Leapmotor used its annual technology day in Huzhou on September 16 to lay out a strategy that goes far beyond its reputation for cheap electric cars. The company, which delivered 103,129 vehicles in August—more than double the 42,101 units of Harmony Intelligent Mobility Alliance, the second-place player—spent most of the event arguing that its sales success stems from technology, not just low prices.
Founder Zhu Jiangming, who closed the event, said "technology is always greater than sales" and hinted at a second brand that would aim to become "the Apple of the automotive industry." While details remain scarce, Chinese media outlet LatePost has reported, citing multiple independent sources, that the new brand will be priced above 300,000 yuan (about $42,250). That would be a major leap from Leapmotor's average selling price of 106,900 yuan (about $15,060) in the first half of this year.
Vertical integration as a cost weapon
Leapmotor's approach is built on deep vertical integration. The company operates 18 component factories, producing battery packs, electric drives, controllers, and headlights in-house. By standardizing components—such as using just three battery cell types since 2018 and sharing one architecture across its A, B, C, and D platforms with 90% commonality—Leapmotor spreads development costs across high volumes.
This strategy has also turned Leapmotor into a supplier. Its electronic systems have been selected by five automakers, electric drives by eight, battery systems by ten, and headlights by five, with headlights already in mass production. The company's ability to cut costs through scale and commonality is crucial in a market where new-energy vehicle retail penetration reached 64.2% in August, yet the auto industry's profit margin has fallen to 3.6%.
The new LEAP 5.0 architecture, unveiled at the tech day, pushes this philosophy further by rethinking the entire vehicle structure. CTC 3.0 (cell-to-chassis) eliminates the separate low-voltage battery, integrating low-voltage power into the traction battery. A super-integrated air conditioning unit moves the HVAC box out of the passenger cabin, reducing thermal management parts from 69 to 21 and piping from 6.2 meters to 3.3 meters. These changes cut parts, wiring, assembly steps, and space, though the impact on real-world experience awaits production vehicles.
Chasing higher margins with a premium brand
Despite its sales volume, Leapmotor has yet to convert that into significant profit. In the first half of 2026, it delivered 356,500 vehicles and generated 38.11 billion yuan (about $5.37 billion) in revenue, but net profit attributable to shareholders was just 208 million yuan (about $29.3 million)—a net margin of 0.55%, or roughly 583 yuan (about $82) per vehicle. Gross margin fell to 11.7% in the first half from 14.5% last year, and free cash flow was only 140 million yuan (about $19.7 million).
To improve profitability, Leapmotor plans to sell more expensive cars. The second brand, expected to launch in 2027 with its own sales network, is positioned above 300,000 yuan (about $42,250), akin to Lexus's relationship with Toyota. The LEAP 5.0 architecture is designed for this new brand, with a focus on spaciousness. By moving the air conditioning unit out of the cabin and the powertrain to the rear, the interior length reaches about 4,400 mm, roughly 700 mm longer than comparable models. The floor is lowered by 70 mm, and the roof rises 800 mm, allowing occupants to stand upright.
The architecture also introduces a 48V low-voltage electrical system, replacing the traditional 12V, quadrupling power capacity and halving wiring weight. This supports the "living space" concept, where the cabin can function as a living room, dining room, bedroom, and media room.
Leapmotor's challenge is to prove it can sell premium vehicles. Its current network is built for 100,000-yuan cars, and the new brand requires separate showrooms and service infrastructure. The company will compete with Li Auto, Aito, and Denza in this segment. Its self-developed ADAS (advanced driver assistance) is also under scrutiny, as the team only grew beyond 800 people in 2024 after years of limited investment. Zhu explained that early financial constraints forced a cautious approach, but the company remains committed to in-house development.
According to D1EV (First Electric), the tech day showcased Leapmotor's "three core technologies" in intelligent driving, electric drive, and batteries, but the second brand itself won't be revealed until 2027. For now, the market must judge Leapmotor's ambitions by the architecture it has laid out.
