"In the first 5 months of this year, hundreds of new car models launched, but sales contracted. The combination of declining sales, revenue, and profits is unprecedented." At the just-concluded 2026 China Automotive Chongqing Forum, Wang Xia, President of the Automotive Division of the China Council for the Promotion of International Trade and President of the Automotive Chamber of the China Chamber of Commerce, pinpointed the chronic involution in the current auto market.

The first half of this year has not ended yet, with 544 new car models launched domestically, including 71 brand new and facelifted models. However, national passenger car retail sales dropped nearly 20% year-on-year in the first 5 months. If exports are excluded, this figure is 23.8%. Not only fuel vehicles, but new energy vehicles also declined over 15% year-on-year. The auto market has fallen into 'false diligence' where the more effort one puts in, the more poignant it becomes.

The most terrifying aspect is that the automotive industry's profit margin was only 3.2% in Q1, a historical low. Regarding this, President Wang Xia stated: "Sales without profit support are just empty number games; profits maintained by subsidies are ultimately a castle in the sand."

As top new force players, Li Auto and Xpeng reported revenue growth rates of -11.4% and -17.6% respectively in Q1 2026. NIO benefited significantly from high-end models like the new ES8 launched in Q4 last year, with a growth rate of 112.2% in Q1, but still reported a net loss of 330 million yuan. Leapmotor, ranked first in deliveries, had a growth rate of 8%, with revenue hitting a record high for the same period last year. Why was Leapmotor able to achieve a 'double kill' of sales and revenue during the Q1 downturn in the auto market? Will the newly launched C Series help Leapmotor achieve its annual million sales target?

C Series sales share decline 'reasonable'? Will it definitely return to 50% after new launch!

Leapmotor was the new force sales champion of 2025. Following a full-domain self-research route, over 65% of core components are self-produced, resulting in lower manufacturing costs than competitors. The product matrix simultaneously covers the 100,000-200,000 yuan market segment. Pure electric + extended range dual lines have no shortcomings. Coupled with sufficient capacity support for continuous delivery, the pragmatic industrialized car manufacturing route and the 'half-price home SUV' label perfectly fit current mainstream consumer demands. This is the reason for its counter-trend growth.

In the past two years, C10/C11/C16, C Series models contributed massively to Leapmotor's sales. Sales share was 77% in 2024, 55% in 2025, but only 36% in Q1 2026. Why do the sales pillars fail? Because Leapmotor knows that to achieve the million sales target, C Series alone cannot support it; they must optimize product structure and bloom at multiple points.

So at the end of last year we saw the volume-driving A Series, profit-guaranteeing B Series, foundation C Series, and premium D Series. These four pillars support Leapmotor's sales. This year Q1 was also the C Series gap period, old models clearing stock, users waiting for facelifts, demand will concentrate on the second half.

The recently launched Leapmotor C Series focuses on unchanged prices with upgraded configurations. The whole range gets 8295 chips, LiDAR is moved down, and range is improved. This product structure repair was very timely, filling all pain points, so C Series sales share will significantly recover in the second half. Bold prediction: it will return to 50%.

Can the million sales target still be achieved? Where is the bottleneck? How to win?

Conclusion first: The 1 million annual sales target is challenging to reach, but likely achievable. Leapmotor's annual sales target composition is 900,000 domestically, 100,000-150,000 overseas.

Bottlenecks remain, a well-worn topic being slow capacity ramp-up. The Jinhua, Zhejiang factory producing the 100,000 yuan main model A10 started two-shift production in April, aiming for 30,000+ capacity in June. It still has distance from the 100,000 per month target. The Hefei factory just started production in May, with two-shift annual output 200,000-400,000, but capacity release is late, contributing limitedly in the short term. Plus battery cells, chips, and automotive-grade storage are still tight and prices are rising, restricting full production progress.

However, Leapmotor is very confident in the Jinhua, Hangzhou, Hefei golden triangle capacity layout, with a total annual planned capacity of 1.46 to 1.51 million units, nearly 1.5 times the million sales target. There is determination that as long as orders continue to pour in, they can handle this tremendous fortune.

