LEAPMOTOR aims to share the market with giants

Author | Chai Xuchen

Editor | Zhou Zhiyu

No one could have imagined that the once obscure Leapmotor would rise to the throne of new forces.

On December 28, Leapmotor launched its first large SUV, the Leapmotor D19, and its first MPV, the Leapmotor D99, both flagship models; with sales expected to approach 600,000 units by 2025, it is close to achieving annual profitability. This marks the tenth anniversary of Leapmotor's establishment and serves as a watershed moment for its transformation.

Leapmotor Chairman Zhu Jiangming has thrown down a new gauntlet: no longer being a "new force," aiming for 1 million sales next year, with a long-term goal of reaching a global scale of 4 million, intending to share the world with the remaining giants.

It seems that everyone is seeing the emergence of the second "BYD" in China. The reason this challenger has successfully reached the top is largely due to its technological foundation.

Originating from the security industry and inheriting the pragmatic gene of engineer culture, Leapmotor has carved out a niche in the rapidly evolving new energy vehicle market through self-research, and is regarded as another new "dragon" emerging from the Hangzhou tech circle.

In a recent internal letter, Zhu Jiangming reflected, "We have proven that comprehensive self-research is not just a slogan. With this systematic capability, we can quickly achieve mass production of core technologies such as the LEAP3.5 central domain controller, 800V high-voltage platform, OneBox chassis braking system, and advanced driver assistance systems this year."

Having tasted success and validated its approach, Leapmotor plans to accelerate its efforts, aiming to increase the proportion of self-researched components from 65% to 80%. In addition to the three electric systems, intelligent controllers, cockpit, optics, ADAS, electric drive, and thermal management, Leapmotor Senior Vice President Cao Li revealed to Wall Street Insights that they will also invest in high value-added or high-tech threshold products in the future.

Internally, Leapmotor believes that its high self-research ratio provides it with a platform moat in a volatile market.

This is just part of what the outside world can see. Leapmotor's ability to quickly pivot in competition, rapidly entering the extended range craze in the early years and accelerating its catch-up at key moments in intelligent driving, is due to its flat organizational structure and management model, which is quite similar to that of tech startups.

Cao Li disclosed, "Zhu Jiangming can reach specific engineers within 3 to 4 levels down, and the decision-making cycle is very fast. He prefers to have problems explained clearly in one or two sentences."

By applying the strengths of tech companies to the automotive market, Zhu Jiangming has gained recognition from "old money." A year ago, Stellantis extended an olive branch, and on December 29 of this year, FAW announced its investment in Leapmotor, acquiring a 5% stake for 3.74 billion yuan.

Thus, Leapmotor has completed the construction of a "state-owned + foreign capital (Stellantis) + founding team" iron triangle. With this confidence, Leapmotor's vision has shifted beyond the "new force" framework to a broader global competitive landscape.

Zhu Jiangming predicts that the ultimate outcome of the automotive industry will replicate the oligopoly structure of the 3C mobile phone industry: the top ten car companies will occupy a scale of 4 million units. To remain in the game, Leapmotor must enter this "4 million club." It's easy to shout slogans, but achieving them in a market filled with competitors is not an easy task.

"In the past decade, we have faced great difficulties, and it can be said that we have survived through nine lives. Now we have just crossed the basic living standard, and it is far from the time to celebrate," Zhu Jiangming frankly stated that they are still in a very competitive phase, and being number one at this stage does not mean much. Companies like Nio, Li Auto, and WM Motor have all been number one before.

Cao Li pointed out that to achieve the next goal, it is not only necessary to look at product competitiveness, but also whether delivery and market launch rhythms can match, and whether market deployment and store efficiency can support it. Additionally, it is important to consider whether the target audience is sufficient, what cards competitors will play, and whether Leapmotor's products can withstand the pressure.

Even though Zhu Jiangming predicts that the industry will enter a winter in the first quarter of next year, making it "very difficult" to achieve goals, he still chooses to take a proactive approach. The current achievements give him confidence—Leapmotor has ranked sixth or seventh in the entire automotive market, including traditional car manufacturers, and plans to advance 1-2 positions each year.

Cao Li mentioned that the monthly sales have already reached a peak of 70,000 units, and if this serves as a foundation, there will be 4-5 new models next year, which will ensure a more definite growth rate. Beyond just products, Leapmotor is also launching two new campaigns: brand elevation and global expansion.

Currently, Leapmotor is targeting the 250,000-300,000 yuan range with its D series models, attempting to compete with luxury cars priced between 500,000-1,000,000 yuan with "value-for-money" product strength; meanwhile, overseas, Leapmotor's strategy of leveraging partnerships has shown significant results.

