Recently, Leapmotor released its 2025 financial report, stunning the market.

The report shows that the company delivered nearly 600,000 new vehicles throughout the year, doubling sales for two consecutive years and achieving full-year profitability for the first time. Operating revenue exceeded RMB 64.7 billion, and the gross profit margin climbed to a historic peak of 14.5%, making it the second new energy vehicle manufacturer among emerging automakers to achieve annual profitability.

Behind this financial report lies Leapmotor's clear survival logic: avoiding flashy marketing and not betting on high-cost advanced autonomous driving, but instead steadfastly following a route of 'scaling for survival and cost reduction for market share.'

This inevitably draws comparisons to BYD, the leader in China's new energy vehicle market: In its early days, BYD lagged far behind NIO, XPeng, and Li Auto in terms of marketing and smart experience. However, by returning to the essence of automotive industrial manufacturing, diluting costs through scale, and capturing the mass market with high cost-effectiveness, it ultimately achieved a breakthrough, growing into an industry leader.

| Scaling for Breakthrough |

In the development of China's new energy vehicle market, BYD's success has crystallized a clear internal logic:

Returning to the essence of large-scale automotive manufacturing, diluting costs in R&D, production, and supply chain through scale expansion, relying on precise mass-market positioning to accumulate sales, thereby achieving profitability breakthroughs, and ultimately reaching the goal of overtaking competitors through alternative means.

Today, Leapmotor is steadily following this proven development path, with scale advantages becoming its core support for achieving profitability and solidifying market position.

In 2025, Leapmotor delivered 596,555 new vehicles throughout the year, a year-on-year increase of 103%, doubling sales for two consecutive years and firmly occupying the top spot in sales among China's emerging automaker brands.

Among them, monthly sales in October and November both exceeded 70,000 units, demonstrating strong growth momentum and solid development resilience.

The core reason for Leapmotor's rapid scale expansion lies in its precise market positioning.

Leapmotor does not deliberately pursue a high-end brand label but instead targets the mainstream mass-market consumer segment priced between RMB 100,000 and RMB 200,000.

According to statistics from the China Association of Automobile Manufacturers, cumulative sales of new energy vehicle models in this price range reached 6.941 million units in 2025, contributing over 50% of total sales and representing the highest proportion in the entire new energy market.

The RMB 100,000–RMB 200,000 price range meets core Rigid demand (essential needs) such as first-time family purchases and daily commuting, aligning with the budgets of most families. Users are highly price-sensitive, and the market has vast potential.

With this positioning, Leapmotor has democratized high-end configurations, laying a solid foundation for scale growth.

Accompanying rapid scale growth, Leapmotor's financial data has also improved significantly.

Full-year operating revenue reached RMB 64.73 billion in 2025, a year-on-year increase of 101.3%, with net profit reaching RMB 540 million, successfully achieving annual profitability and becoming the second domestic emerging automaker to reach this milestone.

Meanwhile, the company's gross profit margin climbed to a historic high of 14.5%.

This series of data clearly shows that Leapmotor's economies of scale have successfully translated into tangible profitability.

Despite achieving annual profitability, Leapmotor's foundations remain relatively weak, with a net profit margin of less than 1% and a per-unit net profit of approximately RMB 905, far below industry health levels.

If the industry experiences an escalation in price wars, a decline in market demand, or an increase in supply chain costs, it could easily slip back into the red. Moreover, competition in the new energy vehicle market has reached a fever pitch.

It faces market pressure from traditional automotive giants ahead and fierce competition from emerging automakers behind. To sustain scale growth, Leapmotor still faces significant challenges.

| Self-Research and Self-Production for Cost Reduction |

The core support for Leapmotor's scale expansion and affordable pricing strategy lies in the cost barriers built through full-domain self-research + a highly autonomous supply chain, forming a product competitiveness of 'high quality without high prices.'

Leapmotor has consistently adhered to a full-domain self-research and self-production strategy, with a current self-research and self-production rate of core components as high as 65%, covering key areas such as vehicle architecture, electronic and electrical systems, batteries, and electric drives. This approach is similar to BYD's.

Leapmotor's Vice President Shu Chuncheng once calculated that compared to procuring components externally, the self-research and self-production model offers a cost advantage of about 10%. This allows profits from the components segment to be passed on to consumers while effectively ensuring product quality and technological iteration speed.

Critically, the successful implementation of the LEAP3.5 technology architecture has enabled some of Leapmotor's models to achieve a parts commonality rate of 88%.

Taking its C-series SUVs as an example, the three models in this series share 88% of their components, significantly reducing R&D and manufacturing costs. Simultaneously, through innovations in central domain control architecture and super integration of hardware and software, it has achieved the dual goals of efficiency improvement and cost optimization.

In terms of R&D investment, Leapmotor has always maintained a rational and pragmatic attitude, avoiding blind bets on high-cost advanced autonomous driving technologies. Instead, it focuses on users' actual travel needs, prioritizing the implementation of practical smart configurations and core foundational technologies.

In 2025, Leapmotor successfully launched its urban commuting navigation function and gradually expanded its coverage, effectively controlling R&D costs while meeting users' smart travel needs.

Its core R&D resources are concentrated in foundational areas such as the three-electric systems (battery, motor, and electronic control). Self-developed technologies like the CTC (Cell-to-Chassis) battery-chassis integration and the seven-in-one oil-cooled electric drive not only enhance product performance but also achieve precise cost control through self-production.

