LEAPMOTOR has caught the express train to go global

Author | Chai Xuchen

Editor | Wang Xiaojuan

Who can be the next BYD, becoming one of the top 10 global car companies, has become the focus of competition among car companies today.

After firmly establishing its position with monthly sales of 30,000 units, on October 14th, the new force dark horse Leapmotor's new car B10 made its debut at the Paris Motor Show, sounding the horn for this "rising wave" to charge towards international giants.

As the first B-platform model under Leapmotor, B10 has a clear goal: to achieve high sales volume in the global market. Zhou Ying, the head of the marketing department, likened the positioning and significance of B10 to Leapmotor as what Mona is to XPeng and what Leijia is to Nio.

The birth of B10 signifies an upgrade in Leapmotor's ambitions.

Currently, Leapmotor is moving towards monthly sales of 40,000 to 50,000 units, becoming one of the leading brands in this round of elimination. However, Chairman Zhu Jiangming is far from satisfied. In an interview with Wall Street News after the meeting, he stated that it would be difficult to survive without 4 million annual sales in the future. This corresponds to a monthly sales level of over 300,000 units, which only BYD has achieved in China so far.

This is not Zhu Jiangming's "Versailles". Although Leapmotor is gradually making a name for itself in the segmented market based on scale, he lamented, "Compared to those global car companies, we are just making a little money to eat."

Zhu Jiangming can be considered "clear-headed". The current monthly sales range of 30,000 to 50,000 units where Leapmotor is located is a watershed. Crossing it can set off a snowball effect in performance, otherwise, there may be another downturn. The once glorious GAC Aion is a cautionary tale. In Zhu Jiangming's view, there is only one way for Leapmotor to break through - to aggressively pursue internationalization and enter the top 10 global car companies.

In fact, now is indeed the opportune moment for domestic car companies to go global. As new energy and intelligence overturn the century-old automotive landscape, when overseas brands are extending olive branches to new forces seeking cooperation, if Leapmotor can replicate its domestic leadership globally, it will have tremendous growth potential in the future.

Therefore, after partnering with the automotive giant Stellantis to establish an overseas joint venture company at the end of October last year, Leapmotor boarded the express train to go global, and the process of expanding overseas was accelerated. Zhu Jiangming pointed out that Stellantis has more than 100,000 existing sales outlets and service systems, all of which can be quickly utilized by Leapmotor, saving the need to go through the process of building component distribution, finance, insurance, and other systems. This can be seen as a "reduced dimension strike" for other brands.

Starting from September this year, Leapmotor's T03 and C10 models have been on sale in 13 European countries, one being an A00-level lightweight small car that matches European consumer preferences, and the other being a mid-size SUV that showcases product strength to compete with Tesla.

However, this is just the beginning of Leapmotor's overseas expansion. Next, it will completely change its positioning and replicate the successful model in China globally. Zhu Jiangming told Wall Street News that the reason Leapmotor broke through in the domestic market is precisely due to its affordable brand positioning and strategic focus, with the success of the C series being the best example Therefore, with the ambition to become a global giant, B10 became Leapmotor's first internationally developed product tailored to global demand. Zhu Jiangming revealed that three products have been planned internally for the B series, which will be released in March, June, and December next year. "Leapmotor hopes to lead the pack. The B series is crucial, aiming to capture the most competitive and largest market segment of 100-150,000 units."

At this moment, with the C series as the core, Leapmotor has outlined a grand product blueprint for the A\B\C\D four series, collectively covering the market of 80,000 to 300,000 RMB, helping Leapmotor secure these most imaginative market segments globally.

"At this stage, Leapmotor is a bit like BYD after selling tens of thousands of units, growing rapidly, and the future prospects will only get better," Zhu Jiangming said.

However, to truly become the next BYD, Leapmotor still faces a series of challenges. He admitted that the biggest challenge ahead is how to expand capabilities in channels, production capacity, management, etc., in sync with the expansion of scale. At this moment, players competing alongside Leapmotor off the field are also frantically catching up.

Facing numerous tests, can Zhu Jiangming steer this gradually expanding ship well, balance the layout of domestic and foreign markets, and realize the ultimate ambition?

The following is a dialogue transcript (edited) between Wall Street News and Chairman Zhu Jiangming, Chief Engineer Cao Li, and Marketing Director Zhou Ying:

Question: What is the strategic significance of the B10 launch event in Paris for the company's development?

Zhou Ying: Going global and the B series are two very important growth points for Leapmotor in the future. The B series is similar to NIO's ES series and XPeng's P7, serving as a very important growth engine going forward for Leapmotor.

