Leapmotor (零跑) has turned a profit — what next?

Profit milestone, but margin is thin

Leapmotor (零跑) reported its strongest year since founding: 596,555 vehicles delivered in 2025, revenue of RMB 647.3亿元 (about RMB 64.7 billion, roughly USD 9.0 billion), a full-year gross margin of 14.5% and the company’s first annual net profit of RMB 5.4亿元 (≈ USD 760 million). Fourth-quarter gross margin hit 15%, the target CEO Zhu Jiangming (朱江明) had publicly set. The scale gain is real — Leapmotor says it was the only new-entrant EV maker to top 70,000 monthly deliveries in 2025, reportedly — but the per-car economics remain strikingly slim: about RMB 900 (roughly USD 125) net profit per vehicle.

Growth by volume and low-price strategy

Leapmotor’s expansion has been fuelled by volume-focused, value-priced models across its B and C series in the RMB 100,000–200,000 band — the largest segment by sales in China, accounting for 43.4% of the market in 2025. CEO Zhu has argued the company’s low prices stem from "tech-driven cost efficiency" — it has been reported that he rejects the “cheap” label and frames Leapmotor as a mass-quality brand. The company is rolling out A- and D-series models to cover sub-RMB100,000 and RMB200,000–300,000 bands in 2026 as it pursues a four-series, dozen-plus model strategy to blanket mainstream price tiers.

Conservative R&D, rising selling costs

Leapmotor’s cost discipline helped it post a positive bottom line, but the balance sheet shows trade-offs. R&D spending in 2025 was RMB 42.9亿元 (≈ RMB 4.29 billion), a much lower share of revenue than peers such as NIO (蔚来, 106.1亿元) and Li Auto (理想, 113亿元). It has been reported that Zhu rarely foregrounds frontier technologies such as in-house compute or advanced driver assistance; the company says it follows proven tech rather than pushing unproven bets. Meanwhile Q4 selling expenses (RMB 12.9亿元) exceeded R&D (RMB 11.9亿元) for the first time, suggesting marketing and distribution costs are rising as Leapmotor scales.

Valuation disconnect and the question ahead

Despite topping the new-energy vehicle sales ladder among Chinese start-ups, Leapmotor’s market value — about RMB 633.6亿元 (≈ USD 8.8–9.0 billion) — trails peers and its stock has underperformed year-to-date. It has been reported that some observers attribute this valuation gap to Leapmotor’s conservative tech posture, heavy manufacturing profile and doubts about sustainable margin expansion. Can Leapmotor convert volume leadership into durable, higher-return growth — by lifting per-car margins, defending against margin erosion from rising sales expense, or stepping up distinctive R&D — or will it remain a low-margin volume player? The answer will determine whether profitability is a one-off milestone or the start of a new chapter.