From the crumbling of the past to the current monthly sales of 3w+, Leapmotor is out of the circle this year.
Among the new power car brands, Leapmotor has always been known for its low-key, and some voices believe that the sales scale is not as good as that of its peers, the product line is relatively single, the research and development capability is weak, and the market strategy is conservative.
Compared with Ideal, Weilai, etc., Leaprun has always been a "younger brother", but in the competition with itself, Leaprun is also stronger year by year, and sales are rising in steps. In addition to the high sales in August and September this year, late at night on October 7, Zhu Jiangming, chairman of Leapmotor, posted the order situation of the National Day holiday in the circle of friends, locking 17,397 vehicles in the seven days of the National Day.
The reason for the increase in sales can be attributed to the fact that Leap has been learning from the "brothers", reducing costs while learning skills, reducing prices, exchanging price for volume, and outperforming itself in the past.
In the unprofitable stage, it survives by financing
Founded in 2015, Leapmotor is a high-tech enterprise integrating R&D, production and sales, and has always been committed to promoting the development of intelligent electric vehicles.
In the first half of 2024, in addition to Li Auto's profitability, other new power auto brands are facing varying degrees of losses.
Among them, NIO lost 10.384 billion yuan in the first half of the year, a decline of 5%, but it was still the largest loss among new power car brands; Xpeng Motors lost 2.653 billion yuan in the first half of the year, a decline of 47.1%; ZEEKR Automobile lost 2.19 billion yuan in the first half of the year, a year-on-year decrease of 1%, and it also faced greater profit pressure.
Leapmotor lost 2.212 billion yuan in the first half of the year, narrowing the loss by 2.8%. Through the observation of Leapmotor's financial reports over the years, its net profit has never returned to positive, that is to say, so far, Leapmotor has not made a profit, and the company's source of funds is mainly obtained by financing.
An automotive industry practitioner told Lanfu Finance Network that at present, only the ideal of new power cars is making profits, and brands such as Weilai, Xiaopeng, Leap, and Zeekr all rely on financing to continue their lives, waiting for the day of profitability. Moreover, the automobile industry is industry-oriented, and financial indicators such as corporate debt ratio are not taken seriously. ”
Correspondingly, Leapmotor's financing situation has been quite active in recent years, and it has gained the attention of capital in the early days of its establishment.
In December 2017, Leapmotor announced the completion of a Series A financing led by Sequoia Capital China Fund, but did not disclose the specific investment amount.
In January 2021, Leapmotor completed its Series B financing, with a financing amount of 4.3 billion yuan. The strategic investors in this round of financing are SDIC Chuangyi, Zhejiang University Jiuzhi, Yonghua Capital, etc.; Fu Liquan, chairman of Dahua Co., Ltd., the founding shareholder of Leaprun Technology, and Zhu Jiangming, founder and chairman of Leaprun Technology, increased their holdings;
In July 2021, Leapmotor completed a pre-IPO round of financing of over 4.5 billion yuan, led by CICC Capital, and the Hangzhou municipal government also participated in this round of financing as a strategic investor, with an investment amount of 3 billion yuan.
In November 2021, Leapmotor completed its Series C financing, with a financing amount of more than 6.08 billion yuan. Guoshun, which has a state-owned background, led the investment with 3 billion yuan, and Ge Weidong, a well-known private equity boss and chairman of the board of directors of Shanghai Chaos Investment, invested 500 million yuan to participate in this round of financing;
At the end of September 2022, Leapmotor was listed in Hong Kong at a price of HK$48 per share, issuing 130.8191 million H shares, raising HK$6.279 billion;
In 2023, Leapmotor received a strategic investment of up to 1.5 billion euros (about 11.6 billion yuan) from Stellantis Group, the parent company of Maserati;
In January 2024, Leapmotor entered into a H-share subscription agreement with Jinhua Industrial Fund for no more than HK$200 million, and at the same time entered into a domestic share subscription agreement with Wuyi County Financial Investment to issue more than 10 million domestic shares to it, obtaining a total financing of HK$659 million.
In October 2024, Leapmotor once again announced that it had received a strategic investment from local state-owned assets in Zhejiang. The company issued approximately 70.213 million new domestic shares to Wuyi County Financial Investment, Jinhua Industrial Fund, Hangzhou Hehe and Huzhou Xinchuang, raising RMB 2.6 billion.
Metrics improve sales increase
Leapmotor has continued to work hard to explore improvements based on consumer demand, industry competition gaps, product lines, prices, etc., and has achieved initial results - the gross profit margin will turn positive in 2023, and the gross profit margin of bicycles will continue to increase.