Back to products, A10 first month firm orders broke 40,000 units, D19 broke 15,000 firm orders in 15 days. Plus this month's facelifted C Series, sales will likely hit new highs in the second half. Also, there is an ace card positioning the 50,000-70,000 yuan range, targeting the sinking market—A05 launching soon. This small car can add L2-level driving assistance systems, crushing competitors at the same level.

As long as Leapmotor can take a huge market share in this price range, other competitors will have no chance to turn the tables. Consumers at this price point are usually very price-sensitive. Either first-time buyers with budget constraints, or second family cars with limited demand, so price will be the biggest factor in decision-making. A05 will likely become a rocket accelerator on Leapmotor's million sales journey.

Except for the domestic market, Leapmotor Q1 overseas exports were about 40,000 units, exports skyrocketed 442% year-on-year, ranking first in export volume and export share among new forces. This benefits from Stellantis Group's 40 countries, 800+ store resources. Leapmotor doesn't need to build global channels itself, which is unique among all new forces. In the second half, with factories in Spain, Malaysia, etc., going into production, Leapmotor's overseas sales might have even bigger surprises.

In the road to smashing the million sales target, Leapmotor has one last trick: trade price for volume. Compared to competitors, Leapmotor still has room for price cuts in the 100,000 yuan range, but Leapmotor leading sales won't take risks desperately. After all, once prices drop, it's hard to recover.

Another reason for confidence in Leapmotor's second half sales is market laws. Looking at the past 5 years, the auto market shows a pattern of slow first half, busy second half. Usually, the second half accounts for 55%–60% of the full year. As Leapmotor Vice President Li Tengfei said: "Annual sales will show a trend of first suppress then rise. We are very confident in the goal of hitting 1 million units."

Can selling at low prices break the predicament where bigger scale means weaker profitability?

From annual loss of 5.1 billion to profit of 540 million, Leapmotor interpreted a textbook loss reduction curve in just three years. But Q1 2026 Leapmotor welcomed new challenges. Gross margin 9.4%, less than the 14.9% of the same period last year. Net loss 390 million yuan. Last year same period lost only 130 million yuan. And last year Q4 still made 360 million.

Leapmotor car profit in 2025 was 903 yuan per unit, less than one-tenth of BYD, one thirty-fifth of Li Auto. Selling the most, but earning the least. And B10 new model R&D, overseas channel deployment, Malaysia and Spain factory production, all require continuous investment.

Although Leapmotor has run through the economies of scale loop through extreme cost control and high sales turnover, the profit ceiling under the low-price strategy is gradually becoming clear. Leapmotor sales are still new highs, scale is still growing. By 2028 economies of scale will be fully released, fixed cost per unit significantly diluted.

Additionally, Leapmotor's LEAP 3.5 architecture, C/B Series model component commonality rate reached 88%, amplifying 'reuse effect' not only shortened new model development cycle by 25% compared to previous generation, whole vehicle R&D investment will also reduce by 40%. It also improved procurement bargaining power by sharing core parts like chassis, lights, seats. Only then will economies of scale welcome the true inflection point on profits. At the same time, Leapmotor also announced plans to launch its own second high-end independent brand in 2027. New product pricing will target the 300,000 yuan+ high-end market, opening price ceiling, boosting brand premium.

Domestically using high specs low prices to seize market, overseas Leapmotor actively borships seeking premium space. Global fourth largest carmaker Stellantis Group, after announcing deepening strategic cooperation with Leapmotor on May 8 this year, decided to hand over operation rights even ownership of its European flagship factory to Leapmotor. In the near future the Spain Zaragoza Plant that once produced Opel, Peugeot will produce Leapmotor's B10. And the Madrid Villaverde Plant that once produced Citroën will also start producing Leapmotor in 2028.

Besides this, based on Stellantis Group's advantage of over 30% market share in South America, Leapmotor's Brazil Plant is also progressing in an organized manner. And with South East Asia market performance year-on-year improvement this year, Leapmotor is also actively advancing Indonesia, Malaysia, Thailand plant plans. In the future high gross margin overseas business share will rise, balancing Leapmotor's domestic low-price involution losses.

Conclusion

Leapmotor founder Zhu Jiangming once said: "Only by surviving can we develop. Making scale bigger is a goal more important than profitability." So at this stage after Leapmotor completes the million sales target, it will smoothly pass through the cycle. But profitability yields to scale expansion, annual 5 billion net profit goal will be missed.

