Don't Worry Too Much About Leapmotor!

In the automotive market environment where over 600 new car models are launched in six months, for car companies to achieve breaking even is already a blessing, those who can actually profit are extremely rare, especially for new EV brands to achieve profitability is even harder, of course this also explains from the side that this new EV brand is healthy enough, future prospects are also promising.

On August 24, Leapmotor submitted its 2026 semi-annual report results: Revenue 38.11 billion yuan, up 57.2% year-on-year; Net profit 210 million yuan, up about 600% year-on-year; Global delivery 356,487 units, up 60.8% year-on-year. In July it became the first domestic single-month delivery breakthrough 100,000 new EV brand with a result of 101,267 units.

But many noticed that the day after the financial report was released, Leapmotor's stock price fell nearly 4%, market value only HK$60.8 billion, far lower than NIO's 88.6 billion, XPeng's 91.36 billion and Li Auto's 101.4 billion HK dollars. Founder Zhu Jiangming also directly stated the company is severely undervalued.

Monthly sales break 100,000, new EV brand sales champion, continuous profitability — why can't it change the favor of the capital market? So what exactly is the market worrying about? Is Leapmotor truly overvalued?

By｜La Jiang

Editor｜Li Jiaqi

Image Source｜Internet

1

What level is a 589 yuan per-unit profit actually?

Since Leapmotor affordable friendly cars occupy the main sales volume, so the market undervaluing Leapmotor's first concern, points directly to Leapmotor's profit quality.

In the first half of the year, Leapmotor's gross margin slid from 14.1% in the same period last year to 11.7%, dropping 2.4 percentage points. According to net profit and delivery volume calculation, per-unit net profit is about 589 yuan — for every car sold, net earning is less than 600 yuan.

589 yuan per-unit profit, what level is it in the automotive industry?

China Association of Automobile Manufacturers data shows, first half of 2026 domestic whole car manufacturing segment average profit rate has dropped to 1.5%, for the lowest level in nearly ten years. Based on per-unit average price about 202,000 yuan conversion, industry average per-unit net profit attributable to parent company is about 3,000 yuan. 589 yuan is less than 1/5 of industry average. Horizontal comparison, 2026 Q1 NIO whole car gross margin 18.8%, XPeng first half auto gross margin 12.1% — Leapmotor's profit space is indeed rather thin.

However "thin" does not equal "weak". In Q2 Leapmotor has already shown clear marginal improvement signals, its Q2 gross margin improved 3.2 percentage points quarter-on-quarter to 12.6%, single quarter profit close to 600 million yuan. Q2 per-unit average price increased about 12,000 yuan quarter-on-quarter to about 110,000 yuan. The core variable driving this improvement is product structure optimization — D19 since launching in April has monthly average over 7,000 units, July breakthrough 10,000 units; A10 launched 135 days realized the 100,000th mass production vehicle off the line. Higher priced D series and C series proportion increased, directly raised per-unit average price and gross margin level.

More to see macro background: 2026 first half, Lithium Carbonate etc. raw material prices rose sharply; Jan-May auto manufacturing profit rate only 3.4%, whole car manufacturing total profit year-on-year down 43%. The whole industry is experiencing "incremental volume without incremental profit" pain.

So Leapmotor revenue growth without profit growth situation is not an isolated case — Li Auto 2026 Q1 whole car gross margin from same period last year 19.8% plummeted to 6.1%, net loss about 2.3 billion yuan. In the period of industry profit comprehensive pressure, Leapmotor not only held the profit bottom line, but also achieved 600% profit growth, this itself is a competitiveness.

Li Tengfei at financial report conference call clearly stated, full year overall gross margin expected to rebound to 13% to 14%. 589 yuan per-unit profit is a static section, dynamic improvement trend is the key.

2

Scale is the key vitality for Leapmotor's development

If profit quality is the market's "near worry", then scale moat is what Leapmotor is writing as its "long-term concern".

Sales end, Leapmotor's growth curve is steep: From April delivery 71,387 units to May breakthrough 80,000, June breakthrough 90,000, July breakthrough 100,000. First half 356,000 units delivery volume ranks first in new EV brands, leaving the second place more than 110,000 units behind. In global new energy passenger car brands ranks fourth, only behind BYD, Tesla, Geely.

Market share is a more critical number. As of end of June, Leapmotor in new energy passenger car market share has risen to 5.71%, compared to end of Q1 4.22% further climbed. Market share breakthrough 5% is an important industry watershed — it means the brand has already from "participant" stepped into "major player" ranks, possessed ability to influence market landscape.

