Source | Bohu Finance (bohuFN)

While leaders of new force automakers are still vying for headlines with 'golden quotes', Leapmotor's founder Zhu Jiangming reluctantly made it to the trending topics due to a 'death rumor'. Later, Zhu Jiangming simply responded calmly with, 'Both I and Leapmotor are doing quite well.'

For a long time, Zhu Jiangming has been a low-key member of the new force automaker circle. He rarely activates on social media and seldom 'paints big pictures', which is not common in the exceptionally noisy automaker circle, but this does not hinder Leapmotor from 'making money quietly'.

Recently, Leapmotor delivered a financial report with 'new highs'. According to the report, Leapmotor achieved revenue of 10.02 billion yuan in the first quarter of 2025, a year-on-year increase of 187.1%; net loss was 130 million yuan, significantly narrowed from the same period last year, and the gross profit margin hit a record high of 14.9%.

If you are someone who follows or even understands new energy vehicles, you won't be surprised by Leapmotor's performance. Over the past year, under the moniker of 'half-price Li Auto', Leapmotor quietly reached the first tier of sales rankings among new force automakers. A few years ago, when Leapmotor shouted about self-development across the board, there were still many skeptical voices in the industry. But then Leapmotor turned around and reached a cooperation with Stellantis Group to go overseas, becoming the second new force automaker to cooperate with an overseas giant.

However, although Leapmotor is 'just one step away' from comprehensive profitability, this step is also the most difficult one. After all, from 'no one be bullish ' to 'successful counterattack', Leapmotor inevitably bears the 'shadow' of other automakers, and the title of 'price butcher' is also lingering.

Unconsciously, these 'labels' have become a 'burden' for Leapmotor. Only by tearing off the labels, changing perceptions, and reshaping its foundation can Leapmotor truly 'take the lead' and achieve a comprehensive leap.

01 An airtight product matrix

In 2024, Leapmotor overachieved its annual sales target with a completion rate of 117.48%, delivering 293,724 vehicles, doubling year-on-year and ranking third among new force automakers.

Entering 2025, Leapmotor's sales continued to surge. From January to April this year, Leapmotor's cumulative sales were 128,591 vehicles, ranking second in the sales list of new force automakers, second only to XPeng, and completely changing the once 'NIO-XPeng-Li Auto' market structure.

But Leapmotor was actually not favored by the outside world at the beginning. As the founder, Zhu Jiangming is neither professionally trained nor has a background in the traditional automotive industry, which made Leapmotor face many doubts and challenges in the initial stage.

In 2019, Leapmotor launched its first model S01, benchmarking Tesla's Model S, with a starting price of only 119,900 yuan. It seemed to offer excellent value for money, but it suffered a heavy blow from the market, with an average annual sales volume of less than 1,000 vehicles.

However, Leapmotor has years of self-development experience in core technologies such as the three-electric system, intelligent connected system, and autonomous driving system. The S01 also has no obvious shortcomings in terms of endurance and intelligent driving. Its failure is more related to Leapmotor's marketing strategy and market positioning.

First, unlike other new force automakers, Leapmotor did not have much brand exposure, resulting in low discussion of the S01. Second, as Leapmotor's first model, consumers were concerned about issues such as brand strength and after-sales service, but at that time Leapmotor did not have many showrooms to alleviate consumers' concerns.

Since then, Leapmotor fell into a two-year dark period, with dismal sales and repeated setbacks in financing, and its capital chain was even on the verge of rupture.

Ultimately, Leapmotor decided to use 'product power' to solve the pain points of marketing. Since then, a series of Leapmotor products have inevitably borne the 'shadow' of other automakers, but their prices are much lower than those of benchmarking products.

The most well-known to the outside world is Leapmotor's nickname of 'half-price Li Auto'. For example, the Leapmotor C10, which benchmarks the Li Auto L7, has traces of Li Auto in terms of styling, design, and configuration, and also offers an extended-range version, but at a price of about half that of Li Auto.

Leapmotor's B10, launched in April this year, directly overturned the inherent pattern of no 'lidar' high-level intelligent driving for SUVs in the 100,000 yuan price range. While BYD was shouting about 'intelligent driving equality' in front, Leapmotor followed closely behind, and even gave away more.

Regarding being called 'Little Li Auto' and 'Little BYD', Zhu Jiangming also showed a calm attitude, saying that 'I don't think there's anything wrong with it.' He believes that Li Auto has advantages in product design and technological innovation, and that Leapmotor can learn from its successful experience.