With the global network of Stellantis, Leapmotor has established over 700 overseas stores, becoming the top new force in overseas sales this year. This is not just about selling cars, but also about global supply chain integration—Leapmotor plans to utilize Stellantis's resources for localized manufacturing in Europe and other regions to further reduce costs.

From a blank slate ten years ago to now being a giant in the industry with a market value of hundreds of billions and holding both state-owned and foreign capital advantages, Leapmotor has carved out a unique "Hangzhou path."

In this technological highland of Hangzhou, Leapmotor is embodying the survival rules of hard tech companies as the "seventh dragon." It does not engage in extravagant marketing but focuses on precise calculations of technology ROI; it rejects blind expansion and builds solid defenses through alliances with FAW and Stellantis.

On the road to achieving 4 million vehicles, this "little dragon" emerging from Hangzhou is attempting to navigate through cycles and complete its transformation from a Chinese new force to a world-class car manufacturer.

Below is the transcript of the dialogue with Zhu Jiangming, Chairman and CEO of Leapmotor Technology, Xu Jun, Senior Vice President and COO, Cao Li, Senior Vice President, Zhou Hongtao, Senior Vice President, Song Yining, Vice President, Shu Chunchen, Vice President, and Li Tengfei, Vice President:

Question: How will Leapmotor become a world-class car manufacturer in the next decade?

Zhu Jiangming: The current top ten companies are basically achieving around 4 million vehicles, and Leapmotor's goal for the next decade is also aimed at this scale. Currently, there are already one or two companies in China that have entered this category. In the future, if there are 10 companies in China that achieve over 4 million vehicles, the outcome should be very similar to the current 3C mobile phone industry, with China accounting for 50%-60% of the market share Question: How can we get consumers to accept an expensive Leapmotor starting from platform D?

Cao Li: Leapmotor can no longer consider itself a new force; we want to become a global world-class car manufacturer, and Leapmotor will have its own characteristics. Whether it's the ABC or D series, we always adhere to the principle of "cost-based pricing." Although the D series is a flagship model priced between 250,000 to 300,000 yuan, which is higher than previous Leapmotor ABC models, its quality and value can definitely compete with models priced between 500,000 to 1,000,000 yuan, making it absolutely worth the price.

Question: What is Leapmotor's view on AI?

Zhu Jiangming: The Internet of Things, AI, the four little dragons, and robotics are all rapidly changing hot topics. In the past 10-20 years, when these new technologies were finally implemented, the results were not very good. Initially, it was more of a hype.

We believe that embodied intelligence and robotics should first be implemented in factories and solve practical problems. From Leapmotor's perspective, the investment in these devices should reduce the number of workers and achieve a return on investment within three years; this is the standard Leapmotor uses to measure, rather than blindly following trends. Currently, Leapmotor has a three-year timeline; if we cannot recoup the investment within three years, we will not pursue automation. Leapmotor has always maintained a pragmatic attitude towards all investments, including autonomous driving.

Zhou Hongtao: In the early stages, we were always in a following position regarding autonomous driving, but in the past two years, it has developed very quickly. Last year, the industry level was only a few kilometers, or good cases were taking over every ten kilometers, but this year, in China's relatively complex environment, we can achieve takeovers every 100 kilometers or more. L3 is already visible in the future, and we will increase our investment in the coming years to catch up; this is our development strategy.

Question: If Leapmotor talks about "luxury" in the future, how will that differ in terms of channels?

Xu Jun: This is a question that all of us at Leapmotor need to think about: "luxury." We still return to user experience because user experience is the core of our entire company. The "luxury" we define is at the experiential level, creating consumer touchpoints throughout the process, allowing consumers to feel what Leapmotor defines as luxury through product experience, which will bring new requirements for channels.

Not every channel partner can meet the MOT journey we design for consumers; only those dealers and channels that meet this standard will be allowed to provide services for D products to consumers. Of course, this is a progressive process. Therefore, we will classify and tier all existing channels and certify dealers according to the "luxury journey" standards.

Question: What is the core difference between new forces and world-class enterprises?

Zhu Jiangming: I think the so-called new forces in car manufacturing refer to those who have joined the automotive manufacturing industry in the past decade. Newcomers are more like a blank slate, which allows for more flexibility, but the downside is that they lack experience and may take some detours.

I believe that at this stage, these new forces in car manufacturing have actually become less new after ten years of honing, and everyone has accumulated experience in various aspects. Today, we need to look at the overall automotive market and the global automotive landscape to grow better; we even need to combine the rankings of fuel vehicles and electric vehicles to see how high we can rank This year, we rank sixth or seventh among all automakers as a group, including traditional automakers and new forces, and we hope to advance 1-2 positions every year, continuously placing ourselves in a better position.

Q: You officially signed a contract with FAW yesterday. What will this signing bring to Leapmotor?

