Leapmotor Turns Profitable: 100,000-Yuan Strategy and Scale Effects

Leapmotor swung to an operating profit in the first half of 2026. Revenue reached 38.16 billion yuan, up 57.2% year on year. Deliveries totaled 356,000 units, up 60.8% year on year. Operating profit was 128 million yuan, improving from a loss of 88.63 million yuan in the same period last year. According to Eastland’s reporting for Huxiu, monthly sales exceeded 100,000 units in both July and August. Exports in July reached nearly 18,000 units.

This is outstanding growth at a time when the industry as a whole faces price competition and slowing demand. The company is an emerging EV maker founded in December 2015. Sales surged from 2024 onward, changing the dynamics of the race for the top spot. Behind this shift are changes in product positioning and cost structure. The contribution of overseas expansion cannot be ignored either.

Overview of H1 2026 Results and Sales

On August 24, 2026, the company disclosed its interim results announcement in the Hong Kong market. The average transaction price in the first half declined slightly. Even so, higher sales volumes offset the decline, securing both revenue and profit growth. Gross margin was 11.7%, with gross profit of 4.45 billion yuan, up 30% year on year. This shows progress in balancing sales growth with profitability.

Cumulative deliveries from January to August 2026 reached 561,000 units, up 70.6% year on year. Monthly sales of 100,000 units are an exceptional level for a Chinese emerging EV maker. In the second quarter, quarterly sales at competitors stayed at around 100,000 units each. NIO delivered 108,000 units, Xpeng 103,000 units, and Li Auto 98,000 units. Leapmotor’s monthly sales have reached a scale that rivals competitors’ quarterly volumes.

On the earnings front, the company posted its first quarterly operating profit in the second quarter. The expense ratio has continued to decline. Improved gross margin and restrained selling, general and administrative expenses advanced at the same time. The high-volume, low-margin model can be seen as having entered a profit-generating phase.

Annual Sales Trend Leading the Emerging Group

Looking back at its sales history, the turning point is clear. Deliveries in 2022 totaled 111,000 units, up 154% year on year. The breakdown was 62,000 units of the T03 mini car and 44,000 units of the C11. In 2023, deliveries were 144,000 units, with growth slowing to 29.7%. The C series accounted for 106,000 units and the T03 for 38,000 units.

In 2024, deliveries jumped to 294,000 units, up 103.8% year on year. The C series accounted for 225,000 units and the T03 for about 70,000 units. In 2025, deliveries reached 597,000 units, up 103.1% year on year, continuing to double. In April 2025, monthly sales topped 40,000 units, putting the company at the top among emerging makers. It then passed 70,000, 80,000, and 90,000 units in a short period.

The gap with competitors widened from 2025 onward. The company’s sales of 88,000 units in Q1 2025 were about 40% of the combined total of NIO, Xpeng, and Li Auto. By Q4 2025, that ratio had reached nearly 60%. In the two months of July-August 2026, it delivered 204,000 units. That is equivalent to 94% of the three companies’ combined total.

Amid difficult conditions across the industry, Leapmotor must have done something right to deliver these results

NIO was not stagnating either. Using Q1 2025 as the base, its growth rate in Q2 2026 was 156%. That was a recovery close to Leapmotor’s 181% over the same period. By contrast, Li Auto and Xpeng grew by only 6% and 10%, respectively. Selection is advancing even within the emerging group.

Product Strategy Focused on the

100,000-Yuan Segment The biggest factor lies in its realistic product positioning. Its prospectus called for focusing on the mid- to high-end market priced from 150,000 to 300,000 yuan. In practice, however, it flexibly adjusted its launches in response to market reaction. Avoiding an insistence on the mid- to high-end segment and securing high-volume price bands paid off.

In 2022, the mainstay was the T03 mini car, accounting for 56% of sales. It was equipped with features such as automatic parking and adaptive cruise control. Its price was slightly above other makers’ mini cars priced at 80,000 to 100,000 yuan. The C series accounted for about 40%, with an average selling price of 111,000 yuan. The average price was 116,000 yuan in 2023, 108,000 yuan in 2024, and 104,000 yuan in 2025. The company expanded scale without falling below the 100,000-yuan level.

Its distinctive feature is concentration in the narrow 100,000- to 120,000-yuan price band. Its equipment levels are on par with competitors in the 150,000- to 200,000-yuan class. It created a cycle of lowering prices to boost volume and thereby reducing costs. By holding the 100,000-yuan line, it avoided an image as a low-priced product. This can be seen as a decision that left room for future moves upmarket.

Moves upmarket have also begun. The D19, launched in April 2026, is priced in the 200,000- to 300,000-yuan range. Sales in July topped 10,000 units. The D99, launched in June, is positioned as a premium multi-purpose vehicle priced above 300,000 yuan. If both models gain a foothold, the four-series lineup of A, B, C, and D will be nearly complete. It will cover everything from the A05 at 63,900 yuan to the D99 priced above 300,000 yuan.

Price and Gross Margin Comparison with Three

Competitors Li Auto followed a path down from high prices. In 2023, its transaction price was 320,000 yuan, with a vehicle gross margin of 21.5%. In 2024, it fell to 277,000 yuan, with a gross margin of 19.8%. In 2025, it was 263,000 yuan, with gross margin down to 17.9%. In H1 2026, the price was 236,000 yuan, with a gross margin of 7.8%. The transaction price fell 10%, and gross profit dropped 65.9%. Sales were 193,000 units, down 5% year on year.

