LEAPMOTOR: Turning Profitable in Q3 2023, A Key Milestone?

Zhejiang LEAPMOTOR Technology Co., Ltd., known as LEAPMOTOR (9863.HK), has released some positive news in their Q3 2023 financial report: a gross profit margin turned positive for the first time, reaching 1.2%. This demonstrates that LEAPMOTOR can become profitable under competitive product pricing, marking an important milestone in shifting the business from scaling to improving quality.

The report also indicated a significant increase in LEAPMOTOR’s sales in Q3, with 44,325 units delivered, a YoY increase of 24.5%, setting a new historic high for quarterly deliveries. The sales revenue for Q3 was CNY 5.656 billion, a YoY increase of 31.9%. The turn to positive gross profit and significant sales revenue growth highlights the robust dynamics of LEAPMOTOR’s operations.

LEAPMOTOR is aiming to offer products and services with great value, targeting the mass auto consumer market priced between CNY 150,000 to 200,000. Its main product, the C-Series, provides a unique “dual power” layout of pure electric + range extender new energy, catering diverse, multi-scenario automobile needs of a broader population.

Moreover, being a one-of-a-kind fully self-developed intelligent electric vehicle company with the highest level of vertical integration in China, LEAPMOTOR is entirely self-reliant in core systems and electronic parts such as batteries, electric drives, and electric controls, comprising 70% of the vehicle’s total cost. This independence implies LEAPMOTOR’s strong bargaining and pricing power over its products. Steady sales growth leverages economies of scale to achieve competitive pricing.

From a global perspective, LEAPMOTOR is continually expanding into overseas markets. The company plans to simultaneously launch five international products in Europe, Asia-Pacific, the Middle East, Americas, and other regions in the next two years. Their aim is to approach international markets through various cooperative relationships, hoping to integrate into the global automobile industry with an open attitude.

In 2023, LEAPMOTOR made significant progress in product upgrades, core technologies, channel construction, and globalization. Future focus lies around its self-development and vertical integration strategy to continue delivering high-quality products, exceeding customer expectations, and ultimately, fulfilling long-term development strategies.

This article is a translation by AI of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.