After a grueling decade-long marathon, profitability has finally been achieved.

On the evening of January 13, LeapMotor issued a profit forecast, revealing that it achieved positive net profit in the fourth quarter of 2024, one year ahead of schedule in reaching its single-quarter profitability target. This milestone positions LeapMotor as the fifth profitable new energy vehicle company, joining Tesla, BYD, Li Auto, and Thalys.

In 2024, LeapMotor's sales performance was remarkable, setting a new monthly delivery record for seven consecutive months, with a cumulative delivery of nearly 300,000 vehicles throughout the year. Notably, deliveries exceeded 40,000 for two straight months in the fourth quarter.

LeapMotor's entry into the profitability club signifies that it is no longer just a "new force" but a truly world-class mainstream brand.

Reacting to this news, LeapMotor's share price surged 13% on January 14 but retreated on January 15, falling 4.42% by midday to HK$32.4, valuing the company at HK$43.318 billion (approximately US$5.562 billion), comparable to Zeekr's market value of US$6.474 billion.

Zhu Jiangming: If I had known it would cost 20 billion to make cars, I wouldn't have done it.

LeapMotor's origins are marked by a tale of "fearlessness stemming from ignorance."

In 2015, at the first floor of No. 451, Internet of Things Street, Binjiang District, Hangzhou, Zhu Jiangming and Fu Liquan, co-founders of Dahua Technology, jointly founded LeapMotor. Zhu Jiangming once candidly admitted, "If I had known from the outset that it would cost 20 billion to make cars, I might not have done it. At that time, I believed it could be done with just a few billion."

Zhu Jiangming named his automotive company "LeapMotor," partly to reflect a mindset of "starting from scratch" and partly to express the aspiration of becoming an industry "leader."

However, LeapMotor faced daunting challenges from the outset.

Unlike new forces in the automotive industry that originated from the internet sector, such as NIO, XPeng, and Li Auto, LeapMotor lacked their substantial financing and topic flow advantages. Additionally, compared to "second-generation rich" sub-brands heavily invested in by traditional automotive giants like Zeekr, AION, Avita, SL03, VOYAH, and IM Motors in the new energy era, LeapMotor lacked their automotive industry experience and capital advantages. Furthermore, facing technology giants from the smartphone sector like Huawei and Xiaomi, LeapMotor lacked their brand, R&D, and channel advantages.

Compared to these "darlings of fate," LeapMotor resembled the unassuming student in the class whose background simply couldn't tell a "sexy" story.

Yet, it is this "new force without any apparent advantages" that has emerged as the biggest dark horse in the new energy vehicle sector. Zhu Jiangming aptly described LeapMotor as the turtle in the tortoise and the hare race.

Source: China Daily

In 2023, LeapMotor surpassed XPeng in annual sales and overtook NIO in monthly sales in July 2024. By August 2024, LeapMotor had reached the milestone of 30,000 monthly sales, becoming the third new force automaker to achieve this feat after Li Auto and Wenjie. In September, LeapMotor even surpassed GAC AION in weekly sales in some weeks, edging closer to Wenjie Automotive, already displaying the momentum of becoming a "leader" among new forces in automotive manufacturing.

In December 2024, LeapMotor delivered 42,517 new vehicles, marking a year-on-year increase of 128%, with deliveries exceeding 40,000 for two consecutive months.

In 2024, LeapMotor cumulatively delivered nearly 300,000 vehicles, surpassing its annual target. For 2025, LeapMotor aims to hit a sales target of 500,000 vehicles throughout the year, doubling this year's figure.

Replicating Success: LeapMotor's Ambition Mirrors BYD's

LeapMotor, which has taken steady steps, has long shown signs of success.

Low prices and high configurations are notable features of LeapMotor, especially its near-perfect "reproduction" of Li Auto, earning it the moniker of "half-price Li Auto." For instance, Li Auto emphasizes that its products are "mobile homes," focusing on vehicle comfort, large space, and scenario adaptability. Similarly, LeapMotor's C10 targets family users, emphasizing a comfortable ride experience and spaciousness, positioning itself as the "more ideal home for young people."

With the same extended-range powertrain, similar space and configurations, and comparable user experiences, the price of the C10 is less than half that of Li Auto's L7, providing a compelling reason for budget-conscious users who love Li Auto's cars.

Source: LeapMotor

However, "luxury alternatives" and "half-price Li Auto" are merely the surface of LeapMotor's success. In its journey from 1 to 100, LeapMotor has actually replicated BYD's path.

LeapMotor founder Zhu Jiangming stated, "I am an engineer by trade and a technology-oriented manager. I want to use technological advantages to make products. I hope to bring users higher configurations, better quality, and good but affordable products."

During the 2024 Beijing Auto Show, when asked about the phenomenon of automotive company CEOs "personally entering the fray" to attract traffic, Zhu Jiangming candidly replied, "I don't have that much traffic or popularity, so I will still honestly do my own technology and strive to do it well." This also underscores that LeapMotor is essentially a technology-driven company.

These statements resonate with BYD's Wang Chuanfu's "engineer's mindset," and the reason BYD sparked a frenzy of "same price for oil and electricity" was precisely due to its vertical integration of technology and commitment to self-research and development.

