Two electric vehicle models, designed for middle-income consumers in China, are emerging as Tesla’s strongest competitors, with more budget-friendly prices attracting cost-conscious buyers. Geely Auto’s Galaxy and Xpeng’s Mona 03, both priced around 150,000 yuan (US$20,580), are disrupting the hierarchy in China’s competitive EV market.
Young professionals and middle-income buyers are drawn to smart features such as autonomous driving systems and voice-activated controls but tend to choose lower-cost models due to economic uncertainty and job security concerns. These vehicles offer an attractive combination of advanced technology and affordability, making them strong alternatives to premium options.
The Mona 03, a midsize electric sedan priced between 119,800 yuan and 159,800 yuan, debuted in the Chinese market in August and saw more than 15,000 units delivered in January. With a driving range of at least 515km and a competitive suite of smart features, it is viewed as a viable alternative to Tesla’s locally made Model 3, which has a starting price of 227,500 yuan. The Mona 03’s significantly lower cost makes it appealing to consumers seeking a high-performance vehicle without the premium price tag.
Geely’s Galaxy brand is also gaining momentum, selling 93,545 units in January—a 130% increase from the previous year. Positioned as a mass-market option, the Galaxy lineup includes sedans and SUVs priced around 150,000 yuan, drawing buyers away from Tesla’s Model 3 and Model Y. Analysts predict that the rising demand for Galaxy models will drive Geely Auto’s stock price higher, with shares already surging 8% to HK$17.72.
Tesla, in response, has introduced incentives to maintain its market position. Mainland buyers of the Model 3 can now receive an 8,000 yuan subsidy for vehicle insurance, along with a five-year, interest-free loan that translates to a 20,000 yuan saving. However, no such incentives have been announced for the Model Y, which remains priced at 263,500 yuan.
China’s automotive sector is the largest in the world, with EVs and plug-in hybrids making up 60% of global sales. The country’s EV penetration rate exceeded 50% in July, reinforcing its dominance in the industry. BYD leads the mass market, while Tesla continues to be the top choice for premium models. However, with fierce competition and ongoing price reductions across the industry, Geely and Xpeng’s rising influence may reshape the landscape for electric vehicles in China.
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