Author | Xu Zhi

Editor | Wang Pan

"When talking about his early investment in the automotive industry, Zhou Hongyi regretted his choice and said, "I was blind."

At that time, the new energy vehicle industry was booming, and Zhou Hongyi didn't want to miss out on this "huge revolutionary opportunity." When looking for investment targets, he first screened out a batch of "PPT car-making" companies, and then passed on already established companies like NIO, XPeng, and Li Auto that didn't need investment. In the end, only two companies remained: Nezha and Leapro.

The reason for ultimately choosing Nezha was because he didn't like the name Leapro, as Zhou Hongyi believed that the implication of "starting from zero" wasn't good.

The rest of the story is familiar to everyone. Despite Zhou Hongyi's frequent personal appearances to promote Nezha, he couldn't reverse the company's decline, while Leapro soared and became unaffordable.

According to sales data released by Leapro, 38,177 vehicles were delivered in October, marking a year-on-year increase of 109.7% and setting a new monthly delivery record for multiple consecutive months. In October, Leapro's order volume also hit a record high, with over 42,000 orders in a single month, and orders for the C10, C11, and C16 models all exceeded 10,000.

This is also the third consecutive month that Leapro has ranked among the top three new-energy vehicle brands, with sales exceeding 30,000 units each month. In the first ten months of this year, Leapro's cumulative sales exceeded 200,000 units, with a year-on-year growth rate close to doubling, far outpacing other automakers.

At this point, the new-energy vehicle industry has basically formed a "two superpowers and multiple strong players" landscape: Li Auto and AITO lead in both volume and price, while players like Leapro, NIO, XPeng, Xiaomi, and Zeekr continue to catch up. Among them, Leapro is steadily achieving a "leading" position.

The latest data shows that in the sales rankings for the 44th week of 2024 (October 28 - November 3), Leapro sold 8,400 units, ranking third and only 200 units behind the second-place company.

This year, Leapro has not only quickly surpassed the "boom-bust line" of 10,000 and 20,000 monthly sales but has also surpassed established players like NIO and XPeng. When discussing this second-tier new-energy vehicle brand that was relatively unknown last year, most people and industry competitors are equally puzzled, and can only label it as a dark horse or underdog.

In fact, Leapro's success has been traceable step by step.

Following Li Auto's lead, Leapro has achieved "luxury equality"

After Li Auto fully validated the feasibility of extended-range electric vehicles (EREVs), a large number of automakers quickly followed suit, with Leapro undoubtedly standing out among them.

Leapro's notable feature is its low price and high configuration, especially its perfect "replication" of Li Auto, which has earned it the title of "half-price Li Auto." For example, Li Auto emphasizes that its products are "mobile homes," focusing on vehicle comfort, large space, and scenario adaptability. Similarly, Leapro's C10 targets family users, emphasizing comfortable riding experiences and spacious interiors, aiming to become "an ideal home for young people."

With the same EREV powertrain, similar space and configuration, and comparable user experience, the price of the C10 is less than half that of Li Auto's L7. This provides an irresistible option for users with limited budgets who like Li Auto's products.

Zhu Mingjiang, Chairman of Leapro, once said directly, "Every detail of the Leapro C10 is learned from Li Auto's L7. In understanding user needs, vehicle handling comfort, and in-car display methods, Li Auto is worth learning from."

The C16, a 6-seater mid-to-large SUV, is also directly targeted at Li Auto's L8. In addition to its large space and third row, the C16 further aligns with the L8 in terms of appearance and interior, and its price is also half that of the L8.

At the end of October, Leapro released a procurement formula for D16 chassis performance tuning. Although the company did not reveal too much information, based on Leapro's naming conventions for its products, the industry generally predicts that this will be a full-size premium SUV that rivals Li Auto's L9 and AITO's M9, equipped with a CDC suspension.

Although this approach has been widely criticized, in the domestic market, "paying homage" and "replicating" have always been the most reliable and effective paths. From Tencent's early success in instant messaging and gaming to Xiaomi and other smartphone manufacturers "paying homage" to Apple in the smartphone era, to numerous automakers mimicking Tesla in the new energy vehicle industry, these examples fully demonstrate what is meant by a business model that achieves more with less effort.

After all, survival is always the top priority in the brutal competition. After stabilizing the basic market, companies have plenty of time and capital to build their own moats, as evidenced by Xiaomi.

It is worth noting that Leapro is not the only company that has imitated Li Auto, but few have been able to reflect success in sales figures. In addition to Leapro truly learning the "essence" in all aspects, its ultimate cost-effectiveness is also an indispensable factor.

Meanwhile, compared to Li Auto, Leapro has a more diverse product line. Currently, it has five models: T03, C01, C10, C11, and C16, covering mini cars, mid-to-large cars, mid-size SUVs, and mid-to-large SUVs, with a price range of 49,900 to 209,800 yuan.

Of course, everything has two sides. Leapro's cost-effective pricing strategy not only significantly compresses its profit margins but also poses significant obstacles for its future high-end transformation.