Maintaining a premium strategy makes profits more volatile. Unlike large automakers that can diversify across many models, emerging makers’ fortunes hinge directly on one or two models. A slowdown in premium cars brings price cuts and deteriorating margins at the same time. The Li Auto case illustrates that structure.

Xpeng’s pricing structure changed dramatically in 2024. Its average price plunged from 238,000 yuan in the first half to 170,000 yuan in the second half. Even so, gross margin rose 3.5 percentage points, showing improved fundamentals. It then stayed around 160,000 yuan for the following eight quarters. In H1 2026, the average price was 169,000 yuan, with a gross margin of 12.1%. Sales fell 15.1% year on year, and gross profit declined 9.8%. Xpeng differs in that its lower limit is 150,000 yuan, leaving room for further price cuts.

NIO responded not with direct price cuts but with sub-brands. It effectively lowered prices through the launch of ONVO and Firefly and battery-separation sales. From Q1 2025 onward, its average price rose for six consecutive quarters. In H1 2026, gross margin reached a record high of 18.7%. Sales rose 67.4% year on year, and gross profit surged 262%. The results are strong, but unit sales remain at 53.6% of Leapmotor’s. Leapmotor leads in balancing volume with profitability.

Path to Profitability Driven by Scale Effects

The starting point was a severe loss-making structure. In 2020, deliveries were below 10,000 units, so economies of scale did not work. The gross loss margin was 50.6%, with a gross loss of nearly 40,000 yuan per vehicle. In 2021, deliveries exceeded 40,000 units, but the gross loss margin was still 44%. Gross losses of more than 30,000 yuan per vehicle continued.

In 2021, the gross loss was 1.39 billion yuan, a loss margin of 44.3%. In 2022, the gross loss narrowed to 1.91 billion yuan, a loss margin of 15.4%. In 2023, gross margin reached 0.5%, hitting breakeven. In H1 2024, gross profit was 100 million yuan, for a gross margin of 8.4%. In H2 2024, gross profit was 110 million yuan, for a gross margin of 11.2%. In H2 2025, gross margin reached 14.8%.

The reversal in per-unit profit and loss is symbolic. From a loss of 40,000 yuan per vehicle in 2020, it turned to a profit of 16,000 yuan per vehicle in 2025. Over that period, sales volume grew 12.6-fold. Centralized parts procurement and a higher in-house manufacturing ratio likely contributed. Higher factory utilization also reduced the fixed-cost burden.

In H1 2026, gross margin fell to 11.7% due to lower transaction prices. Even so, gross profit in value terms rose 30% year on year. The effect of the strategy of cutting prices to expand volume remained. A lower expense ratio also supported the move into the black. It looks like a case where scale effects transformed the profit structure.

Partnership Strategy Driving Overseas Sales

and Earnings The partnership with Stellantis has brought a dual benefit. Stellantis provides European branding and a global sales network. Leapmotor provides electrification technology. Overseas sales in H1 2026 were 96,000 units, accounting for 27% of the total. That is the highest overseas ratio among emerging makers.

Europe’s emissions regulations generated income from the transfer of carbon credits. Revenue from carbon credit transfers in 2025 was 1.11 billion yuan. Added to gross profit from the vehicle business, it accelerated the earnings improvement. Exports also help cushion the impact of domestic price competition. Exchange-rate and logistics-cost fluctuations are challenges, but the diversification effect is large.

Compared with domestically focused competitors, revenue sources are more diversified. An overseas ratio of 27% indicates currency resilience and room for growth. Using the European sales network entails lower initial costs than building one from scratch. The combination of technology provision and credit income can be viewed as reasonable. Going forward, the focus will be on local production and parts procurement.

Editorial Opinion

On short-term impact. The establishment of 100,000-unit monthly sales is seen as having a direct effect on parts procurement and price negotiations. Domestic competitors are assessed to face growing pressure to balance room for price cuts with gross margins. The high overseas ratio is seen as a buffer against domestic competition. Over the next three to six months, management of order backlogs and utilization rates is expected to be the focus. Pricing and equipment competition among companies is seen intensifying further.

On the long-term perspective. Building stepwise from a 100,000-yuan base toward segments above 200,000 yuan is seen as potentially changing the earnings structure. The degree to which the D19 and D99 gain traction is assessed to determine the ceiling for average prices and gross margins. Whether dependence on carbon-credit income can be reduced and earnings generated from the vehicle business itself will be the challenge. Reorganization of local production and battery procurement is seen determining competitiveness over the next one to three years.

Questions from the editorial team. Can the scale gained through high-volume, low-margin sales be converted into technology investment? Whether in-house development of driver assistance and batteries will lead to differentiation is the question. Whether profits from overseas sales reflect a sustainable structure or temporary factors also needs verification. Volume leadership and profit leadership are different goals — which should take priority?

References

• “ 零跑凭什么？ “, by Eastland — 虎嗅网, 2026-09-14T23:27:55.000Z (ARR)
• Source URL: https://www.huxiu.com/article/4890809.html?f=rss