A 200% stock surge makes Leapmotor China’s next EV rising star
The company has increased its 2025 sales target to 500,000 units, up from around 290,000 a year earlier, and is tipped to deliver its first annual profit
[HONG KONG] Zhejiang Leapmotor Technology, once a fringe player in China’s electric-vehicle (EV) industry, is beating all its startup rivals by sales and stock gains this year and analysts say there’s more to come.
The carmaker’s Hong Kong-listed shares have doubled since January, outpacing better-known peers XPeng and Xiaomi, and have surged more than 200 per cent from a low in August last year. The company has increased its 2025 sales target to 500,000 units, up from around 290,000 a year earlier, and is tipped to deliver its first annual profit.
Ten-year-old Leapmotor has won over investors by outcompeting its peers in price, principally by producing a large proportion of components in-house. A big driver behind that is the electronics and software background of co-founder Zhu Jiangming, who has helped drive the company’s R&D efforts.
“Leapmotor’s price competitiveness is remarkable, they are offering large vehicles at mass-market prices, thanks to roughly 70 per cent vertical integration,” said Xiao Feng, co-head of China industrial research at CLSA Hong Kong. “We see strong upside potential driven by a robust product cycle and exceptional capital efficiency.”
The company’s shares closed at HK$68.15 on Monday (Aug 18), up from last year’s low of HK$19.54 set in August. They are projected to climb to HK$74.89 in the next 12 months, based on a Bloomberg survey of analysts.
Leapmotor was established in Hangzhou in 2015 by Zhu and co-founder Fu Liquan, who together had previously set up security-camera manufacturer Dahua Technology. The automaker remained an underdog in its early years, with sales volumes trailing far behind those of industry giant BYD and also earlier startups such as Xpeng and Li Auto.
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A key to Leapmotor’s catch-up since then has been Zhu’s insistence that the company develop as many of its own electrical components as possible to keep costs down. That focus has seen the brand being described as a “more affordable Li Auto”, referring to the latter’s mid-range and premium SUVs.
By way of comparison, Leapmotor’s family-oriented C11 SUV, released in late 2020, retails for as little as 148,800 yuan (S$26,577). Li Auto’s cheapest vehicle, the L6 SUV, starts at 249,800 yuan.
“Leapmotor develops and manufactures almost everything in-house, apart from batteries, which gives it more control over costs,” said Rosalie Chen, an analyst at global research firm Third Bridge. “This kind of vertical integration gives Leapmotor a cost advantage over rivals who rely heavily on outside suppliers.”
The company’s mass-market positioning has been especially advantageous in recent years as China’s slowing economy has made car-buyers more cost-conscious. That tailwind helped Leapmotor increase monthly sales to more than 50,000 vehicles in July for the first time. While that still trails well behind BYD’s 344,296, it exceeds those of all its startup rivals.
Despite its current success, there’s no guarantee Leapmotor will be able to maintain its growth momentum.
“To reach the market capitalisation of more established Chinese EV peers, it must demonstrate scalability across more segments in the China EV space and move towards the one-million-unit inflection point, which many segment-focused EV makers struggle to cross,” said Gary Tan, a fund manager at Allspring Global Investments in Singapore.
Another challenge for Leapmotor is to ensure it can transition to long-term profitability.
The company is set to make progress towards that aim this year, with analysts forecasting it will report a profit of 558 million yuan for 2025, based on a Bloomberg survey. An update on its progress will come with its first-half results due later Monday.
One driver of future growth may be Leapmotor’s joint venture with European carmaker Stellantis, announced in late 2023. Under the partnership, Stellantis, which makes Chrysler, Fiat, Jeep and Peugeot cars, agreed to manufacture and sell some Leapmotor models outside China.
The strategy is a departure from the in-house approach that’s helped Leapmotor carve out domestic market share and contrasts with other Chinese automakers such as BYD, which is building its own factories in Hungary and Turkey. In theory, it may help Leapmotor develop its global presence more rapidly. The company exported 13,726 units overseas last year, about 5 per cent of its total sales.
“Export traction and software monetisation could serve as near-term catalysts, reinforcing Leapmotor’s transition from a domestic player to a scalable global EV brand,” Allspring Global’s Tan said.
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