Zhu Jiangming: It is precisely because the domestic market is very dynamic, and the penetration rate is very fast, that in a few years, traditional fuel vehicles may no longer exist. Leapmotor's advantage lies in focus, not fighting on two fronts: overseas, we break through with partners, and we wholeheartedly focus on the domestic market.

Leapmotor aims to lead in the domestic market. The C series has already exceeded 30,000 units, with many models surpassing 10,000 units. The B series will be crucial, whether it can capture the 100-150,000 unit market, the most fiercely competitive and largest market share domestically, is very important for Leapmotor.

We have planned three models for the B series, based on the same platform, to be released in March, June, and December next year. We hope to gain a certain market share in this price range. We have absolute confidence in our products and positioning.

Question: What are the differences between this round of Chinese automakers entering Europe and when Japanese and Korean automakers entered Europe back then?

Zhu Jiangming: When Japanese and Korean automakers entered the European and American markets back then, it was a competition of homogenized products without revolutionary innovation. The difficulty of succeeding in the competition was high because everyone had the same engines, transmissions, and technologies. Moreover, others had larger scale and brand influence than you, so you needed to work twice as hard, like selling labor.

Today is like changing the track, where electrification and intelligence put everyone on the same starting line. Those skilled in these technologies have a greater probability of winning, which is an opportunity for Chinese automakers.

Question: What are Leapmotor's advantages in going global?

Zhu Jiangming: We chose to cooperate with Stellantis to create a new model, which is more advanced than the cooperation model between Volkswagen, Toyota, and Chinese automakers in the past. It does not have as many dealer channels and service systems, and what we are pioneering in cooperation is a reverse cooperation model Secondly, by leveraging the respective strengths of both parties, LEAPMOTOR has technological and cost advantages. The idea is to produce good but affordable products. With enhanced product competitiveness, utilizing Stellantis' existing channels (over 100,000 outlets), services, and global parts distribution system (parts can be delivered to Europe three times a day) can accelerate the improvement of user experience.

Cooperating with Stellantis is the fastest and least costly way. Because if you were to establish your own service system, parts distribution system, dealer network, and future financial and insurance systems for financing, you would encounter many obstacles. This is a shortcut.

Cars cannot do without services and maintenance, something that other Chinese car companies going global cannot achieve. By the end of the year, there will be 300 stores across Europe. It is impossible for other companies to achieve this level of localization in marketing on their own, presenting an opportunity for LEAPMOTOR to go global. As our user base and reputation grow, sales will also increase, and during this process, benefits will certainly be shared.

The cooperation between LEAPMOTOR and Stellantis, whether in terms of the value Stellantis has invested in LEAPMOTOR, the progress of the joint venture international company of LEAPMOTOR, or the achievements made so far, has exceeded everyone's expectations. I believe that our cooperation with Stellantis will only get better.

Question: When did LEAPMOTOR decide to go international, and what are the challenges that need to be overcome?

Zhu Jiangming: We started looking for overseas partners in 2022 and after considering many options, we ultimately chose Stellantis. Throughout this process, there was natural coordination, and we finally decided to jointly invest in selling the LEAPMOTOR brand overseas. The current difficulties lie in the high EU tariffs and expensive shipping costs, so we must localize our operations. Otherwise, if a car costs 100,000 units, with tariffs and shipping costs totaling 10,000 units, what profit is left after deducting 20,000 units?

We have started selling the T03 and C10 in Europe and globally, taking into account the EU tariffs. Therefore, pricing may have to sacrifice a lot of profit.

Question: Cost control is an advantage for domestic electric vehicles. Can we still ensure this when entering overseas markets?

Zhu Jiangming: Costs will definitely increase somewhat, but overall, it is more cost-effective than tariffs and shipping costs. We have considered cost reduction in the design phase and also in managing costs. For LEAPMOTOR, cost control remains unchanged.

Cao Li: We will be listed in the UK this year, with stores already in the preparation process and products coming soon. Apart from complete vehicles, we also hope to leverage our parts advantage and sell to more OEMs. In the next two weeks, we will start engaging with various brands under the Stellantis group in Europe, including joint tuning and styling reviews for our products, as well as discussions with our key European suppliers.

Question: Why choose the C10 and T03 to test the waters in Europe, and what type of consumer group is in Europe?

