TLDRs;

Xpeng plans 2026 European launch of budget-friendly Mona EV brand amid rising global competition and protectionist trade policies.
Mona M03 coupe, priced around $17,000 in China, demonstrates cost advantage but faces challenges in higher-priced global markets.
EU tariffs of up to 35.3% on China-made EVs could push Xpeng to establish European manufacturing facilities.
Chinese EV makers like Xpeng outpace European automakers, expanding globally with scale advantages and aggressive growth strategies.

Chinese electric vehicle (EV) manufacturer Xpeng has revealed bold plans to take its budget-friendly Mona brand to Europe by 2026, aiming to capture a share of the highly competitive global mass-market EV sector.

CEO He Xiaopeng confirmed the move in an interview with CNBC, describing it as part of the company’s accelerated global expansion strategy.

Mona M03 leads the charge

The Mona brand debuted in China in 2024 with the launch of the Mona M03 coupe, positioned at a more affordable price point than Xpeng’s premium models.

“In 2026 you can expect a variety of Mona products launched into the Chinese and European markets, as well as in rest of the world,” Xiaopeng said.  “I believe by then, what we launch will be very proven and very excellent vehicles.”

In China, the M03 starts at approximately $17,000, reflecting the country’s fiercely competitive EV landscape, where prices often undercut comparable gasoline-powered vehicles. This cost advantage gives Xpeng a strong foundation, but analysts note the same level of pricing flexibility may not easily translate to Europe and other regions.

While European consumers have been gradually adopting EVs, average transaction prices remain significantly higher. For instance, in the United States, new EVs average over $57,000, far above China’s low-cost market environment. This gap underscores the challenges Xpeng will face in balancing affordability with profitability when it enters Europe.

Global expansion faces hurdles

Since beginning its international journey in 2020, Xpeng has expanded into more than 60 countries and regions, significantly outpacing rivals. This rapid growth reflects the determination of Chinese automakers to establish a strong global presence despite headwinds such as rising protectionism.

One major obstacle is the European Union’s tariffs on Chinese-made EVs, which currently range from 7.8% to 35.3%. These tariffs, designed to protect domestic automakers from perceived unfair competition, could eat into Xpeng’s cost advantage. He Xiaopeng has acknowledged these risks, noting that the company is considering setting up manufacturing plants in Europe to offset tariff pressure. However, no timeline has been set for such facilities.

The CEO also signaled openness to acquisitions, suggesting Xpeng could buy existing EV firms abroad to bolster local capabilities. This would build on the company’s earlier acquisition of Didi’s EV development arm in 2023, which strengthened its R&D base.

Competing with global giants

Xpeng’s expansion highlights a larger trend, Chinese EV makers are no longer content with dominating the domestic market. Instead, they are moving aggressively into international territories once thought to be the stronghold of brands like BMW, Mercedes-Benz, and Audi.

China already accounts for nearly two-thirds of projected global EV sales in 2025, giving its manufacturers unparalleled economies of scale. By leveraging low-cost production, domestic supply chains, and partnerships with battery makers such as CATL, companies like Xpeng can challenge global incumbents head-on.

Still, long-term success abroad will depend on more than cost competitiveness. Consumer trust, safety standards, charging infrastructure, and brand perception will all play pivotal roles. Xpeng’s Mona brand, aimed at affordability, could resonate with budget-conscious European buyers, but only if the company successfully navigates regulatory frameworks and trade dynamics.