According to the data, in 2023, Leapmotor's revenue will increase by 35% year-on-year, achieving a net loss narrowing for the first time in nearly four years, further narrowing the gap with NIO and Xiaopeng, and achieving revenue of 16.747 billion yuan in 2023, an increase of 35% year-on-year.
Thanks to the improvement of product structure, continuous cost reduction and efficiency improvement, and unique technology cost reduction capabilities, the company's gross profit turned positive in 2023, and subsequently achieved a full-year gross profit margin of 0.48%. In the first half of 2024, the company's gross profit margin was 1.13%, a year-on-year increase of 119.27%.
In terms of gross profit of bicycles, the gross profit of bicycles in 2023Q4 was 6,400 yuan, an increase of 39,000 yuan compared with 2021Q1. Affected by factors such as price wars and model upgrading, the sales and management expenses of bicycles in 2024H1 increased month-on-month, and the gross profit of bicycles in 2024Q1 was negative, while the gross profit of bicycles in 2024Q2 turned positive to 2,800 yuan.
It is worth mentioning that in recent years, Leapmotor has benefited from the improvement of its cost control ability, and the expense ratio has dropped significantly to the industry's excellent level. From 2020 to 2023, the company's sales, management, and financial expense ratios have generally decreased significantly. In 2023, the three fee rates will be 10.7%, 16.6%, and -0.94% respectively, and the total of these three rates will be 26.4%, slightly lower than NIO's 29.6% and XPeng's 30.3%.
In terms of sales, in 2020, Leapmotor was still in the initial stage of entering the market, with relatively low sales of 631 million yuan, in 2021, with the improvement of market penetration and the enrichment of product lines, the sales of Leapmotor increased significantly to 3.132 billion yuan, and in 2022, the sales of Leapmotor achieved leapfrog growth, reaching 12.38 billion yuan, a year-on-year growth rate of nearly 300%. In 2023, sales will further increase to RMB16.75 billion, up 35.2% year-on-year; In the first half of 2024, sales will be 8.85 billion yuan.
Start a price war!
To this day, Leapmotor's sales are still climbing.
According to the data, in September, Leapmotor delivered 33,767 new cars, a year-on-year increase of 113.7%. Among them, Leapmotor C16 has become an important support for sales by virtue of its rich configuration and value advantages. In the first three quarters of this year, Leapmotor delivered a total of 172861 units, a year-on-year increase of 94.6%, and stood firmly in the 30,000 monthly sales club.
The reason for this, the above-mentioned industry insiders said, "Zero runs the ideal of benchmarking, labeling itself as 'replacement', and starting a price war!" ”
Zhu Jiangming once told the media in public that the price war will definitely continue in the next three years, and the competition will still be as fierce as it is now, because the whole pattern has not yet been determined. In the process of full competition, everyone must seize their own position.
Perhaps, "ideal replacement" is the position that Zhu Jiangming has seized for Zerorun, and in his opinion, price is an important advantage of Zerorun.
Leaprun and Ideal were established in the same year, aiming at the same market, providing similar products and implementing absolutely rational cost management.
The difference is that Ideal aims at the market of more than 200,000 bicycles, while Leap chooses to take a fierce attack in the market with a price of 150,000 bicycles.
According to the price on the official website, in addition to the mini car T03, the C10, C11, C01, and C16 are all in the 150,000 price band among the five models on sale.
The price of the 6-seater SUV model C16, which is regarded by netizens as an "ideal replacement", is up to 185,800. In comparison, the price of the ideal 6-seater SUV model L9 starts at 409,800 yuan, and the price of L8 starts at 321,800 yuan.
In this regard, Cao Li, senior vice president of Leaprun Technology, said that there is nothing wrong with replacing the ideal, and our products must be infinitely close to excellent products in terms of performance and product strength, but the concept of price is different, and it is definitely a good thing for Leap to be replaced.
It is understood that Leapmotor plans to have more series of products in the next two years in the price band of 100,000 to 200,000. In 2025, Leapmotor will launch three models of the B series, all of which will cost between 100,000 and 150,000 yuan. In 2026, Leapmotor is likely to launch three products with a central price of 200,000 yuan.
Netizen @Qingdao's banana said, "Zero Run: I'm not a flat replacement, I'm going to break your leading position!" "According to the current growth rate of Leapmotor's sales, it has gradually approached the more head of the new power car brand, and in the future, whether Leapmotor can become a "leading car" is worth continuing to pay attention to.