The Mona project will be aimed at both corporate and general consumers, but it's uncertain whether Xpeng will create an entirely new channel for the project, according to local media.

(Image credit: CnEVPost)

Xpeng (NYSE: XPEV) announced earlier today that it will be acquiring the electric vehicle (EV) business of Chinese ride-hailing giant Didi Global, and will launch a new brand codenamed Mona. Now, new reports provide more details.

Project Mona will launch two new models by the end of 2024, priced at around RMB 150,000 (20,630), with the technology base coming from Didi's car-making program, local media outlet Yicai said in a report today, citing a person familiar with the matter.

Xpeng said earlier today that the first model of the Mona project will be an A-class smart electric model to be launched in 2024, and that the new model and branding will be differentiated from Xpeng-branded products and the main brand.

Didi will provide support from its mobility ecosystem for the "Mona" project with access to its nationwide shared mobility market, paving the way for Xpeng to build a mass-market smart EV model in the RMB 150,000 price range, Xpeng said.

In March 2022, local media reported that Didi would announce plans to build cars, codenamed "Da Vinci" for its EV project, with a team of around 1,700 people based in Beijing's Shunyi district.

Didi's first model is likely to be a mass-market A-class EV, similar in size to the BYD Qin and GAC Aion S, and priced at around RMB 150,000, according to a report at the time.

In addition to the technical assets of the Da Vinci project, some of the R&D staff and equipment from Didi's EV business will also be taken over by Xpeng, according to the report from Yicai today.

Xpeng will add software capabilities such as XNGP and smart cockpit on top of the Da Vinci project, the report said, adding that the Mona project's models will be built at Xpeng's own production facilities.

In addition to transferring the technology platform to Xpeng, Didi will also be responsible for selling some of the Mona project's products through its own channels, Yicai said, citing people familiar with the matter.

The Mona project will be aimed at both corporate and general consumers, but it is uncertain whether Xpeng will create a whole new channel for the project, the person said.

Separately, according to a report by another local media outlet, Huxiu, Xpeng's acquisition of Didi's EV business means that the latter's car-making business code-named "Da Vinci" has been abandoned.

Didi's "Da Vinci" project will see its branding, marketing and after-sales departments abandoned, with the exception of the engineering and product departments, which will keep a few employees, the report said, citing a person familiar with the matter.

Didi's drop of its ambitions to build cars is not entirely due to car-making qualification issues; Didi chairman and CEO Cheng Wei is very uncertain about building cars, and conveys a lack of confidence to his staff, the source said.

Cheng believes that the input-output ratio of building cars is not high, and in the end, he chose to sell the business, the person said.

Meanwhile, Xpeng's chairman and CEO He Xiaopeng is very optimistic about the prospects of the mobility market. Xpeng will be responsible for the project's research and development, mass production, while Didi will support the operation from the ecological aspect, Huxiu said.

Didi will provide support from its mobility ecosystem for the "Mona" project with access to its nationwide shared mobility market, paving the way for Xpeng to build a mass-market smart EV model in the RMB 150,000 price range, according to a statement from Xpeng earlier today.

Xpeng's agreement with Didi will establish performance incentives based on the mass production of the Mona and Didi's achievement of sales targets, with Didi entitled to receive share-based incentives.

Under the performance incentive program, Xpeng has set two performance target period milestones, each with a maximum number of 180,000 eligible new vehicle deliveries.

Xpeng will be the first automotive manufacturer to be fully supported by Didi's ecosystem. The two companies will explore strategic cooperation in a number of areas, including marketing, financial and insurance services, charging, Robotaxi, and international market expansion.

($1 = RMB 7.2725)

BREAKING: Xpeng to acquire Didi's EV business, plans to launch new brand codenamed 'Mona' in 2024