank of P9. He has been with Xiaopeng for many years and has managed projects and been responsible for quality. Before joining Xpeng, Jiang Wen worked at Geely Automobile Research Institute and Baoneng Motors.

 

MONA is the predecessor of Didi's car-making project "Da Vinci". In August last year, Xpeng acquired this car-making project for a total consideration of approximately 5.4 billion yuan. MONA's first car is an A-class compact electric sedan priced between 100,000 and 150,000 yuan. It will be equipped with Xpeng's high-level intelligent driving system and is expected to be released in June and will be launched and delivered in the third quarter.

 

"MONA is currently the team under the greatest pressure within Xiaopeng," an insider close to Xiaopeng commented. In the first four months of this year, Xpeng achieved sales of 31,200 vehicles, an average of less than 10,000 vehicles per month, and only completed 11.1% of the annual sales target of 280,000 vehicles. To achieve its goal, Xpeng must sell more than 30,000 vehicles per month in the remaining eight months. As a mass-market new product this year, the hope and pressure MONA carries are evident.

 

But Xpeng Motors CEO He Xiaopeng has high hopes for MONA. At the Beijing Auto Show in April this year, his expectation for MONA was to "surpass Xiaomi SU7 in the second half of the year." Xiaomi SU7 started delivery on April 3 and aims to deliver 100,000 units this year.

 

Didi's design, Xpeng's smart driving, and a price of 150,000

 

The Da Vinci project carries Didi's ambition to build cars. At the beginning of 2021, Didi secretly launched the "Da Vinci Project" internally, planning to build a pure electric sedan for the passenger car market.

 

In order to build cars, Didi invested a lot of manpower and financial resources. The person in charge of the DaVinci project is Yang Jun, vice president of Didi Chuxing and general manager of Xiaoju Auto Services. At its peak, the number of employees reached 2,000, with the main team members coming from BAIC and Baoneng Motors. According to the transaction announcements of Didi and Xpeng, this project will suffer net losses of 763 million yuan and 2.638 billion yuan in 2021 and 2022 respectively.

 

Xpeng co-president Gu Hongdi commented in an interview with the media at the end of August last year that this smart electric car has a "very high degree of completion" and "is a very attractive asset" for Xpeng.

 

But car-making is a very challenging business, and Didi's car-making journey has been full of twists and turns.

 

Before the Da Vinci project was launched, Didi had "jointly built cars" with BYD. Didi is responsible for product definition, and BYD is responsible for engineering development and implementation. It launched the first customized online ride-hailing D1 in November 2020, and Chairman Cheng Wei personally stood up. According to Cheng Wei's plan, D1 will be iterated to a version every 18 months. By 2025, D1 will be iterated to D3. Shared cars equipped with autonomous driving are expected to be popular on the Didi platform for more than 1 million units.

 

In 2021 and 2022, D1 sales are only 10,100 and 994 units - not even as much as the monthly sales of a popular model. In November 2021, Ideal ONE's monthly sales reached 13,400 units.

 

In its cooperation with BYD, Didi was mostly responsible for the riding experience, including interior and exterior styling, seat prototypes, etc. It did not master the core technology and had less say. In the joint venture between the two parties, BYD and Didi holds 65% and 35% of the shares respectively. In 2021, Didi gave up its cooperation in car manufacturing, launched the Da Vinci project, and started independent car manufacturing.

 

Independent car manufacturing not only has a heavy financial burden, but also takes a long time to achieve profitability. The prospectus shows that Didi's losses will reach 23.8 billion yuan in 2022, and it will take longer to achieve profitability. From establishment to profitability, it took Li Auto 8 years and Tesla more than 10 years. In order to produce smoothly, car companies also need to obtain production qualifications. In March 2022, in order to obtain car manufacturing qualifications, Didi was exposed to plan to acquire new energy vehicle manufacturer Guoji Zhijun, but the plan made no progress in the next year and a half.

 

In the end, Didi's car-making dream was realized by Xpeng Motors. In August last year, Xpeng acquired this car-making project for a total consideration of approximately 5.4 billion yuan.

 

21st Century Business Herald learned that after the Da Vinci team was disbanded, the original person in charge, Yang Jun, had joined CATL as the general manager of Times Electronic Services Company. The remaining more than a hundred members were merged into the Xpeng MONA team. Most of these members were concentrated in Intelligent cockpit, software development and other fields.

The division of labor between the two parties is clear. For MONA's first car, the original Didi team was responsible for the design, part of the R&D and sales. After Xiaopeng took over, he was responsible for research and development, supply chain, production and manufacturing, as well as sales to ordinary consumers.

 

"Based on the price of more than RMB 100,000, MONA's most important factors are design, battery life, and smart driving." said an insider close to Xpeng.