From the outside perspective, Leapmotor is 'overtaking' by sticking to its competitors' runways, lacking its own brand attitude. However, for Leapmotor, which has suffered from marketing losses, it is very clear about what it wants and what consumers want.

Admittedly, 'low price' is an important factor attracting consumers to purchase, but in recent years' price wars in the automaker circle, 'price reduction' is no longer a novel tactic. What makes consumers choose Leapmotor among a host of low-priced models, rather than other brands?

Zhu Jiangming has talked about Leapmotor's strategy more than once, which is to 'benchmark Uniqlo.' When we think about shopping at Uniqlo, is it just because it's cheap?

It should be said that 'yes and no.' Compared to white-label clothing, Uniqlo is not the cheapest, but considering factors such as overall cost-effectiveness, shopping experience, and SKU, Uniqlo becomes a more competitive choice.

The same is true for Leapmotor. It has changed the pricing strategy of brand-oriented pricing in the automotive industry to a strategy of cost-based pricing in the ordinary consumer goods industry. If consumers only care about the cost-effectiveness of the vehicle and not the brand, Leapmotor is a good choice.

In addition, Leapmotor has been continuously densifying its product matrix in recent years, covering all price bands from 60,000 to 300,000 yuan through the ABCD series, but it does not only have one model in the same price band, but provides multiple models with different series characteristics.

It can be said that Leapmotor uses the strategy of 'price band + differential characteristics' to further meet the diverse needs of different consumers, allowing consumers to clearly perceive that cars cheaper than Leapmotor are not as good as Leapmotor, and cars better than Leapmotor are not as cheap.

02 Getting out of the dilemma of 'selling more and losing more'

However, for Leapmotor to create 'good but not expensive' cars, cost is an unavoidable issue. Manufacturing also has an 'impossible triangle.' If it is unable to balance low cost, high quality, and high efficiency, it may become a losing business.

In fact, Leapmotor has also experienced the dilemma of 'selling more and losing more.' In 2022, Leapmotor was still 'losing 46,000 yuan per car sold,' and although its revenue and delivery volume hit new highs that year, its net loss exceeded 5.1 billion yuan, an increase of 79.5% over 2021, with a gross profit margin of only -15.4%.

Behind Leapmotor's losses were the continuous increases in R&D expenses and sales costs. Although revenue and delivery volumes increased, the rapid growth in costs led to the expansion of losses. Therefore, 'saving money' has also become Leapmotor's top priority.

First, it is to 'reduce costs' from the supply chain. Leapmotor has always adhered to the self-developed parts model. Zhu Jiangming revealed that the core parts self-developed and manufactured by Leapmotor account for more than 65% of the total vehicle cost.

Against this background, Leapmotor can amplify the 'reuse effect.' Currently, 80% of the parts of Leapmotor's C-series models are Generalization . By sharing core components such as chassis, headlights, and seats, the development of the second vehicle only requires an additional 20%-30% cost.

In addition, in supply chain management, Leapmotor bypasses traditional tier-one suppliers to reduce profit sharing in intermediate links. For some non-self-developed categories, Leapmotor also avoids binding with leading companies. For example, for power batteries, which account for 40%-50% of the cost of automobiles, Leapmotor chooses to cooperate with second-tier manufacturers such as CALB and Hive Energy to further compress costs.

Second, it is to create economies of scale. Leapmotor's self-developed cloverleaf architecture can 'package' originally dispersed hardware and functions into standardized modules, which can quickly adapt to the needs of different models and further dilute marginal costs as the scale expands.

Finally, Leapmotor has always been relatively strict in controlling operating expenses. According to 2023 data, Leapmotor's operating expense ratio was 27.3%, far lower than XPeng (38.58%) and NIO (47.35%). In 2024, Leapmotor's operating expense ratio dropped to 19.22%, but from the first-half data, it is still at a relatively low level in the industry.

Under this combination of measures, Leapmotor not only reduced losses but also achieved quarterly profitability for the first time in the fourth quarter of last year, becoming the second new force automaker to achieve quarterly profitability. In the first quarter of this year, Leapmotor's gross profit margin increased to 14.9% quarter-on-quarter, hitting a record high.

In addition to actively reducing costs, Leapmotor is also trying to increase revenue. One of the reasons why Leapmotor's financial report in the first quarter of this year far exceeded market expectations is a technical service fee of 300 million yuan, with a gross profit margin of 60%-70%.