Source: LeapMotor

Both Zhu Jiangming and other senior executives of LeapMotor have repeatedly highlighted the "full-scope self-research and development" strategy. Zhu Jiangming calls "full-scope self-research and development" the necessary path to shaping competitive barriers and a prerequisite for creating a "consumer foundry."

Zhu Jiangming explained, "One of the differences between us and BYD is that we outsource battery cells. Battery cells are a capital-intensive business, and we will try to avoid large capital investments. BYD has built a lot of capacity, and if sales can't keep up, equipment will idle, which is a significant risk."

Currently, LeapMotor has achieved 70% self-research and self-manufacturing capabilities in vehicle costs. Except for outsourced battery cells, interior and exterior trims, and chassis and automotive electronics that are self-researched and outsourced for production, all other components are self-researched and self-produced, making it the new force automaker with the highest degree of vertical integration and full-scope self-research and development capabilities in China.

Through self-research and development, LeapMotor produced more than 110,000 battery packs in 2022, saving about 10% compared to outsourcing. Wu Qiang, co-president of LeapMotor, said that since September 2022, LeapMotor's overall costs have been reduced by 16%, 16%, and 10% in three stages, while the guideline selling prices of products during the same period fell by 19%, 0%, and 4%, respectively. The comprehensive cost reduction rates for the three models, T03, C01, and C11, all exceeded 36%.

Zhu Jiangming asserted, "Our cost control is not inferior to BYD's." If BYD reduces prices, we will follow suit.

The benefits of the full-scope self-research and development strategy are also evident in LeapMotor's financial reports. LeapMotor's R&D investment has not been high among new forces in automotive manufacturing. Taking 2023 as an example, LeapMotor's R&D investment was 1.92 billion, while XPeng's R&D investment was 5.28 billion. Considering the final sales volume, LeapMotor's R&D investment-output ratio is higher. In 2024, LeapMotor's sales volume ranked second among all new forces in automotive manufacturing, reaching 293,700 vehicles, indicating that the full-scope self-research and development strategy is becoming LeapMotor's core competitiveness.

Zhu Jiangming judged that today's LeapMotor is at the same juncture as "BYD in 2020." In 2020, BYD sold 416,300 vehicles and has since achieved an annual growth rate of over 100%. 2020 was a turning point for BYD.

From an engineer's mindset to full-stack self-research and development, everything LeapMotor does does not resemble the style of new forces but is instead as steady as an old automaker. Perhaps from the outset, LeapMotor did not position itself as a new force. Or perhaps LeapMotor's goal has always been BYD.

Challenges Ahead: LeapMotor's High-End Ambitions

LeapMotor has proven that in the fiercely competitive new energy market, even without outstanding financing, topic flow, or automotive industry experience, profitability can still be achieved through reasonable cost control, technological research and development, and other efforts.

However, it must be acknowledged that LeapMotor's position at the top of new forces is not solid. In 2025, compared to 2024, the market will undergo tremendous changes.

In 2025, competition in the new energy vehicle industry will remain fierce, and increasing sales will be the "main task" for all automakers. Zhang Yongwei, vice chairman and secretary-general of the China Electric Vehicle Hundred Person Council, predicted at a media communication meeting that in 2025, new energy vehicle sales will reach approximately 16.5 million vehicles (including exports), achieving a growth rate of about 30%.

Against this backdrop, models in the 100,000-200,000 yuan range, as the choice for most consumers, face the fiercest competition. Many new energy vehicle brands are deploying a "sea of cars" strategy in this sector, and this range happens to be LeapMotor's main track.

In 2024, LeapMotor was the "half-price Li Auto"; by 2025, the market will be flooded with "half-price Li Autos." Shenlan, Lynk & Co, Yinhe, and others have launched "Li Auto-like" large SUVs, and most of them are also cost-effective players.

It may be more difficult for LeapMotor to stand out with cost-effectiveness alone. Judging from the 2025 work priorities previously announced by Zhu Jiangming, LeapMotor intends to accelerate the high-end transformation of its brand this year.

However, for LeapMotor, the path to high-end is not without challenges. Currently, the most expensive model under LeapMotor is the LeapMotor C11, with a guide price ranging from 148,800 to 205,800 yuan. In other words, LeapMotor has not yet entered the ranks of vehicles priced above 200,000 yuan.

Once entering the ranks of vehicles priced above 200,000 yuan, the effectiveness of the luxury alternative strategy will inevitably diminish, falling into the trap of "why not add money to buy the genuine article."

Additionally, although LeapMotor's sales volume is already in the first tier of new forces, its brand awareness still cannot compare with that of NIO, XPeng, and Li Auto. For many potential consumers, LeapMotor still belongs to the "niche brand" category.

"Niche brand" is not a compliment in the automotive industry. WM Motor, HiPhi, Nezha, and GeekCar are essentially niche brands. They have all had their moments of glory. Nezha was even renowned as a "dark horse" in the automotive industry in 2022, but with the slightest carelessness, the brand faded away. The collapse of most brands in recent years has also created a psychological defense among consumers that "niche brands cannot be bought," which undoubtedly puts some pressure on users considering LeapMotor.

Therefore, LeapMotor urgently needs to find a new competitive edge. Otherwise, it may not become the next BYD but the next Nezha.

Nevertheless, profitability also indicates that LeapMotor has essentially passed the stage of seeking "survival." LeapMotor, which has already begun to show a trend of "leading," can this momentum be sustained? Only time will tell!

Source: LeiTech