XPeng Mona M03 is a cut-price Tesla Model 3 fighter

XPeng has revealed the first vehicle from its new Mona sub-brand, the Mona M03, which is set to go into battle with EV sedans like the Tesla Model 3 and BYD Seal.

Mona stands for ‘Made of AI’ and is a joint-venture between XPeng and Chinese ride-hailing giant Didi.

Didi is understood to have taken responsibility for the car’s design and some of its R&D, while XPeng has handled the majority of the M03’s development and is in charge of its supply chain and manufacturing.

The Mona M03 will be positioned below the XPeng P5 that’s in line to be sold in Australia as part of the Chinese car-maker’s first wave here, which gets underway in August with the 2024 XPeng G6 mid-size SUV.

Beneath the skin, the M03 is understood to be closely related to the P5, sitting on the same Fuyao architecture and bagging some of XPeng’s latest semi-autonomous driver aids.

Using a BYD-sourced LFP battery pack, even the cheapest versions of the Mona M03 will come with a range of around 500km.

Mona M03 pricing is tipped to start below CNY200,000 ($A41,300), but other models in the pipeline are expected to open at just CNY100,000 ($A20,600).

Full details will be released ahead of sales commencing in China during the third quarter of this year.

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