Zhu Jiangming of Leapmotor is approaching the "Million Club"

Fast Reading

• Since last year, the monthly sales of each model launched by Leapmotor have never fallen below 10,000 units.
• This year, Leapmotor has completed its annual target of 500,000 units ahead of schedule, and its goal for next year is to achieve annual sales of one million units.
• Zhu Jiangming predicts that the overall automobile sales volume next year will still be slightly higher than this year, and the market share of new energy vehicles will also steadily increase by 5% - 10%.

On the eve of Leapmotor's tenth birthday, its leader Zhu Jiangming set a goal: to double the sales volume and sell one million vehicles in 2026.

In the automobile industry, there are two common ways to measure membership in the "Million-Unit Club": one is to have cumulative total vehicle sales exceed one million, and the other is to have annual sales exceed one million. The "Million-Unit Club" that Zhu Jiangming wants to enter is the latter.

Annual sales of one million units are a sign that an automobile company has become a mainstream player in the market and an industry giant, indicating that the brand enjoys a high level of market recognition and a wide user base. Moreover, large sales volumes can spread the costs of various aspects such as R & D, production, and the supply chain, enabling the enterprise to have stronger cost control capabilities and pricing flexibility, and ensuring a more stable profit margin.

The system that can support annual sales of one million units is a huge and complex project, which in itself is a very high competitive barrier. SAIC Group, FAW-Volkswagen, Geely, and BYD are all members of the "Million-Unit Club". Among Chinese new - force automobile companies, annual sales of one million units are still an "uncharted territory" that no one has ventured into.

On November 15th, Leapmotor completed its annual sales target of 500,000 units ahead of schedule, doubling last year's 250,000 units.

In Zhu Jiangming's view, this result was expected. "This year's sales are actually based on the foundation laid last year. By December last year, the whole team was already confident of victory." On the evening of November 27th, Zhu Jiangming, the founder and chairman of Leapmotor, said during a group interview with the media in Hangzhou.

He said that from standard - equipped lidar and assisted driving to long - range and high - voltage fast charging, Leapmotor's sales achievements are due to its early planning in product strategy and finding opportunities. "Since last year, the monthly sales of each model launched have never fallen below 10,000 units."

By next year, Leapmotor will have a complete layout of its A, B, C, and D model matrix, and four new models will be launched. "It is very much worth looking forward to achieving the goal of one million units," said Zhu Jiangming.

Financial report data shows that in the third quarter of this year, Leapmotor ranked first among new - force automobile companies with sales of 173,852 units. Its revenue increased by 97.3% year - on - year to 19.45 billion yuan, its gross profit margin increased by 6.4 percentage points year - on - year to 14.5%, and its net profit was 150 million yuan.

Zhu Jiangming revealed that Leapmotor self - develops and self - manufactures 65% of its core components. Therefore, although it has achieved a 14% gross profit margin, it is equivalent to giving the gross profit of the components to users, making the products more competitive. Leapmotor has built a new component manufacturing base in Huzhou, with the plan to achieve self - development and self - manufacturing of 80% or more of its core components.

Leapmotor vehicles, which cover the price range from 60,000 to 300,000 yuan, have always adhered to the principle of "controllable costs and reasonable gross profit". Zhu Jiangming said that even for vehicles with high configurations and high prices, Leapmotor still adheres to the principle of being good but not expensive. "This is Leapmotor's differentiation, a different characteristic from other brands."

Good but not expensive - this brand concept, which seems neither distinct nor even a bit plain, has enabled Leapmotor to grow from an unknown "small player" in its early days to a dark horse that cannot be ignored in the new energy vehicle market.

On the day when Zhu Jiangming was interviewed by the group, Leapmotor's newly launched sports coupe, the Lafa5, was officially launched.

This time, Leapmotor is targeting young people. The Lafa5 features a young and personalized style. The new car is available in two range versions of 515 kilometers and 605 kilometers, with a total of five models. The limited - time price before the end of this year is from 92,800 to 116,800 yuan.

This price is 15,000 yuan lower than the pre - sale price, and a series of preferential benefits can be stacked.

Zhu Jiangming revealed that during the pre - sale press conference, the outside world thought the Lafa5 was overpriced. In fact, the cost of this car is very high. Not only has the interior material been upgraded compared to the B - series cars, but it also comes with high - level intelligent assisted driving functions.