Just as President Wang Xia said at the beginning, scale without profit is poison. In this final elimination race of global new energy giants, million sales were never the goal. To get the ticket to the future, either run through unmanned driving, get the next baton of technical revolution, or run through overseas markets, become the 'Toyota' of the new energy era.

June 15, Gasgoo learned that Leapmotor recently achieved significant progress in overseas markets. The company announced that its flagship model Leapmotor C10 has officially launched localized assembly production at the Kulim plant in Kedah, Malaysia.

Image source: Leapmotor

This mass production launch was co-hosted with the distribution business launch ceremony of Malaysia's well-known automotive dealer Cycle & Carriage. Both parties simultaneously announced two core developments in production and channels, and will leverage Stellantis Group's mature local manufacturing capabilities as well as Cycle & Carriage's distribution network to jointly strengthen Leapmotor's operational foundation in the Malaysian market.

As the core model for Leapmotor's entry into the Southeast Asian market, the Leapmotor C10 has already gained a certain reputation in the Malaysian market thanks to its product strength and intelligent cabin configuration. According to official information, after achieving local assembly, the model will effectively shorten the vehicle delivery cycle and optimize supply chain costs to better adapt to local user needs.

The Malaysian Kulim plant adopts professional complete vehicle manufacturing systems and quality control standards to ensure the quality of mass-produced models. According to the plan, besides C10, the Leapmotor B10 model will also be introduced into the plant for localized production subsequently to continuously enrich its product matrix in the Southeast Asian market.

Leapmotor stated that the completion and commissioning of the Malaysia localized production base is a key step in the steady advancement of its globalization strategy. In the future, the company will leverage global partner resources to continuously improve the overseas production, sales, and service full-chain layout.

Recently, Leapmotor announced May sales data, with single-month deliveries reaching 81,569 units, a year-on-year growth of 81%, and a month-on-month increase of 14.26%. This impressive performance report propelled Leapmotor to become the focus of the domestic new energy vehicle market. Following the current growth pace, the brand's annual sales are expected to break the million mark, joining the top ten domestic passenger car sales rankings. Comparing industry data reveals that last year the tenth domestic automaker had an average monthly sales volume of about 71,000 units, while Leapmotor's current monthly sales have surpassed this level. It also widened the gap with top new forces like Li Auto, Xpeng, NIO, Zeekr, etc., as the latter brands maintained May deliveries within the 30,000-unit range. Looking back at the development history, Leapmotor's growth speed is astonishing. In 2019, the first model's annual sales were less than 3,000 units; in 2025, annual deliveries approached 600,000 units; and by this May, it successfully stepped onto the monthly sales 80,000-unit plateau, becoming one of the fastest-growing new energy brands in China. As sales continue to rise, the market also began to explore which consumers are choosing Leapmotor vehicles.

Currently, the penetration rate of new energy vehicles in China has surpassed 50%, and the market development logic has witnessed a significant shift. In the early stage of industry development, new energy vehicles mainly relied on tech-savvy early adopters who love new things. Now, the core driving force for market growth has gradually shifted to the replacement demand of traditional fuel car owners. For ordinary family consumers, car purchasing focuses more on practicality and cost-effectiveness. Currently, in most regions in China, 92 octane gasoline prices have long stayed around 8 yuan per liter. Annual fuel costs for a conventional fuel car often exceed 10,000 yuan. The lower usage costs of new energy models have become a key factor in attracting replacement buyers. Leapmotor's main products focus on the 100,000 to 200,000 yuan price range, which is the largest passenger car volume segment in China, precisely capturing the two market trends of fuel car replacement and new energy vehicle penetration into lower-tier markets. Surveys show that many walk-in intention users originally drove mainstream family fuel cars like Sylphy, Lavida, Haval H6, etc. When choosing cars, they value interior space, range capability, practical configuration, and cost-performance ratio more. Meanwhile, charging infrastructure in tier-3, tier-4 cities and county markets continues to improve, making up for the shortfalls of new energy vehicle penetration. Leapmotor's entry-level model A10 has gathered numerous orders in tier-3 and lower cities. Only months after launch, this model's May sales reached 23,000 units, fully demonstrating the consumption potential of lower-tier markets.

