Last week, reports indicated that Tesla was working on a smaller, more affordable model again. Even though it is reportedly in the initial stages of development, people got excited at the prospect of a more affordable Tesla. The share price was up for the week. Also last week, China’s Ministry of Industry and Information Technology (MIIT) released regulatory filings for XPENG’s new MONA L03 compact SUV/crossover. This is the second vehicle in XPENG’s affordable MONA line, following the M03 sedan. Looking at the images, the resemblance to a Model Y is noticeable. If you changed the badges, you could probably convince people that this is the next generation, low cost, compact Tesla. I have a feeling that, if it did appear with different badges, some Tesla fans would be out of breath running to the bank to dump the rest of their life savings into the stock. Image Credit: MIIT As noticed by 电车网界 (Electric Vehicle Network) on Xiaohongshu, the new MONA L03 is within an inch or two in most dimensions of the Model Y, except for being 125 mm (~5 in) shorter in length. According to the regulatory filing, it will come with a 183 kW (245 hp) motor, which should provide solid performance for its size and positioning. Overall, it seems similar to what many have speculated a smaller Tesla SUV would be. Having seen a camouflaged prototype, it did not remind me too much of a Tesla when it drove by, and the final vehicle might not share as much of a resemblance in real life. But the similarities are hard to ignore. Considering that XPENG is delivering what Tesla keeps talking about regarding smaller cars, it made me think about what else XPENG is delivering. Overall, XPENG has been one of the closest Tesla competitors. Its G6 is often considered to be a top Model Y competitor. But the competition doesn’t stop there. Both have vision-based ADAS systems relying heavily on processor power, but XPENG also incorporates radar. I had a sample of the XNGP system in November. Considering the way Tesla FSD deals with Costco parking lots compared to how XPENG deals with chaotic, ebike-filled Chinese city streets, I would say XPENG is already ahead in urban self-driving. The system seems to have progressed since then, and I should have a better idea of the capability soon. Powering XPENG’s VLA 2.0 intelligent driving system is their in-house developed Turing AI chip, which is more advanced than the HW4 chip. Tesla is now talking about developing a new AI chip for HW5, but we will have to wait to see how that situation evolves. XPeng CEO He Xiaopeng presents the three core businesses. Photo from XPeng. Both have Robotaxi operations. XPENG has shown an MPV-based model, whereas Tesla has a two-seater. Tesla has a head start in setting up initial service in the US. However, XPENG seems to move much faster, and I expect their service to start in China soon. Image credit: XPENG XPENG’s IRON humanoid robot seems almost too good. In person, it is so lifelike that it becomes hard to believe that there is not a human inside of the suit until you pull the skin back. In comparison, Optimus has come a long way but still seems like a robot. Both Tesla and XPENG have discussed flying cars. XPENG’s ARIDGE division has them in the air, with a factory built, along with a 6-wheeled, off-road capable “Land Aircraft Carrier.” They are awaiting final approvals to start deliveries. Image credit: XPENG XPENG also seems to be a much better partner than Tesla. While we saw relatively little from Tesla’s partnership with Toyota, XPENG and Volkswagen are launching a number of vehicles several years after entering a partnership agreement. In terms of charismatic leaders, while many put their hopes and dreams into Elon, He Xiaopeng has proven to be a far more honest, mentally stable, and fundamentally likeable CEO. And far less politically divisive. Both companies are positioning themselves as more than a car manufacturer, with XPENG recently renaming the company XPENG Group to reflect the technology focus. Neither is now focused on trying to beat BYD in sheer manufacturing volume. Image Credit: XPENG Of course, there are differences. XPENG is more of a full-line automaker, including new models, like the GX. XPENG’s current volume is smaller, but growing. Tesla offers solar and storage. Tesla is currently in more markets, but XPENG is expanding its footprint rapidly. XPENG started later but is growing. While Tesla currently has more sales and margin, its elevated share price is also based on anticipated growth. Neither company can be justified on a trailing P/E basis, but XPENG is currently on a better trajectory. Overall, some have accused XPENG of copying Tesla. In some ways, XPENG has stayed truer to the environmental goals that attracted so many to Tesla to begin with. Many fell in love with the idea and promise of Tesla, but the company has struggled to live up to that promise. In terms of execution and achievement of stated goals, XPENG is pulling ahead. And they are introducing their own ideas and setting their own goals. What many once considered to be a follower seems to be quickly becoming a leader. We should have a clearer idea about where XPENG is heading soon, with product launches and test drives surrounding the Beijing Auto Show. With Elon’s love of 420, I also expect Tesla to make some announcements. What do you think? Is XPENG building a better “Tesla” than Tesla itself?
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