Leapro's first-half 2024 financial report shows a gross margin of only 1.1%, far lower than the 12.2%, 14%, and 19.5% of NIO, XPeng, and Li Auto, respectively. Fortunately, as sales continue to climb, this figure is also improving.

Not like a new-energy vehicle company at all

Leapro was not initially favored when it was founded. Compared to other new-energy vehicle companies, Leapro lacked an internet gene and its unique selling points. Using the language commonly used in the current market, "Leapro has no story to tell," which may also be one of the reasons why Zhou Hongyi did not choose Leapro back then.

In fact, from technology to products to channels and marketing, Leapro's steady approach does make it look like an outlier.

Zhu Mingjiang, who has a technical background, was nearly 50 years old when he founded Leapro. Compared to other leaders of new-energy vehicle companies, he is undoubtedly a "veteran." And when a veteran leads, stability and long-term vision are usually prioritized.

Unlike other new-energy vehicle companies that initially chose to cooperate with contract manufacturers, Leapro, like traditional automakers, attaches great importance to independent research and development. Its three-electric technologies, intelligent driving systems, and even automotive-grade AI chips are all independently developed. Meanwhile, Leapro also has its factories, allowing it to firmly control and manage the production process. This is also an important reason why Leapro can achieve ultimate cost-effectiveness.

In terms of product positioning, Leapro has always targeted the low-to-mid-end market with a more pragmatic attitude, focusing on practical performance such as vehicle range, space, and configuration. Its strategy of "good but not expensive" is highly aligned with the thinking of traditional automakers. Leapro's product iterations are also relatively stable, focusing more on optimizing and improving existing models rather than frequently launching new ones.

In terms of expense investment, Leapro is also quite "stingy" among new-energy vehicle companies. Compared to the billions of yuan in research and development investments by NIO, XPeng, and Li Auto each year, Leapro's research and development investment in 2023 was only 1.92 billion yuan, putting it at the bottom along with Nezha. Zhu Mingjiang did not follow the trend this year by personally promoting the company, and Leapro also made very few moves in marketing, in stark contrast to the pervasive promotion of other new-energy vehicle companies.

Zhu Jiangming once said that he and Leapro have been "very frugal" over the years, "Only by providing higher quality at lower prices than our peers can we survive."

New-energy vehicle companies with a stronger internet gene often focus on online sales and direct sales models for their sales channels. In contrast, Leapro adopts the traditional automaker's dealership model. As of August 31, Leapro had a total of 653 stores, including 169 Leapro centers, 304 experience centers, and 180 service centers, providing a more convenient car-buying and after-sales service experience.

In October 2023, Leapro and the Stellantis Group jointly established the first reverse joint venture in the Chinese automotive industry, "Leapro International," responsible for the export, sales, and local production of Leapro vehicles in global markets. This is seen as a further acceleration of Leapro's overseas layout and sales efficiency.

Overall stability has also brought adverse effects to the conservative Leapro. In addition to the increasingly difficult high-end transformation mentioned earlier, Leapro's intelligent technology performance has significantly lagged behind its peers. In an era where consumers are increasingly valuing intelligent driving, this will become a major constraint for Leapro.

Aiming to be the next BYD

Recently, Leapro has welcomed a new policy opportunity: the state requires that the renewal of official vehicles should prioritize domestic new energy vehicles, with a procurement ratio of more than 30%, and a procurement price limit of 180,000 yuan for official vehicles. This brings huge business opportunities to automakers like Leapro and BYD, with a potential market of 1.5 million vehicles and continuing growth.

Leapro has already made layouts in the official vehicle sector. Previously, Leapro has entered the agreement supply catalogs of governments in Guangdong, Jiangsu, Hunan, Sichuan, and other regions. In July this year, the C01 and C11 administrative versions were put into use in Zhejiang provincial government agencies. Government orders will be another stable growth curve for Leapro.

The favorable policy and significant sales growth this year have allowed Leapro to set its sights on broader horizons. Zhu Mingjiang's long-term goal for Leapro is to achieve a future monthly sales volume of 300,000 units and an annual sales volume of 4 million units, striving to become a "world-class electric vehicle company." Regarding the goal of annual sales of 4 million units, Zhu Jiangming explained that this is the "threshold" for the top ten electric vehicle companies globally.

If this statement were made two years ago, it might have been considered far-fetched. But now, with Leapro always capable of creating miracles, it seems like anything is possible.

It is not difficult to see that from the beginning, Leapro may not have positioned itself as a new-energy vehicle company. Or rather, Leapro's goal has always been to catch up with BYD.

In the future, Leapro plans to take a two-step approach, covering the 100,000-150,000 yuan price range downward and exploring the 200,000 yuan price range upward. In 2025, Leapro will launch the B series models, mainly targeting the 100,000-150,000 yuan market, while products in 2026 will focus more on the around 200,000 yuan market.

Overall, Leapro has many opportunities but also prominent disadvantages. As for how long it can continue to "lead," only time will tell.