Leap's new high-end brand is already on the verge of launch

After overcoming fluctuations during the off-season, Leap Motor finally revealed its hand.

On May 15, 2026, Leap Motor announced its first quarter results, with sales increasing over 25% year-on-year, but revenue only grew by 8%, and gross profit margin adjusted by 5.5 percentage points to 9.4%. During the early part of the year’s vehicle sales off-season, Leap Motor was not immune, experiencing a pullback like many other competitors.

At the earnings conference that evening, CFO Li Tengfei confirmed that first quarter sales were affected by seasonal industry factors, with scale effects not fully released, and production capacity and parts reserves increased compared to the same period last year. However, due to seasonal influences, sales growth in Q1 was limited, leading to a decline in capacity utilization and a significant rise in manufacturing costs.

Additionally, the vehicle model mix also changed. In the same period last year, the company mainly sold C-series models; this quarter, B-series models accounted for a higher proportion, though B-series models have slightly lower gross margins than C-series, which is one of the key factors for the year-over-year decline in gross profit margin in Q1.

Despite this, Li Tengfei still stated that the target of 5 billion yuan in net profit for the year remains unchanged, and confidence in achieving the 70k vehicle sales goal persists. Li Tengfei is not managing market expectations; in fact, the bottoming out has already been completed this year, and the second half will see a recovery in growth. Moreover, Leap Motor still holds two trump cards: one is the highly anticipated overseas expansion, and the other is the long-rumored second brand, which has been confirmed to exist.

Breaking down further, compared to Q1, Leap Motor’s sales side has already begun to accelerate rapidly in Q2.

Just past April, Leap Motor’s monthly deliveries again surpassed 70k units, reaching 71,387 units, a year-on-year increase of 73.9%. This achievement ranks first among new car brands and broke their previous sales record. The newly launched A10 is the main source of this growth.

Leap Motor Senior Vice President Cao Li told Wall Street Journal that by the end of April, A10 had begun double-shift production, aiming for 26,000–27k units in May, with hopes to reach over 30k by June, and even push toward 35,000–36k units. Delivery speed will continue to accelerate. The D19 is also speeding up capacity ramp-up.

Leap Motor has high expectations for Q2, providing a sales guidance of 240,000–250k units, which means that, excluding April’s 71,387 units, the average monthly sales for May and June could reach 87k units.

The sustained popularity of A10 and D19 has left ample room for growth in the upcoming three quarters. The upcoming flagship SUV D99 and compact sedan A05 will also become important growth points. Moving forward, with the refresh and upgrade of B and C series products and the implementation of new high-end intelligent driving features within the year, Leap Motor will enter a period of rapid scale expansion after Q2. However, it must be noted that the domestic auto market has already entered a stock competition phase.

This is the core reason why Leap Motor dares to forecast a 5 billion yuan annual profit despite a loss in Q1.

But this is still a stock competition. Several auto executives told Wall Street Journal that the overall growth of the domestic auto market this year may slow significantly. Leap Motor’s ambition is to become a new giant, so expanding new volume and increasing profit margins remain key challenges for this emerging dark horse.

On the overseas front, Leap Motor, standing on Stellantis’ shoulders, is accelerating its volume expansion.

In Q1, Leap Motor exported 40,901 units, a staggering 442% increase year-on-year, accounting for 37.1% of total sales. Leap International aims to break even in 2024 and turn profitable in 2025, which is almost unique among new entrants expanding abroad.

By country, Italy registered 11,637 units in Q1, maintaining the top spot in pure electric sales for two consecutive months; Germany sold 1,258 units in March, securing the top position among Chinese BEV brands. The total registrations across 16 European countries have increased eightfold year-on-year.

In Q4, the CKD mass production at the Spanish factory will commence, with A10 entering Europe in Q3, and the D series will gradually be introduced to the European market. After validating the overseas sales model, Chairman Zhu Jiangming believes that the 37.1% overseas share will not be the end goal. His personal target is a roughly 50/50 split between domestic and overseas markets. Accordingly, Leap Motor has also raised its export target for this year to over 150k units.

However, as competition among automakers intensifies and amid the current weak automotive demand, it remains difficult to predict when the price wars will end.

Although Leap Motor, with its “Uniqlo of the auto industry” positioning, has outperformed the market in scale, the profit decline in Q1 has served as a wake-up call. Industry insiders believe that Leap Motor’s vehicle model structure still shows a downward trend, so how to boost average selling price and profit margins will be crucial for its long-term battle.

At the earnings conference, Li Tengfei confirmed that the company is developing a second high-end brand, with the first product expected to debut by the end of this year and launch by mid-next year at the latest. Unlike the current main brand, which focuses on mass-market vehicles with “luxury features + high cost-performance,” the second brand will fully target the high-end market.

In other words, Leap Motor plans to break the 300k-yuan price ceiling with this second brand, seeking greater profit margins.

Additionally, in 2026, Leap Motor will further promote self-developed parts for external supply. Its joint development project with Hongqi for a new vehicle will be launched in Q4, and collaborations with Opel under Stellantis are also actively progressing.

Industry experts see these as external benefits brought by technological self-research. The increasing proportion of high-end products and expanding overseas scale, combined with rapid growth, are amplifying the leverage of technological self-research.

The Chinese auto industry has entered the latter half of the elimination race. In the past, it was about who could tell the best story; later, it was about who dared to engage in price wars; now, it’s about who can establish systematic competitive advantages. From Leap Motor’s current initiatives, it’s clear they are not content to be just a nimble new force. They aim to become the next truly Chinese auto giant.

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