Channel end, as of end of June, Leapmotor sales service network has covered 298 cities, cumulative layout 1,064 sales stores and 562 service stores. More noteworthy is channel structure — 3rd and 4th tier city stores proportion reached 70%. This is a market logic totally different from "NIO XPeng Li Auto": not in 1st tier cities close combat high-end market, but cultivate the broadest mass market.

As of end of June 2026, Leapmotor in new energy passenger car market share has risen to 5.71%. In 3rd tier cities, Leapmotor June single month sales reached 64,400 units. A10 occupies obvious advantage in 2nd tier and below 3rd tier cities. C11 in 3rd tier and below cities also performance outstanding. Comparing "NIO XPeng Li Auto", Leapmotor's sinking advantage is more highlighted. April 2026, Leapmotor sold 70,100 units, where A10 one model contributed 21,000 units; And NIO, XPeng, Li Auto, Xiaomi, Harmony Intelligence sales are between 29,000 to 35,000. The core of gap is not in product power, but in who understands China's broadest consumption market better.

Outbound end, first half export 96,294 units, up 372.6% year-on-year, already exceeded 2025 full year export total, accounted for first half total sales 27%. Overseas sales target already from 100,000-150,000 units adjusted up to 200,000 units. In overseas localization production aspect, relying on Stellantis Malaysia, Spain, Brazil factory layout is accelerating promotion. Overseas market has become Leapmotor important second growth curve.

Scale effect is being realized. Q2 per-unit average price increased 12,000 yuan quarter-on-quarter; With production sales volume increase, raw material cost and manufacturing expense expected to further optimize. Leapmotor's scale moat — from sales volume to market share, from domestic to overseas — is turning from blueprint to reality.

3

Unchanged car making original intention, rare strategic determination

In the wave of car-making new EV brands rushing high-end, telling stories, cross-border expansion, Leapmotor always doing one thing: making "good not expensive" National Economy cars.

This positioning never shaken. From founding initial establish "full-domain self-research" route, to 10 years later core parts self-research proportion reached 65%; From C series locking 120,000 to 170,000 yuan price band, to putting 800V high voltage platform, LiDAR etc. configurations down to 150,000 level market; From ABCD four major product matrix covering 60,000 to 300,000 yuan full price range, to clearly "make National Economy cars" strategic declaration — Leapmotor's strategic path clear as nearly "stubborn".

This determination in industry price war heated up today is particularly precious. When others "compete on price", Leapmotor "competes on assets" — using full-domain self-research tech dividends to realize cost advantage. Jinhua 20 km radius industrial cluster realized 70% major parts nearby supply; Model change insists "add configuration not add price", use 800,000 user scale dilute R&D cost.

Short term view, this indeed lets gross margin bear pressure. First half raw material cost increase and product mix change is main cause. But management has clarified path: through new model ramp-up and cost control, pull back full year gross margin to 13% to 14%. Full year net profit target although from 5 billion yuan down to 3 billion yuan, but in industry overall profit rate only 1.5% background, this still is top new EV brand most certain profit expectation.

More worthy of attention is tech reserve forward-looking. Leapmotor will in September hold 2026 annual tech launch conference, publish reaching "whole industry first tier level" intelligent assisted driving world model, and 3-electric field a series latest tech results. R&D expense first half reached 2.32 billion yuan, up 22.8% year-on-year. Meanwhile, Leapmotor has confirmed will enter embodied robotics track. Full-domain self-research tech accumulation is evolving from "cost advantage" to "tech barrier".

Clearly, Leapmotor is walking a path totally different from "NIO XPeng Li Auto" — not relying on brand premium earning high gross margin, but relying on scale effect and tech self-research building moat, letting most broad consumers with reasonable price enjoy tech progress dividends.

This road destined harder to walk. 589 yuan per-unit profit, 60.8 billion HKD market value, are all thorns on this road. But when monthly sales breakthrough 100,000 units, market share breakthrough 5.7%, overseas export year-on-year 372%, global new energy rank fourth — behind these numbers, is a forming, irrepressible industrial power.

Capital market habit using "NIO XPeng Li Auto" valuation model to measure every new EV brand. But Leapmotor proved one thing: National Economy car road, can also walk far. When an enterprise uses 10 years time sticking to same strategic direction, uses full-domain self-research taking high-end configs "hit" into 150,000 level market, uses scale and efficiency building peers hard to copy cost barrier — market will eventually re-recognize its value.

So really don't worry too much about Leapmotor, truly worth thinking is: In a whole car manufacturing profit rate only left 1.5% industry, who can still continuous profit, continuous growth, and in every key indicator constantly refresh records? China auto industry needs, never only "sell expensive" brand story, more is "make well" industrial strength. No doubt, Leapmotor is with action writing latter.