In order to improve user satisfaction, Leapmotor's internal team had repeated discussions and decided to sacrifice some profits. "We have done our best to show further sincerity on the basis of cost - based pricing, which is why we have the price announced today."

Cao Li, the senior vice - president of Leapmotor, added that the company does not focus on the profit of a single model but aims to make the entire product portfolio achieve a profit level of 14% - 15% to ensure positive development.

In other words, the Lafa5, which tries to appeal to young people with labels such as fashion, trendiness, and individuality, is still in line with Leapmotor's DNA and is a mass - market model aiming for high sales volume.

The Lafa5 has the best pre - sale data among all Leapmotor models. Zhu Jiangming revealed that within half an hour of the Lafa5's launch, the number of new orders exceeded 3,000, and the goal is to achieve monthly sales of over 10,000 units.

Zhu Jiangming predicts that the overall automobile sales volume next year will still be slightly higher than this year, and the market share of new energy vehicles will also steadily increase by 5% - 10%.

The following is an excerpt (edited) from the dialogue between Leapmotor's management and institutions such as Snow Leopard Finance Society:

Q: Under what circumstances did Leapmotor decide to develop a "hot hatch"?

Cao Li: When observing the age composition and car - buying preferences of users, we found that users are getting younger and have stronger purchasing power. Especially, users in the 25 - 30 age group have an increasing demand for personalized models that can please themselves.

In the 100,000 - 150,000 yuan price range, there is no new energy or intelligent product that can meet the needs of this group of users. The market needs such a model. Many friends have asked what the competing models of the Lafa5 are. In the 100,000 - 150,000 yuan price range, it has no competitors, and it is still a relatively untapped market.

Q: Is the Lafa5 just a single model or a new product series? Will there be new concepts such as pure - electric sports cars?

Cao Li: The Lafa is a younger and more personalized product developed on top of the A, B, C, and D series. It is not a niche product but adds some personalized and sporty styles on the basis of daily use. The Lafa5 is just the beginning and an attempt. If it is successful, we will explore the launch of a series of other products that are more sporty, personalized, or have more emotional value and are more fun.

Q: Leapmotor adheres to cost - based pricing. With the Lafa5 equipped with high - level intelligent assisted driving and global development, will the cost pressure lead to a decline in the gross profit margin?

Zhu Jiangming: During the pre - sale press conference, some voices thought the Lafa5 was overpriced, but its cost is actually very high. Many improvements have been made in terms of configuration, interior materials, and design compared to the B - series.

In order to improve the satisfaction of users who love the Lafa, our internal team had repeated discussions and sacrificed our own profits. We have done our best to show further sincerity on the basis of Leapmotor's consistent cost - based pricing, which is why we have the price announced today. We must make it a high - volume model.

Q: Is it about making friends rather than making money?

Cao Li: Whether to make money or not cannot be judged by the profit of a single model. We still adhere to the principle that the entire product portfolio of the company can achieve a gross profit level of 14% - 15%. The Lafa5 may sacrifice a little profit margin, but we ensure that while the product is competitive, the entire product portfolio has a good gross profit level to ensure the company's positive development.

Zhu Jiangming: Let me add. Leapmotor conducts full - scale self - development. We self - develop and self - manufacture 65% of our core components, and their gross profit is 10%. Although Leapmotor seems to have achieved a gross profit margin of 14% or 15%, we have given the gross profit margin of the components to users to make the product price more competitive.

Q: How would you summarize Leapmotor's performance this year? What is the confidence and what are the challenges behind the goal of one million sales in 2026?

Zhu Jiangming: Completing the sales target of 500,000 units in mid - November was expected. When we set the target last year, we knew we would achieve it in November this year. Around November 15th last year, we also completed the sales target of 250,000 units.

This year, we announced the goal of one million units for next year. Where will the sales come from? I think it depends on the continued growth of the existing market. The C11, C10, and C16 in the C - series have all sold well this year. The B - series and the Lafa5 will bring incremental sales. The first model of the A - series unveiled at the Guangzhou Auto Show has also received a very good response. The D19, launched on October 16th, has the highest pre - order volume, which is completely unexpected.

