Leapmotor Crosses Profitability Threshold, Targets 1 Million Annual Sales in 2026
Leapmotor Technology achieved a critical profitability milestone in the third quarter of 2025, posting its second consecutive quarterly profit as deliveries surged past 170,000 units. The Chinese electric vehicle maker now aims to sell 1 million vehicles and generate RMB 5 billion ($690 million) in net profit by 2026, marking an ambitious expansion from its current scale.
The Hangzhou-based automaker reported third-quarter revenue of RMB 19.45 billion ($2.7 billion), up 97.3% year-on-year, driven by deliveries that more than doubled to 173,900 vehicles. Gross margin improved to 14.5%, a 6.4 percentage-point increase from the previous year, reflecting gains from scale and cost optimization despite intensifying price competition across China's crowded EV market.
The company's improved financial performance stems from a maturing product portfolio and supply chain efficiencies. Monthly deliveries surpassed 60,000 units in September and 70,000 in October, propelling Leapmotor into mainstream competition after years of limited market attention.
With RMB 33.92 billion ($4.7 billion) in cash and financial assets as of September, Leapmotor is funding aggressive expansion in domestic channels and overseas markets while developing new vehicle platforms to sustain growth momentum.
Scale Effects Drive Margin Expansion
Leapmotor's third-quarter results underscore the importance of manufacturing scale in the capital-intensive EV industry. Cost of sales rose 83.6% year-on-year, below the delivery growth rate, indicating improved unit economics as fixed costs spread across higher volumes.
The margin improvement reflects a two-year effort to strengthen supply chain coordination, develop proprietary electric drivetrains and domain control architectures, and increase platform-based component sharing. These initiatives began yielding measurable benefits in 2025 as monthly production rates climbed.
The company increased research and development spending to RMB 1.21 billion ($167 million) in the third quarter, up more than 55% annually, to support team expansion and platform development for upcoming vehicle launches.
Product Portfolio Reaches Full Coverage
Leapmotor's revenue growth is supported by a diversified model lineup that reduces dependence on single bestsellers. The C10 SUV averaged 15,000 monthly deliveries in the third quarter, exceeding 20,000 units in October to set a brand record. Models including the B01, B10, C11, and C16 each maintained monthly sales above 10,000 units across different market segments.
The company plans to complete its ABCD platform matrix by 2026, spanning small urban vehicles to large premium models. The D19, a large sedan featuring high-capacity batteries, has already garnered pre-orders exceeding previous model launches at comparable stages. The upcoming A-series will target urban commuters in the small-car segment, expanding Leapmotor's addressable market.
Leapmotor expects to finish 2025 with over 600,000 deliveries, surpassing some joint-venture brands, after achieving its 500,000-unit annual target six weeks ahead of schedule. The retail network reached 866 sales outlets and 493 service centers across 292 cities by quarter-end, with plans to exceed 1,000 locations by year-end.
International Markets Provide Growth Runway
Overseas expansion is emerging as a significant growth driver. Leapmotor exported 17,400 vehicles in the third quarter, with October international orders jumping more than 100% sequentially to 12,000 units. Vice President Li Tengfei said November overseas orders are expected to surpass 15,000 units, with 2026 international sales targeted between 100,000 and 150,000 vehicles.
The company's value positioning is gaining traction in Europe, the Middle East, and Southeast Asia. Further scale increases, higher in-house component ratios, and supply chain expansion should enable continued cost reductions in materials and production, supporting the 2026 profit target.
Management's goal of 1 million annual sales, RMB 100 billion ($13.8 billion) in revenue, and RMB 5 billion in net profit for 2026 presents a steep challenge. Success depends on sustaining product launch momentum, navigating regulatory requirements in North America and Europe, maintaining supply chain efficiency, and continuing cost optimization while scaling operations.