Li Tengfei: FAW's investment in Leapmotor brings recognition from state-owned enterprises and the national level for Leapmotor's ten years of effort, and it is also the first time a state-owned enterprise has invested in a new force automotive company.

From a brand perspective, FAW, as the first traditional automobile manufacturer in China, has undeniable brand recognition. FAW's investment in Leapmotor can significantly enhance Leapmotor's brand awareness in the Chinese market. This includes strengthening user trust and confidence in Leapmotor.

Complementary advantages. Although Leapmotor currently has certain advantages in core technologies related to the three electric systems and new energy development, FAW, as a traditional OEM, has corresponding advantages in manufacturing, production capacity, and national policy guidance. I believe there are very good opportunities for complementary advantages between both parties.

From the perspective of Leapmotor's core technology and communication, both sides have the opportunity for in-depth technical exchanges. FAW also has the intention to procure core components from Leapmotor. As everyone knows, the Hongqi G117 model has already achieved cooperation. FAW's core engine products will also better support Leapmotor.

FAW's strategic investment in Leapmotor, combined with the strategic shareholder Stellantis, forms a stable equity structure and equity triangle with our controlling team, which can better support Leapmotor's future development.

Q: Is starting with the end in mind your requirement for the entire executive team?

Zhu Jiangming: First of all, we must clearly understand what the ultimate goal is. At least, going through some small twists and turns along the way won't lead to major mistakes, and we can reach the finish line. All our designs revolve around Leapmotor becoming a world-class automaker; we have always set this goal. Around this goal, we will plan how to achieve it in stages. Similarly, we indeed require each department of the executive team to have clearer end-to-end responsibilities and rights. Leapmotor's efficiency comes from clear division of labor, with responsibilities and rights being equal. Each of our product lines operates end-to-end. From product planning, such as electric drive, batteries, and electronics, starting from product planning to R&D, engineering, manufacturing, delivery, quality, and service, we use a mechanism with clearer end-to-end responsibilities and rights, rather than a completely matrix-style approach. This may be more effective than a seemingly beautiful matrix structure.

Q: Will FAW's equity ratio continue to increase in the future?

Zhu Jiangming: We have always emphasized that we need to maintain the control rights of the founding team, which will not change. After all, there needs to be a leading party to manage the company. Indeed, we have our founding team, as well as fixed shareholders like Stellantis and FAW, which is very good for the stability of Leapmotor.

This framework also provides better protection for all shareholders. After all, having large shareholders enhances the ability to withstand risks. The new energy vehicle sector will not be smooth sailing in the coming years; there are still certain risks. With the support and backing of these large shareholders, as well as cooperation at the strategic, product, and component levels Li Tengfei: At the beginning of our cooperation, the other party clearly stated that they do not seek to hold a controlling stake, as they deeply understand that only under the leadership of General Zhu can Leapmotor develop better. Moreover, in our investment agreements with FAW and Stellantis, there are clear provisions regarding the equity ratio to ensure the actual control position of the company's controlling team.

Question: What is the timeline for the second million?

Zhu Jiangming: On November 15, we announced the goal of achieving 1 million sales by 2026, which is indeed very challenging. Everyone agrees that starting from the first quarter of next year, the entire automotive industry will be very cold, but we still hope to strive to achieve the promised goal.

Question: Will Leapmotor share relevant platform experience or technology with the industry in the future?

Li Tengfei: The powertrain company under the FAW team is collaborating with us this time, mainly focusing on future plug-in hybrid models, including some range-extended models. As everyone knows, Leapmotor does not develop traditional powertrains.

Regarding whether Leapmotor will share with the industry, from a strategic perspective, we are a complete vehicle company, focusing more on our main business, and ensuring that our Leapmotor brand, including future new species, is well developed. We do not prioritize technology output or such profits as our main line; we believe that having these two important partners in this business is basically sufficient.

Question: Besides the management's increase in holdings, what specific measures will be taken to guide market perception?

Zhu Jiangming: In fact, the true value of Leapmotor is not aligned with the stock price at certain stages this year, and there is still a lot of room for growth, which is why we are investing more money to increase our holdings, rather than trying to save the market. The value of Leapmotor is definitely greater than the stock price at that time. From the current price perspective, Leapmotor's valuation is still relatively low.

Li Tengfei: As you can see, Leapmotor's stock price was only around 30 to 40 yuan at the beginning of 2025, with a market capitalization of 50 billion. By 2025, it broke through 100 billion at its peak. Of course, in the fourth quarter, with the overall industry sector's adjustment and the market's correction, the stock price has slightly adjusted. Many people have given us a lot of suggestions for market value management, but this is not the measure we will take next.

Question: How will you strengthen Leapmotor's engineering culture in the future?