Combining the domestic vehicle insurance data for the first four months of 2026, one can clearly outline the overall profile of Leapmotor's domestic users. Data shows that multiple models under Leapmotor share sales pressure, and the product matrix development is balanced. Among them, C10 cumulative insurance coverage is close to 30,000 units, accounting for the highest proportion of total sales. Models like B01, C11 also have impressive market performance. From the user attribute perspective, Leapmotor's core customer group is pragmatic family users. Purchase budgets are mostly concentrated around 150,000 yuan, pursuing high space utilization, reliable range, smart configuration, and low usage costs. Different models correspond to differentiated consumer groups: The entry model A10 mainly targets families with children, belonging to first-time purchase or additional purchase models for the family. Female user proportion is considerable, and many users prefer the long-range version. Usage scenarios include long-distance self-driving. While the flagship SUV D19 targets the middle-class upgrade replacement group. Car owners are mostly middle-aged and young workplace management levels. Among them, there are many old owners of luxury brands and old Leapmotor users. Positioning leans towards the high-end family market. From the city distribution perspective, Hangzhou, Guangzhou, Chongqing, Shanghai, Chengdu, and other tier-1 and new tier-1 cities are Leapmotor's main sales bases. The Zhejiang local market is particularly well-rooted, and sales in multiple prefecture-level cities remain firmly at the forefront. It is worth mentioning that Leapmotor's sales basically come from personal private car procurement. The proportion of operating vehicles is extremely low, and terminal market development is very healthy.

Besides deepening the domestic market, the overseas market has also become a brand new growth engine for Leapmotor. In the first four months of 2026, Leapmotor accumulated exports of 64,000 units. April single-month exports reached 22,000 units, accounting for 30% of that month's total sales. The brand tailored different models for different overseas road conditions, purchasing power, and driving habits, launching differentiated models to achieve precise layout. Europe is Leapmotor's largest overseas market. Local fuel costs are high, urban roads are narrow, and the compact and flexible T03 became the export mainstay. Relying on price and configuration advantages, it gained numerous orders in countries like Italy and Belgium. In the Southeast Asian market, local consumers have limited budgets, and the economic and practical T03 is equally popular. The South American Brazil market, with vast territory and high long-distance travel demand, focuses on the extended-range model C10, precisely adapting to local travel scenarios. In terms of channel layout, Leapmotor chose to cooperate with the international automotive giant Stellantis. Leveraging their mature distribution network and after-sales system, they quickly opened the overseas market, while also laying out local factories in places like Spain and Malaysia. This further reduced operating costs and avoided tariffs, accelerating overseas market expansion.

Leapmotor managed to stand out among a crowd of new energy new forces, achieving a monthly sales result of 80,000. Behind this is a clear development strategy and hard-core comprehensive strength. The brand did not blindly chase the high-end market and flashy tech concepts, but has been long rooted in the mainstream family market, creating a complete product matrix covering the 70,000 to 300,000 yuan price band to meet the car usage needs of families at different levels. Full-domain self-research is Leapmotor's core trick for controlling costs. Its core component self-research rate exceeds 65%, and the vehicle platform component commonality rate reaches as high as 88%. This effectively got rid of reliance on external supply chains, allowing products to maintain affordable prices while guaranteeing configuration. Now Leapmotor is working on both domestic and overseas lines, effectively hedging the operational risks of a single market. Financial performance has also remained stable. In 2025, it successfully achieved full-year profit. In the first quarter of this year, under the premise of continuous investment in overseas factory building and new product R&D, it still maintained a considerable gross profit margin.

Looking back at Leapmotor's development path, its success logic is simple and pragmatic: Conforming to the big trend of new energy vehicle popularization, targeting the huge base of ordinary family consumers, relying on R&D technology to control costs, relying on rich models to cover segmented needs, and leveraging cooperative channels to develop the overseas market. At a time when the car market is returning to rationality, consumers no longer simply chase brand gimmicks, but vote with actual consumption choices. Leapmotor's rise also confirms a truth: In the fiercely competitive automotive industry, accurately grasping the real needs of the masses and continuously providing high-value products is how one can stand firm and achieve long-term development.