Next year, all four series of A, B, C, and D will be available, and four new models will be launched. It is very much worth looking forward to achieving the sales target of one million units.

Q: From Leapmotor's first coupe, the S01, to the Lafa5, what has changed and what has remained the same for Leapmotor?

Zhu Jiangming: Leapmotor's capabilities have improved. The poor sales of the first model were both a good thing and a bad thing. The failure of the S01 gave us a lot of experience and lessons, which have contributed to Leapmotor's success today.

In terms of products, the positioning of the S01 was inaccurate, and its design was considered niche. Therefore, we regard product planning and product definition as very important matters and approach them with great caution, care, and seriousness. I believe that each model launched last year and this year, and the rhythm of product launches, have all been on the right track, and each has achieved monthly sales of over 10,000 units.

In terms of pricing, while others were selling cars at a loss of 30,000 - 50,000 yuan per unit, we were selling at a profit, but the pricing was wrong. The Chery Ant, which is also a two - seat car, sold well. If the S01 had been sold at the same price, it would have sold well too. It's a pity that I priced it too high. Our team originally didn't know how to operate in the to - C market, which was a problem of cognition and ability.

In terms of promotion and marketing, there was no market investment for the S01. A brand that was completely unknown spent seven or eight million yuan on a press conference at the Water Cube, and then there was nothing else. Naturally, the car didn't sell well. If we had a better understanding of the automobile market, I believe it would have sold better.

I believe that the Lafa5, which was launched today, will definitely be successful in terms of product design, configuration, positioning, and pricing strategy. Currently, its pre - order volume is better than previous models, and we hope it will become a best - seller.

Q: On the basis of self - developing and self - manufacturing 65% of core components, how much room is there for full - scale self - development?

Zhu Jiangming: We were originally focused on the three - electric systems. Our new positioning is to self - develop high - value - added components, that is, components worth more than 300 - 400 yuan. The newly built Huzhou component manufacturing base includes battery packs, electric drives, car lights, pre - controllers, compressors, and power supplies. In addition to the traditional three - electric systems, it also includes seats, bumpers, and compressors. There will be new components next year. Eventually, we aim to self - develop and self - manufacture 80% or a higher proportion of core components.

In terms of intelligent driving, the R & D team has expanded from more than 300 people last year to nearly 500 people this year. We are going all out, increasing investment, and getting closer to the level of the first - tier players through one - year's efforts.

Q: As the industry enters the decisive stage, compared with "NIO, XPeng, and Li Auto", is Leapmotor's label of "good but not expensive" a bit weak? Do you have any new plans to strengthen this label and make it more powerful?

Zhu Jiangming: Each brand has its own positioning. Leapmotor's positioning is to produce good but not expensive products and use its technological innovation capabilities to make each product perfect and good but not expensive. We have always been producing mass - market products and pricing based on cost, which has been consistent.

As for what products to produce, although Leapmotor is like the "Uniqlo of the automobile industry", Uniqlo rarely has products priced above 1,000 yuan, while Leapmotor covers the 60,000 - 300,000 yuan price range, allowing users to enjoy better products with the same amount of money.

Zhou Ying (Vice - President of Leapmotor): Leapmotor's characteristics are full - scale self - development and being good but not expensive, and we will not give up on this. Compared with competitors, it may not seem so extreme, but as we continuously prove this with each product, it becomes extreme. Leapmotor has achieved good results because we are very focused on this path and do not blindly follow market trends, which is a valuable characteristic.

Q: When the sales volume reaches one million next year, will you consider creating sub - brands?

Zhu Jiangming: We still adhere to the path of a single brand and will not target different high - end and low - end customer groups. I always think it was inappropriate for people to spend so much money on cars in the past. After all, a car is mainly made of steel plates and plastic. Why should one spend so much money on a car? I once bought a car worth two million yuan, and now I think it was really a waste of money.

People often say that when a company reaches a certain stage, it should create a brand, target the high - end market, and have a price premium. However, we still adhere to the principle of being good but not expensive, which is Leapmotor's brand characteristic and what makes it different from others. Some people like to wear famous brands, while others think practicality, good fabric, and comfort are more important.

Q: Does Leapmotor currently have an urgent need for financing? Is there a bottom line for ensuring the founding team's control over the company?

Zhu Jiangming: Leapmotor does not have an urgent need