Zhu Jiangming: In fact, I believe that 70% of the technology in new energy vehicles is dominated by electronics, electric control, and intelligent driving, which account for a large proportion. In contrast, traditional specialties are relatively mature and easier to find talent for. For example, chassis, suspension, and body have not changed much; this industry is already relatively complete.

We are starting from scratch. The core technology of electric vehicles has matured and developed over ten years, and we are taking advantage of this opportunity to invest relatively more in this area.

Our model is different from others; traditional OEMs produce SOR themselves, where others do the work, and they set specifications, rules, and acceptance criteria, so it is difficult to turn around and get involved in detailed design. Leapmotor's characteristic is that these core parts are all developed and manufactured by ourselves, which is an important reason why we are relatively successful At the same time, the benefit of doing this is that we can platformize. Now with two boxes, we can produce 600,000 vehicles; one box is high configuration, 8295 + 8650, and the other is low configuration, 8155, which fully covers everything. This complete platformization allows us to cover so many models, which is our advantage.

Q: After ten years of entrepreneurship, has there been any significant change in your understanding and views on products and the market?

Zhu Jiangming: In fact, when we started our business, we knew nothing about the market. Looking back now, the speed of development of new energy vehicles has exceeded everyone's expectations. It is now close to 60% or even over 60%, and there has been a significant increase in market share compared to last year.

I believe that the market in China should be very fast in terms of the popularization of new energy, so Leapmotor must accelerate its pace in these years and hope to quickly increase market share.

Q: The joint venture factory between Leapmotor and Zhongchuang Xinhang will be established next year. What are the plans regarding batteries?

Song Yining: Indeed, 1 million vehicles require a large demand for batteries. However, since 2019, we have been using three standard cell sizes to cover all models. This year's 600,000 vehicles also use these three cell types.

For example, CATL, AVIC Lithium Battery, and Guoxuan High-Tech, each of these three cell types has the same capacity and size. What are the benefits for me? Because I only buy the cells, I do the modules, packs, and BMS myself. If one supplier is short on quantity, I can switch to another, so we have done the best in the industry in terms of cell standardization.

We do have external sourcing, as well as our own joint venture company. We will start mass production ourselves around July-August 2026, with the same cell models, sizes, and capacities, but we will deploy them across different models.

Currently, after our own production, it still accounts for less than 50%. We have planned for 1 million units, and since September this year, we have been stocking resources at a rate of 1.2-1.3 times. Because after standardization among several cell manufacturers, each type of product will have more than three production lines, so the resources are still very sufficient, and there will be no problems by 2026.

Q: Have the changes in the industry this year exceeded expectations, and do you have updated supply chain preparations for next year?

Song Yining: Through the price increase of battery materials in 2022, the entire battery supply chain in China has prepared a lot over the past couple of years. The entire capacity layout, including raw materials, far exceeds the current demand. For the entire lithium battery market in China, regardless of how energy storage and power develop, the total amount is sufficient and will not be lacking.

This year, for Leapmotor, one of our models exceeded the expected volume between April and June. We initially prepared 8,000 units, but sold 15,000. There was just a short-term uneven distribution in cell allocation. However, we are very fast; after standardization, we resolved this issue within 30 days, from April to May.

As for next year, we have a reserve of 1.2-1.3 times the cell resources, so there will definitely be no problems next year.

Q: What are the results of going overseas and the subsequent plans? Xu Jun: In less than three months, we have delivered over 300 units in Hong Kong, which represents that our products have already undergone rigorous testing by the citizens of Hong Kong. This result has indeed been fully validated in overseas markets, and we are currently the top-selling new force in the overseas market this year.

Cao Li: There are already over 700 stores overseas. Additionally, in terms of the supply chain, this is closely related to localized manufacturing. Because Stellantis, in addition to localized manufacturing resources, has very rich global procurement and supply chain resources, we will also utilize these supply chain resources. The self-developed components manufactured by Leapmotor can also be sold externally. Some of its advantageous supply chain resources can be integrated, and we can also take advantage of localized manufacturing opportunities to procure components in Europe or other regions. This is a resource integration of advantages for both parties, and we can quickly see the benefits just like other brands going overseas.

Question: How to reduce costs in the supply chain?

Shu Chun Cheng: Leapmotor still adheres to a technology-driven cost reduction model. Secondly, it involves scaling, including platformization and generalization, which achieves cost reduction through scale. Thirdly, Leapmotor's core components are all self-developed.

The most important point is negotiating with suppliers. Leapmotor insists on cost analysis to determine what a reasonable cost is, and based on this principle, we negotiate with suppliers. We hope to advocate the concept of "good but not expensive" together with our partners, deeply integrating this idea into every component cooperation area, similar to a low-margin, high-volume strategy