Leapmotor has produced 1 million vehicles, but it hasn't crossed the line of death yet.

If we talk about the unlucky car companies recently, Leapmotor must be one of them.

On September 25th, just after Leapmotor had announced the great news of "producing 1 million complete vehicles" through major media outlets, it was reported on the same day that its founder, Zhu Jiangming, had become a "deadbeat".

Due to a contract dispute of its subsidiary, Leapmotor, as the parent company, was included in the "List of Dishonest Persons Subject to Enforcement" by the court on the grounds of "having the ability to perform but refusing to fulfill the obligations determined by the effective legal documents". Naturally, Zhu Jiangming, as the boss, became a "deadbeat" subject to restrictions on high - end consumption.

Just two days later, Leapmotor quickly resolved the contract dispute, and Zhu Jiangming regained his freedom from being a "deadbeat". However, this strong contrast of "celebrating success on one hand while having a 'deadbeat' boss on the other" not only created a dramatic effect but also drew more attention to the "hidden problems" behind this "quiet" sales champion among new - energy vehicle startups.

Leapmotor's path to becoming a king is far from as simple as people think.

The Counter - attack of the Underdog King

Since March this year, Leapmotor's sales have been on an upward trajectory.

In March, Leapmotor delivered 37,095 vehicles, winning the monthly sales championship among new - energy vehicle startups for the first time. In April, it first exceeded the monthly delivery mark of 40,000 vehicles, in July it exceeded 50,000 for the first time, and in September, it is expected to exceed 60,000...

In these seven months, Leapmotor has delivered approximately 338,000 vehicles in total. It has raised its sales guidance from 500,000 - 600,000 vehicles to 580,000 - 650,000 vehicles and has ranked first in monthly sales among new - energy vehicle startups for seven consecutive months, achieving a situation of "increasing volume, price, and profit": soaring sales, a record - high gross profit margin (14.1%), and turning a profit in the first half of the year.

However, the cruel reality is that even with such achievements, Leapmotor can't even be said to have "crossed the survival line". This judgment comes from Zhu Jiangming, the founder of Leapmotor, who just experienced a three - day "deadbeat experience".

After exceeding this year's sales target, Leapmotor immediately set a new "military order" for itself - to increase its sales volume by 53.8% from the expected 650,000 vehicles in 2025 and finally set the goal of "selling over one million vehicles a year".

One of the main reasons why Zhu Jiangming set such an ambitious goal is that he always believes that selling over one million vehicles a year is the "survival bottom line", and Leapmotor must achieve this; otherwise, it will "struggle to survive".

He believes that only car companies with annual sales of over one million vehicles can achieve stable profitability. Large car companies like Geely, Great Wall, and BYD have all gone through the test of selling over one million vehicles a year before growing into what they are today. If Leapmotor wants to become a well - known large car company, it will also have to go through this test.

Of course, behind this inspiring slogan is a more precise and detailed marketing calculation.

With the current sales volume, Leapmotor has just emerged from losses, but its profitability is still very weak in terms of figures: its cash flow has just turned positive, and the cumulative net profit is less than 500 million yuan.

At this scale, Leapmotor still has a very high operating leverage. Fixed costs plus R & D amortization almost consume all of its gross profit, and the net profit margin is only about 1% - 2%. Any negative fluctuations (price cuts, raw material price hikes, reduction of subsidies) will immediately turn the profit into a loss.

In addition, only when the production volume reaches one million vehicles can the supply chain trigger the "million - level" price drop, reducing the procurement cost by another 3% - 5%. At the same time, R & D and production line depreciation can be diluted to a "safe level", achieving stable profitability. This is the prerequisite for Leapmotor to continue investing in the high - end D series and building factories overseas.

Therefore, if Leapmotor can achieve the goal of selling over one million vehicles next year, its production capacity utilization rate will be further improved, the cost per vehicle will decrease, fixed costs will be diluted, and the net profit margin will increase to 3% - 4%. Eventually, the annual net profit is expected to grow from the current 500 - 1000 million yuan to 4000 - 4500 million yuan, providing cash - flow support for subsequent R & D and channel expansion and greatly increasing the company's breathing space.

That's why Zhu Jiangming said, "We've just won the 'war of resistance' and have just crossed the break - even point. If Leapmotor can't quickly increase its sales volume, enhance its profitability, and increase its market share, it may be in great danger."

Moreover, all car companies agree that the next three years may be the most competitive period for new - energy vehicles. The market is like sailing against the current; if you don't move forward, you'll fall backward.

To achieve this grand goal, Leapmotor plans to build a more complete vehicle lineup. On the basis of the further penetration of the B series this year, the A series and D series will be launched in 2026, ultimately forming a complete product line covering the mainstream price range from 60,000 to 300,000 yuan.

It's worth noting that the flagship SUVs and MPVs of the A series and D series will be introduced, and the D series will even have products in the 300,000 - yuan range. Leapmotor will finally have its "high - end" products.

However, under the new goals and product layout, Leapmotor's previously proud strategy may become a hindrance.

The Trap of Cost - effectiveness

Leapmotor's current achievements are largely due to its long - touted concepts of "full - scale self - R & D" and "precise cost - control".

