Leapmotor readies more value models as it clears profitability hurdle

The company claims it now has 550 dealerships in Europe – including over 50 in the UK and a target of 70 by the end of the year.

Neither Leapmotor nor Stellantis breaks out the profitability of the International arm. Li claimed the division is profitable but told investors that’s not the priority at this stage. “In the initial years, the most important job is to boost sales and enhance Leapmotor's global branding presence,” he said on the company’s first-half earnings call on 18 August.

The small but historically significant net profit of 30 million RMB (£3m) in the first half of 2025 came from a combination of its Chinese operations as well as a sizeable chunk (equivalent to around £20m-£30m) of carbon credits paid by Stellantis to allow it to hit emissions targets in Europe. Subsidises from the Chinese government also helped out, Li said.

Even though it was pushed over the profit line by non-traditional means, Leapmotor is doing a lot better than other start-ups like Nio, Xpeng and Zeekr, all of which are still languishing in the red. 

Leapmotor started later than its competition, launching its first car in 2019. In the first half of this year, however, Leapmotor sold 221,664 cars in total, up 156%, with another 50,000 added in July. This is well below China’s leader, BYD, at over two million but above Li Auto, which posted sales of 30,731 in July.

Profitability is even more impressive, given the company’s average selling price reached just 106,000 RMB (£11,000) in the first half, according to calculations from global investment bank Jefferies.The low price reflects the punishing competitiveness in the Chinese market but also the company’s value proposition. Leapmotor has a wider range of models on sale in China, including the new B01 saloon version of the upcoming hatchback and a larger C-badged saloon. 

Leapmotor's ability to make a profit from that low base reflects the fact that is vertically integrated, with 60% of the bill of materials cost coming from parts it makes itself, according to the company. Like BYD, Leapmotor produces its own batteries, which it packages into the chassis itself. 

The Hangzhou-based company, born out of electronics company Dahua Technology (known best for its surveillance cameras), has channelled that know-how into creating the Leap 3.5 electronic ‘software-defined’ architecture that it ports from car to car, which, it claims, reduces the development cycle of models on the platform by 25% and the overall investment by 40%.

The big question is whether Leapmotor can remain profitable after it moves some production of B-series vehicles to Europe next year (either the B10 SUV or B05 hatchback or both). The big cost saving will be on the tariffs that Leapmotor currently has to pay on European Union imports, both on EVs and its combustion-engined range-extender models. 

Moving away from China’s low-cost supply chain will increase bills but occupying existing Stellantis plants (reportedly in Spain) won’t cost too much, Li claimed. “Our overseas projects are mostly retrofit… on existing production lines. So the overall investment will be much smaller compared with greenfield projects,” he said.

Leapmotor’s low-cost, high-tech approach encompasses semi-autonomous driving and next year it claims it will be able to compete with the best thanks to improvements in lidar sensors, high-performance computer chips from Qualcomm and an ‘end-to-end’ algorithm figuring out where to place the car. As with all Chinese companies claiming leadership in this space, it’s hard to know who is actually ahead and how much the driver really can just sit back and watch as the car takes over.

This has even less relevance in the UK, where hands-free technology is tightly regulated and a new system of driver assistance is needed. As for the wider tech, one of the first customers to take delivery of the cheap-deal C10 SUVs posted on the PistonHeads forum deal thread that, after a week and 400 miles, he was "pleasantly surprised" by the experience despite the car missing out on Apple CarPlay.

The fact that Leapmotor can sell electric cars of decent quality both cheaply and – now - profitably bodes well for customers, dealers and especially for Stellantis, which gets to study how it’s done and potentially borrow some of the tech for itself.