Among them, the CTC 2.0 Plus technology increases battery energy density by 18%, while the seven-in-one oil-cooled electric drive improves power response speed by five times through functional integration, balancing product performance and cost-effectiveness.

The value of self-research, self-production, and supply chain autonomy is further reflected in cost controllability and risk resistance.

Relying on a highly autonomous component production system, Leapmotor can bypass external suppliers' price premiums and supply fluctuations, maintaining more stable production costs and rhythms amid external shocks such as industry-wide raw material price hikes, chip shortages, and supply chain disruptions.

Simultaneously, the cost advantages brought by self-research and self-production support the company's sustained implementation of affordable pricing strategies, making 'high quality without high prices' a long-term sustainable business model.

Currently, Leapmotor has established 17 component factories and built multiple production bases in Huzhou, Jinhua, and other locations in Zhejiang Province, achieving autonomous production of key components such as battery packs and electric drives.

Among them, the Huzhou battery pack project, once completed, will have an annual production capacity of 384,000 vehicle-mounted batteries, further ensuring supply chain stability and cost controllability.

Additionally, the strategic investment from FAW Group has also brought Leapmotor full-industry-chain synergies. Both parties jointly optimize the supply chain system and expand procurement scale, further diluting costs through economies of scale.

| Aligned Path, Promising Future |

Overall, Leapmotor's current development path of 'scale + self-research + cost-effectiveness' is precisely the core logic behind BYD's success and is becoming an inevitable route for China's new energy vehicle development.

After years of solid layout, Leapmotor has initially taken on the appearance of a 'smaller BYD':

Both companies focus on the mass market as their core battleground, abandoning niche positioning and targeting mainstream consumer groups. They achieve economies of scale through explosive sales growth, thereby diluting R&D, production, and supply chain costs and solidifying the foundations for sustainable development.

Specifically, the core of this successful path lies in constructing a complete development system that is 'rooted in the mass market, centered on self-researched technologies, supported by full-chain layout, and extended through globalization.' Its internal logic can be broken down into three points:

First, adhering to a mass-market positioning, diluting costs through economies of scale, and forming a virtuous cycle of 'increased sales—reduced costs—optimized pricing—further sales growth.' This is the foundation for sustainable development.

Second, insisting on full-industry-chain self-research and self-production, achieving autonomy and controllability in core areas such as batteries, semiconductors, and vehicles, thereby avoiding 'chokepoint' risks from external suppliers while achieving dual control over costs and quality, providing core support for product iteration and pricing advantages.

Third, balancing channel and globalization layout (layout), with 'wide-coverage, down-to-earth' terminal channels meeting mass demand and early overseas market expansion strategies further expanding scale and enhancing global influence, forming an internally and externally linked development pattern.

In addition to cost reduction through scale and self-research, Leapmotor is also accelerating its globalization layout and has achieved certain results.

However, it cannot be denied that, constrained by factors such as development time and resource accumulation, Leapmotor still has a significant gap compared to BYD. This gap is an objective reality of its growth stage, primarily concentrated in three areas:

First is the scale gap: BYD sells over 3 million vehicles annually, forming a virtuous cycle of 'scale—cost—price—sales,' while Leapmotor's nearly 600,000 units in 2025, though profitable, have not yet reached the optimal cost threshold, leaving room for improving economies of scale.

Second is the industrial chain integration gap: Leapmotor's self-research and self-production rate for core components is 65%, with 35% still dependent on external procurement, indicating room for strengthening autonomous controllability over the industrial chain.

Third is the brand gap: BYD has become a global leader with strong brand premium capabilities and coverage across all price ranges. In contrast, Leapmotor is constrained by its 'cost-effectiveness' label, focusing on the mid-to-low-end market, with a long road ahead for brand upgrading.

Leapmotor's development is not only crucial to itself but also holds significant industry importance.

Amid the intensifying price wars in the new energy vehicle market, even once high-end-focused emerging automakers like NIO, XPeng, and Li Auto are adjusting their strategies to prioritize scale. Among them, Leapmotor has pursued this path most steadfastly and solidly.

Its development journey validates the correctness of the path of 'scaling for survival, self-research for cost reduction, and cost-effectiveness for market share,' breaking the inherent cognition (established perception) that 'emerging automakers must pursue high-end routes.'

From an industry perspective, Leapmotor provides a replicable survival and development model for more new energy vehicle companies, also driving China's new energy vehicle industry toward a more pragmatic and sustainable direction.

| Conclusion |

Flipping through Leapmotor's 2025 financial report, there is no aggressive technological hype—only solid sales growth, steadily improving profitability, and a clear development path. This is precisely what makes it most resemble early-stage BYD.

BYD's success was never built on temporary marketing hype or cutting-edge smart concepts but on returning to the essence of automotive industrial manufacturing, diluting costs through scale, and meeting mass demand with pragmatic technological implementation, ultimately achieving a leap from follower to leader.

Today, Leapmotor is steadily following BYD's successful path. Its logic of 'scaling for survival, self-research and self-production for cost reduction, and pragmatism for market success' has not only enabled it to cross from losses to profitability but also provided a viable development path for China's new energy vehicle market.

He Xiaopeng has also bluntly stated: 'At its core, automobiles are still mass-produced industrial products. Detached from scale, discussing technology and profitability will ultimately prove unsustainable.'

At this critical stage where the industry is transitioning from 'wild growth' to a 'knockout phase,' technology detached from scale is merely a castle in the air, and brands detached from the masses will inevitably be eliminated by the market.

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