Different from most "integrated" car companies that rely on external suppliers, Leapmotor has been conducting self - R & D from the underlying electronic and electrical architecture, core three - electric technologies, to intelligent cockpits and driving assistance systems since its establishment. Even for high - value - added components like AR - HUDs and seats, Leapmotor doesn't want others to take the profits and does everything by itself.

After saving costs through full - scale self - R & D, Leapmotor has more room to play with "cost - effectiveness", and it has embraced cost - effectiveness without hesitation.

Take the Leapmotor C11, which established its market position, as an example. In 2023, when most vehicles in the same price range were still using MacPherson suspensions, the Leapmotor C11, priced at 150,000 - 200,000 yuan, was equipped with an independent suspension system of "double wishbone front and five - link rear", which is usually only found in luxury cars priced over 300,000 yuan. Inside the car, it is equipped with three high - definition large screens, a Qualcomm Snapdragon 8155 chip, and Nappa leather seats.

Now, when people talk about Leapmotor on social media platforms, the first things that come to mind are "half - price Li Auto" and "half - price Tesla". Leapmotor can offer the same refrigerator, color TV, and large sofa as Li Auto, and the same range, suspension, lidar, and cockpit chip as Tesla. The configuration list is almost fully comparable, but the price is directly cut in half, which has become the ultimate weapon for attracting fans.

This strategy was effective during the sales growth stage, but the problem is that the "cost - effectiveness" of hardware does not automatically translate into the "satisfaction" of the user experience.

The most prominent issue lies in the huge gap between the visible hardware and the invisible comprehensive experience.

For example, in the core areas of new - energy vehicle intelligence: intelligent cockpits and in - vehicle systems, although Leapmotor generously provides top - level cockpit chips like the Qualcomm Snapdragon 8155 or even 8295, with the hardware specifications reaching the maximum, complaints about "a stupid in - vehicle system" are common on major car owner forums and social media. Problems such as "occasional screen operation freezes" and "the voice assistant not being intelligent enough" are ubiquitous.

This obvious shortcoming in software experience has devalued the top - level hardware and greatly reduced the so - called "intelligent cockpit" experience.

In addition, it has become a common perception among car owners that Leapmotor vehicles have average chassis quality and intelligent driving assistance levels. Some car owners have reported that even though they had expected it, the chassis of Leapmotor vehicles still "sways more than they imagined".

Especially for the C - series models, which initially tried to achieve cost - effectiveness with a "double wishbone + multi - link" suspension system, due to their large body size, the "boat - like feeling" is the most obvious: large roll angles, significant up - and - down movements, and long - lasting vibrations.

Many car owners joke that after driving a Leapmotor vehicle, they have finally understood the saying "good materials don't necessarily mean good tuning".

In terms of intelligent driving, although Leapmotor vehicles are equipped with large lidars, their experience is not significantly different from some brands' vision - based solutions and is also not much different from the L2 - level driving assistance of most fuel - powered vehicles, such as ACC.

There are many users on Xiaohongshu complaining about Leapmotor's intelligent driving system. The reliability of the urban NOA is low, and some users even encountered accidents during the most basic automatic parking test drive, which is really worrying.

At this time, investing in good hardware but failing to provide a good experience is often more frustrating than having a vehicle with mediocre hardware. Leapmotor has indeed piled on the hardware, but consumers don't feel the real benefits. Moreover, there are some companies that can provide a good experience with ordinary hardware, which makes users even more confused.

Originally, according to Leapmotor's plan, it would continue to expand its vehicle lineup to cover the 200,000 - 300,000 - yuan price range.

However, judging from the current market situation, every successful product in this price range is a tough competitor: there is Tesla, which leads in three - electric technologies; Xiaomi SU7/YU7, which offers high emotional value; Hongmeng Smart Mobility, a pioneer in intelligent driving; and Li Auto, the "original Li Auto".

In the areas that consumers care most about in new - energy vehicles: chassis, intelligent driving, and the "refrigerator, color TV, and large sofa" combination, there are superior alternatives to Leapmotor. Leapmotor's positioning as a "luxury alternative" is being mercilessly squeezed by the market.

When Li Auto launched the i6 at 240,000 yuan and started to offer a "30% - off Li Auto", Leapmotor, which is proud of being the "half - price Li Auto", will only become more and more passive.

In addition, as Hongmeng Smart Mobility's Shangjie aggressively enters the 150,000 - 200,000 - yuan price range with Huawei's intelligent driving technology, XPeng has lowered the prices of its G6 and P7+ models to below 200,000 yuan, and NIO has also launched more new models at the 150,000 - yuan level through BaaS...

These car companies can easily reuse the technologies, algorithms, and tuning from their models priced over 200,000 yuan to achieve a "dimensionality - reduction strike". Leapmotor may have to consider how to defend itself before thinking about how to attack.

It seems that it is by no means easy for Leapmotor to cross the annual sales threshold of one million vehicles.

The Absurd Reality

It sounds absurd that a car company with monthly sales of 50,000 vehicles has not yet reached a "safe period", but this is an absurd reality in the Chinese automotive market.

Ultimately, as Zhu Jiangming said, it is really cruel that a car company has to sell one million vehicles a year to truly cross the survival line.

Even for Leapmotor, which currently has monthly sales of over 50,000 vehicles, to reach the annual sales level of one million vehicles in the future means that its average monthly sales in 2026 need to steadily increase from the current over 50,000 vehicles to over 83,000 vehicles, presenting a perfect narrative of "scale + profit"