Xpeng, often called the "Chinese Tesla," has made a bold move by fitting a high-performance artificial intelligence (AI) chip into a sport utility vehicle (SUV) priced in the 30 million won range. With the domestic electric vehicle market slowing sharply, the strategy is seen as an effort to capture the market with a model that combines both value for money and technological prowess. The company is also accelerating its push into overseas markets such as Europe by releasing an extended-range electric vehicle (EREV) version alongside it.
Xpeng unveiled its new SUV, the "MONA L03," on Wednesday at Langyuan Station in Beijing's Chaoyang district. It is the second model in the MONA series, following the "M03" sedan, which became Xpeng's best-seller after its August 2024 launch. The L03 is divided into a base version (Max) and a premium version (Ultra), and supports two types: a pure electric vehicle (EV) and an EREV. An EREV is a car powered by a battery and electric motor, but which also carries a small internal combustion engine dedicated solely to charging the battery.
The L03, with a pre-sale price of 143,800 yuan to 165,800 yuan (approximately 32.63 million won to 37.63 million won), takes direct aim at the younger generation. In fact, promotional slogans reading "the young generation's first smart car" were posted throughout the venue that day, while young men and women who appeared to be "wanghong" (Chinese internet influencers) were seen striking poses in front of the vehicles. Youth celebrities including Taiwanese star cellist Nana Ouyang and Paris Olympics swimming silver medalist Tang Qianting took the stage alongside founder He Xiaopeng, who led the presentation that day, to share their test-drive experiences.
What stands out is that the car, priced low in consideration of young people's wallets, is still equipped with a high-performance AI chip. The base model carries one self-developed "Turing" AI chip with performance of 750 TOPS (one trillion operations per second), while the premium model carries two, giving it up to 1,500 TOPS of autonomous driving computing performance. This is on par with Nvidia's mass-production vehicle chip "Thor" (700 TOPS), released in 2024. Xpeng claimed it can provide a far superior autonomous driving experience even among the Level 2 (L2) capabilities now common in Chinese mass-produced passenger cars. The company also touted the smart voice assistant "Xiao P," a "roaming" driving mode in which the car navigates city alleys on its own without a set destination, and fast charging that takes 19.1 minutes to go from 10% to 80% battery, faster than the Tesla Model Y (25 minutes).
Founder He Xiaopeng, who took the stage that day, expressed confidence, saying, "A friend told me that after riding in an Xpeng car once, the assisted driving of other cars he had previously thought were fine now felt like tractors, and that he even got the impression the car's driving skill was better than his personal chauffeur's."
Xpeng's strategy is a bold bet to break through the domestic slump by simultaneously emphasizing value for money and technological capability. According to the China Association of Automobile Manufacturers, auto retail sales in China fell 19% year-on-year from January to May this year. The EV penetration rate has also risen to around 60%, making it difficult to differentiate through price discounts and electrification alone. While the L03 is not exactly cheap compared with same-class models such as BYD's Yuan Plus (in the 110,000-130,000 yuan range, known in Korea as the Atto 3 Plus), it is judged to have overwhelming price competitiveness among models equipped with 1,500 TOPS-class AI chips. Previously, Geely's "Zeekr 8X," priced in the 350,000 yuan range, was classified as the cheapest among models with similar performance.
The secret behind the striking price is cost control through in-house chip development. In fact, William Li, chairman of Nio, one of China's three major EV startups, stressed the need for developing proprietary AI chips, saying, "Nio spent several billion yuan on purchasing Nvidia chips alone in 2024. One self-developed chip can replace four Nvidia chips, lowering costs." Xpeng chose camera-based pure vision autonomous driving instead of expensive LiDAR. The LiDAR approach uses LiDAR, radar, cameras, and ultrasonic sensors simultaneously, integrating data from the different sensors. In contrast, using AI to infer distance, speed, and object type from camera footage alone can save costs.
Xpeng plans to accelerate its overseas market push by launching the L03 in 64 countries and regions. In particular, on the 16th of this month, it will hold a launch event in Munich, Germany, taking direct aim at the European market. Chinese companies are pushing hybrid models such as plug-in hybrids (PHEV) and EREVs to avoid the European Union's (EU) additional tariffs. This is because the EU's additional tariffs on Chinese-made electric vehicles apply only to pure battery electric vehicles (BEV), while hybrid vehicles equipped with an engine, such as PHEVs and EREVs, are excluded.
Chinese automakers are rapidly expanding their share of the European market by leading with value for money, with Chery's Jaecoo 7, dubbed the "Temu Range Rover," taking the No. 1 spot in UK sales last March. Chinese cars' share of the European market is expected to grow from around 6% last year to 17% by 2031, and this year's sales are forecast to reach 2.3 million units, a 25% increase.
Attention is also focused on whether Xpeng, which has signaled its entry into the Korean market, will put the L03 forward as its first flagship model. BYD's "Atto 3" and "Sealion 7," which are popular in Korea, are also classified as "value-for-money SUVs," just like the L03.
