BEIJING, Aug 27 (Reuters) - Chinese electric vehicle

maker Xpeng ( XPEV ) priced the first model of its budget

sub-brand MONA from $16,813 on Tuesday, wedging into the

mainstream but highly competitive segment of the world's largest

auto market.

The MONA M03 electric hatchback coupe is Xpeng's ( XPEV ) most

affordable model and will compete with other EVs priced in the

100,000-150,000 yuan ($14,035-$21,052) range, which accounts for

a third of total car sales in China.

There will be two versions of the MONA M03: an entry-level

one without advanced autonomous driving technology available

from $16,813, and the M03 Max that uses Tesla-like technology

and is priced from $21,866. Both are cheaper than the lowest

priced Xpeng ( XPEV )-branded EV, the P5 sedan, which is priced from

$22,000.

Deliveries of the M03 Max, "the only car with advanced

autonomous driving at less than 200,000 yuan ($28,068)", will

start early next year, said He Xiaopeng, co-founder and CEO of

XPeng Motors. He was speaking at a launch gala in Beijing that

also celebrated the Guangzhou-based carmaker's 10th anniversary.

Xpeng ( XPEV ) developed the Mona brand after it acquired the EV

development unit from Didi Global, the Chinese ride-hailing

company that has pulled back significantly from the

ultra-competitive electric vehicle market.

With Mona, loss-making Xpeng ( XPEV ) expects to achieve a better

economy of scale to break even. The company said previously that

it expected annual sales of at least 100,000 MONA cars.

Xpeng's ( XPEV ) gross profit margin has improved this year thanks to

a 20% increase in the number of EVs sold in the first seven

months from a year earlier and a revenue boost from offering

technology services to Volkswagen.

Xpeng's ( XPEV ) Chinese rival Nio also launched a

lower-priced brand, Onvo, in April.

The Onvo L60, which will start selling in September, is

expected to take on Tesla's best-selling Model Y in

China.

Both Onvo and Mona EVs do not use lidar sensors in their

advanced autonomous driving technologies, a strategy similar to

Tesla's camera-only Full-Self Driving that lowers hardware costs

for EVs.

A lidar sensor costs several thousand yuan although the

price has fallen sharply in the past two years as Chinese lidar

makers such as Hesai Technology have increased production.

Xpeng ( XPEV ) launched the P5, the world's first mass-produced car

with optionally equipped lidar sensors, in 2021. However, last

September it removed the lidar sensor from the P5 to reduce the

lowest price to $22,000 and target price-sensitive consumers.

Xpeng ( XPEV ) cars that have lidar sensors retail from $31,450

currently.

($1 = 7.1256 Chinese yuan renminbi)