 

The design is mainly done by the original Didi team, and the Xpeng team will also make some minor modifications. Judging from the spy photos, the car has a streamlined appearance and is equipped with integrated front and rear light groups.

 

In terms of battery life, people familiar with the matter said that the battery supplier of MONA's first car includes BYD, and the battery life is more than 500 kilometers. This is equivalent to the 580-kilometer range of the G6 entry-level model, which starts at 179,900 yuan.

MONA will also be a key step for Xpeng to promote high-end autonomous driving to cheaper vehicles. According to He Xiaopeng's interview with the media in August last year, Xiaopeng will transform MONA with the Fuyao architecture including XNGP (all-scenario intelligent assisted driving) and X-EEA3.0 electronic and electrical architecture.

 

Misplaced competition with Xiaomi and Thalys, MONA beats BYD with smart driving

 

The 200,000-300,000 yuan market is the best market in He Xiaopeng's mind. It has a certain premium capability and is large enough.

Xpeng has deployed three of its products here, namely the P7i, which is positioned as a mid-sized pure electric coupe, the G6, which is positioned as a mid-sized SUV, and the G9, which is positioned as a large five-seat SUV.

 

But now, the 200,000-class new energy market is also the most competitive battlefield. Since the beginning of this year, new products such as Xiaomi SU7, Cyrus M5, Ideal L6, and Xinji Krypton 001 have been launched, competing head-on with Xpeng's products. They each have their own strengths. Xiaomi excels in brand and traffic. The advantage of Xinji Krypton 001 lies in its performance. Its top version can accelerate from 0 to 100 mph in just 3.3 seconds. Wenjiexin M5 Intelligent Driving Edition is labeled with intelligence. It is the first model to be equipped with both the HUAWEI ADS 2.0 advanced intelligent driving system and Hongmeng Intelligent Cockpit 3.0.

 

Xpeng is good at smart driving, but several of its main-selling products are old cars that have been on the market for many years. They have gone through the hot sales cycle, and it is difficult to stand out when competing with new products.

 

The Xpeng P7 has been on sale for four years and is "an old car among new energy vehicles," said a Xpeng dealer. The monthly sales of P7 exceeded 9,000 units in 2021. Sales of the facelifted P7i were around 5,000 units after its launch in March last year. However, in April this year, sales dropped to 2,383 units. The G6 has also experienced a short hot sales cycle. Sales in the fourth quarter of last year once exceeded 8,000 units, but sales in the first quarter of this year dropped to more than 1,000 units. And the G9 is 1.5 years after it first hit the market.

Xpeng's first new product launched this year is the X9. The starting price when it was officially launched was 359,800 yuan. It is the product with the highest gross profit margin in the product portfolio and has limited effect on increasing sales. In the first four months of this year, Xpeng's sales were 31,200 vehicles, which was lower than NIO's 45,600 vehicles and Ideal's 106,100 vehicles.

 

MONA is Xpeng's second new product this year. This low-priced smart car will shoulder the important task of Xpeng's sales.

 

BYD is MONA's unavoidable rival. According to Che Di, in April this year, BYD Qin PLUS DM-i and Yuan PLUS sold 27,800 units and 23,300 units respectively, ranking among the top 120,000-180,000 yuan new energy products. Top two. However, compared with BYD, Xpeng has obvious advantages in intelligence. Its XNGP system is the first mass-produced full-scenario assisted driving system in China.

 

In an interview with the media in August last year, He Xiaopeng said that MONA's competitiveness would far exceed that of products on the market, and he conservatively expected sales to be more than 100,000 units a year.

 

Several dealers close to Xpeng said that Xpeng has become more pragmatic in channel construction for MONA. "In the early stage, we will open 'stores within stores' in qualified Xpeng comprehensive stores, and then open separate stores for the MONA brand. "

In addition to ordinary consumers (C-side), MONA will also be sold to operational vehicle demand parties (B-side) such as online hailing fleets.

Didi is Xiaopeng's right-hand man in selling cars. In August last year, Xpeng and Didi reached an annual sales betting agreement with a lower limit of 100,000 units and an upper limit of 180,000 units for two consecutive years: Summarizing these two years, when sales exceed 100,000 units in the same year, Didi will begin to receive The additional shares issued by Xpeng can obtain the maximum number of additional shares when the sales volume reaches 180,000 units. In the first stage, Xpeng needs to issue up to about 14.0546 million shares to Didi, and in the second stage it is 14.2765 million shares.

 

In order to pursue sales growth, NIO and Xpeng have jointly launched sub-brands and lower-priced models. But in the long run, running the two brands well requires more precise product definition, avoiding internal competition, and being supported by healthy cash flow. Behind the pursuit of sales, the new test left for Weilai and Xiaopeng has just begun.

 

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