Although its proportion of revenue is not high, it has opened up the imagination space of the capital market. If Leapmotor's subsequent cooperative technology licensing income can become a continuous income similar to XPeng's cooperation with Volkswagen, it will greatly alleviate Leapmotor's cost pressure.

In addition, according to a research report by Dongwu Securities, Leapmotor's single-vehicle gross profit increased from approximately 555 yuan in 2023 to 9,163 yuan, an increase of 16 times. This is thanks to Leapmotor's increase in the proportion of high-premium products (C-series) last year, which has improved the company's profitability.

Today's Leapmotor has not only emerged from the sales dilemma but also gradually shaken off the curse of new force automakers 'selling one and losing one.' Zhu Jiangming further stated that Leapmotor strives to achieve annual profitability in 2025, with a sales target of 500,000-600,000 vehicles and a full-year gross profit margin of 10%-12%.

03 Hidden worries after the 'leap'

However, behind Zhu Jiangming's confidence, Leapmotor still has hidden worries. If the technical service fee is excluded, the company's gross profit margin in the first quarter actually declined quarter-on-quarter.

Moreover, if we use Leapmotor's gross profit margin of 8.38% in 2024 as a reference, compared with 'production maniacs' such as BYD and Tesla, it basically still belongs to 'losing money to make a noise'; even compared with new force automakers such as NIO and XPeng, it is far from the safety line.

Therefore, today's Leapmotor has only verified the feasibility of 'small profits but quick turnover' in the automotive market, but as the automotive industry transitions from electrification to intelligence, Leapmotor still needs to invest more.

First, Leapmotor's R&D expenses have always been lower than those of its peers. In 2024, Leapmotor's R&D expenses increased by 51% year-on-year to 2.9 billion yuan. For reference, the R&D expenses of 'NIO-XPeng-Li Auto' were 13 billion yuan, 6.5 billion yuan, and 11 billion yuan, respectively, and Leapmotor's R&D expenses have always been 'uniquely' low.

However, the automaker circle has basically entered the competition of intelligent driving nowadays. Leapmotor's supplier for high-level intelligent driving is Momenta's City NOA system, which is the same supplier as BYD and Toyota.

You can imagine, if these two automakers start a price war at the same time in the future, can Leapmotor's ultimate supply chain and capital advantages allow it to win in this competition?

The 'R&D debt' that Leapmotor has owed over the years will eventually have to be repaid. As Zhu Jiangming said, 'No matter how frugal we are, we cannot reduce investment in intelligent driving.' But as a result, Leapmotor will probably have to run faster in the future to reduce the pressure on profitability.

Second, economies of scale may hit the ceiling. Leapmotor's management stated that the year-on-year improvement in gross profit margin in the first quarter was mainly due to economies of scale brought about by increased sales.

However, the raw material cost of a single Leapmotor vehicle accounts for more than 90%, which means that its cost control space is limited, and it is difficult to significantly dilute the cost of each vehicle in the short term.

Therefore, enhancing brand premium and going overseas have become important narratives for Leapmotor in the future.

On the one hand, Leapmotor's brand accumulation is still relatively shallow. It needs to tear off old labels and reshape brand value to better promote sales of high-end product lines.

It is reported that Leapmotor's most premium D-series model will be launched this year. As an important magic weapon to drive Leapmotor's performance to continue rising, whether it can successfully incubate a new label of 'intelligent driving' has become a crucial step in Leapmotor's brand premiumization.

On the other hand, Leapmotor needs to further enhance its international brand influence by expanding overseas markets. Currently, Leapmotor's cooperation with Stellantis is progressing smoothly, which is expected to further narrow the gap between Leapmotor and its competitors in overseas markets.

Zhu Jiangming once said, 'Leapmotor is a long-distance runner. It's hard to say whether we can keep the first place, but we are confident of always being at the top.' Today, the automotive industry has entered the finals, and the competition is not only about speed, but also about endurance and evolution.

Over the past few years, Leapmotor has demonstrated outstanding ability to navigate through cycles, building a unique moat with extreme cost-effectiveness and completing a beautiful 'counterattack.' But after completing the counterattack, Leapmotor's biggest enemy is no longer external competitors, but the breakthrough of its own boundaries.

Next, what Leapmotor needs to prove is not whether it can always be the sales champion, but whether it can stay at the table in a new round of competition and find the leverage to face more powerful opponents.

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