Zhu Jiangming: Europeans prefer lightweight small cars, which is why we chose LEAPMOTOR's smallest model, the T03. The C10, on the other hand, is the largest car locally and serves to shape the brand's image, demonstrating LEAPMOTOR's capabilities. The C10 competes with all the intelligent functions of Tesla, the largest electric car brand in Europe, followed by the Volkswagen ID4 In China, our car models range from A00, A0, A, to B. T03 is in the A00 category, while C10 is in the B category. In the future, we will introduce 1-2 new models each year to fill in the gaps in between, covering everything from SUVs to crossovers.

Question: Stellantis also has products similar to LEAPMOTOR's current lineup. When collaborating, was the potential for internal competition considered?

Cao Li: Stellantis has 14 brands but only 4 vehicle platforms. Therefore, they have done a great job in terms of the technology and shared components behind all their models. While some overlap is inevitable, the biggest difference lies in brand positioning and characteristics. Users still pay attention to brand differences and feature configurations. LEAPMOTOR has its own style, so the competitive nature between the two is not significant.

Question: How does LEAPMOTOR consider localization issues?

Cao Li: In the joint venture company, there will be a product team from LEAPMOTOR stationed there. During the product planning phase, they will look at user needs in different markets globally. Therefore, this is actually a team effort on a global scale. The research and analysis of these users are comprehensive because we are looking at our entire architecture and platform-based product development in a holistic manner for the future.

Zhu Jiangming: For intelligent driving, the more developed a country's infrastructure is, the better. Comparatively, the US, Europe, and China are better off, while Southeast Asia, for example, lacks even lane markings, with cars, motorcycles, and pedestrians mixed together. From a sales volume investment perspective, it is not cost-effective. Therefore, localization is a gradual process.

Question: How does LEAPMOTOR balance the domestic and overseas markets? Has the company firmly established itself in the domestic market? What measures will be taken in terms of capitalization and finance in the future?

Zhu Jiangming: As an automotive company, globalization is a must. The threshold is 4 million vehicles; otherwise, survival will be difficult.

We still hope to focus on making all products global models. From a positioning perspective, it's a global strategy. Apart from future large D-class cars, some products may be universal, such as A-class cars, which we will design based on global market demands. This way, we can achieve economies of scale and cost advantages. Tesla, for example, has dominated with three models, reaching nearly a million units annually. iPhone is similar. We must simplify complexity; this is the best approach.

Regarding the capital market, we also hope to rely less on financing. Making profits quickly is our goal.

Question: What are the core reasons behind LEAPMOTOR's rapid increase in sales this year?

Zhou Ying: From 0 to 30,000 units per month, LEAPMOTOR has undergone a transformation from quantity to quality. In terms of marketing, LEAPMOTOR doesn't have any particularly special tactics. However, fundamentally, each of our products has been very solidly established in their respective niche markets. For example, the C11 has been on the market for over three years, with a resale value second only to the Model Y, accumulating positive word of mouth from users. We have a very solid foundation, not relying on a few popular models surging at a certain time. We are taking the opposite path of becoming an internet sensation.

Zhu Jiangming: This year, in a very short period, our sales increased rapidly from 15,000 to 40,000 units, driven by LEAPMOTOR's core technology and good reputation, which complement each other Our C series has a median price of 150,000 RMB. For middle-class users, the decision to choose LEAPMOTOR is usually made after careful consideration, mainly due to the outstanding product quality. Everyone believes that buying LEAPMOTOR products offers great value for money, making it a worthwhile investment. This is why they are more likely to recommend LEAPMOTOR products, which is more effective than traditional advertising.

Our internationalization strategy aligns with our product positioning and overall strategy. Therefore, we follow a similar model overseas. The pricing of T03 and C10 models abroad is also very competitive, offering great value for money, as we aim to quickly achieve a certain scale globally.

Question: What will be the biggest challenge for LEAPMOTOR in the 30,000 to 50,000 RMB price range?

Zhu Jiangming: The biggest challenge will be achieving synchronized growth. We need to expand channels, production capacity, and management capabilities simultaneously. In this process, the biggest challenge lies in how to quickly replicate and attract more talent. Currently, LEAPMOTOR is experiencing a trend similar to BYD's growth after reaching several hundred thousand units, showing promising prospects for rapid growth.

We are constantly challenging ourselves. Next year's products must be even better than this year's, or else we risk being left behind as competitors catch up quickly. As long as we continue to innovate and revolutionize ourselves, we will not fear competition and will continue to grow amidst competition.

Question: Will LEAPMOTOR develop higher-end models in the future to compete in the 250,000 to 400,000 RMB market segment?

Cao Li: We currently have planned four series: A, B, C, and D. The D series is the highest-end model planned, priced between 200,000 to 300,000 RMB, and is set to be released in 2026