LEAPMOTOR matures

Author | Chai Xuchen

Editor | Zhou Zhiyu

Perhaps many people never expected that the once "second-tier new force" player Leapmotor has now turned around and taken center stage, but has it firmly secured its position?

On the evening of November 17, Leapmotor reported its performance for the first three quarters, which greatly exceeded expectations: achieving sales of 460,000 units and turning profits, earning nearly 200 million in net profit. The company has raised its sales KPI for this year to 580,000-650,000 units, and the annual net profit target has been increased to 1 billion yuan, further pledging to strive for annual sales of 1 million units and achieve a net profit of 5 billion yuan next year.

Looking solely at the third quarter, Leapmotor's revenue doubled year-on-year to nearly 20 billion yuan. The revenue scale is built on the foundation of rapid sales growth, with deliveries doubling to 173,900 units during the same period. It is worth mentioning that despite fierce price competition, Leapmotor's gross margin not only did not decline but instead increased, recording 14.5% in the third quarter, up 6.4 percentage points compared to the same period last year.

People may be curious about how Leapmotor has avoided the pitfalls of WM Motor and Neta during its ten-year journey in car manufacturing, and how its sales halo has overshadowed many first-generation new force stars. The answer behind this is the effectiveness of scale effects and cost reduction.

In the automotive industry, scale effects are the core determinants of gross margin and profitability. Currently, the C10's monthly sales have exceeded 20,000 units, while the B01, B10, C11, and C16 all have stable monthly sales exceeding 10,000 units. Clearly, Leapmotor is no longer relying on just one or two blockbuster models but has formed a stable product matrix that consistently increases volume.

Cost reduction is another driving force. As a company that prides itself on comprehensive in-house research and development, Leapmotor has integrated the "big components" of electric vehicles and some high-margin parts into its R&D system over the past two years, promoting the generalization of platform components. Finally, with the current delivery curve continuously rising, significant benefits are being realized.

Overall, Leapmotor has crossed the most critical profitability inflection point for new forces through years of planning and has established a foothold in the market. This is also the core window for a new force car company to achieve a positive cycle and let its performance snowball.

However, having just crossed this historical milestone, Leapmotor still faces challenges brought by market trends.

Analyzing the financial report, the B01 model in the 100,000 yuan price range began to ramp up quickly in the third quarter, accounting for 18% of the model structure, indicating that Leapmotor's overall model structure continues to descend.

On the other hand, the three expenses this quarter have significantly increased, with R&D spending rising by 120 million yuan quarter-on-quarter, mainly due to increased investment in super extended-range models and smart technology, while sales and management expenses also continued to rise this quarter due to increased investment in new vehicle launches and the sales and management personnel brought about by business expansion.

Therefore, although Leapmotor's overall gross margin was higher than expected this time, the significant quarter-on-quarter increase in the three expenses eroded some profits, resulting in a net profit decline of 10 million yuan quarter-on-quarter, which was below market expectations.

Fortunately, Leapmotor is well-resourced, with nearly 34 billion yuan in cash on hand as of September 30, 2025. Next, it is set to play more cards, quickly capturing market share and achieving its positioning as the "top new force." "The 1 million target that has already been released externally, once stated, has no possibility of adjustment." At the performance meeting that evening, Leapmotor CFO Li Tengfei said in a Versailles manner.

According to the plan, the subsequent expansion of Leapmotor's product lineup will significantly impact its competitiveness over the next two years. Li Tengfei made it clear that next year will be a big year for Leapmotor's products, including two new models each from the A series and D series, as well as updates to existing models. The goal is to complete the full matrix layout of A, B, C, and D series by 2026, covering various market segments such as sedans, SUVs, and MPVs.

Among them, the D series is expected to contribute profits to Leapmotor, with a gross profit margin designed to be in the range of 15% to 20%.

Li Tengfei revealed that the blind orders for the Leapmotor D19 have already set a historical record for the Leapmotor brand. "The D19 will definitely be a product that will leave everyone astonished, and the entire company has very high confidence in the D series," Li Tengfei stated. In addition, there is also an MPV in the D series that is ready to launch and will also be available for sale next year.

From A to D, each of the four series balances volume and profit, allowing Leapmotor to move more steadily in the domestic market, but it is far from satisfied with this.

"Leapmotor's sales channels will exceed 1,000 by the end of this year and surpass 1,500 next year. With the launch of the A series products and the hot sales of the B series, Leapmotor's overall channels will continue to extend into fourth-tier, fifth-tier, and even lower-level cities, and the speed will be even faster," Li Tengfei said.

It is evident that Leapmotor wants to seize the opportunity, as domestic competitors like Deep Blue and Aion have already begun to pursue relentlessly. Achieving a sales target of one million units and a net profit of 5 billion yuan next year is no small challenge. In response, Leapmotor also has another major weapon—expansion.

Next, growth in overseas markets will become a new source of incremental growth for Leapmotor. Li Tengfei stated that in October and November, Leapmotor's overseas sales experienced explosive growth, with overseas sales orders reaching 12,000 units in October, and expected orders in November to exceed 15,000 units.

"The overseas signing volume in October increased by over 100% month-on-month," Li Tengfei said, noting that the cost-performance advantage of Leapmotor models is gaining a reputation in the European, Middle Eastern, and Southeast Asian markets.

Next year, Leapmotor International aims to capitalize on this momentum by launching two localized projects overseas. The first is to complete the localization project in Malaysia, introducing the first model C10, and to complete the localization project in Europe by the end of 2026. Additionally, in Europe, products from the lafa5 and A platform will be gradually introduced.

Li Tengfei expects that Leapmotor's overseas market will contribute 100,000 to 150,000 units in performance next year. Meanwhile, the first overseas model project of Hongqi, in cooperation with FAW, has already been established, with mass production expected in the second half of next year for overseas sales.

Li Tengfei pointed out that R&D expenditures in the third quarter have indeed increased significantly, which is Leapmotor gearing up for technologies in intelligent driving and new models, ensuring that Leapmotor masters all key technological resources in the L3-L4 era. He then threw out the ONE MORE THING, stating that the company is developing a "new species."

"At the strategic level, the planning for the new species has been discussed and is very clear in terms of product, brand, and channel direction," Li Tengfei stated. It is different from all products on the market and is a product that explores new categories, expected to be launched in 2027 or 2028 In the favorable situation, Leapmotor seems to be poised to become the next "BYD" in the automotive circle. However, with the current market environment being unpredictable and facing the relentless pressure from competitors, Leapmotor must fulfill its commitments and accelerate the pace of consolidating its market share