Zhejiang Leapmotor Technology, once a fringe player in China’s electric vehicle (EV) industry, is beating all its start-up rivals by sales and stock gains this year and analysts say there is more to come.
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The carmaker’s Hong Kong-listed shares have doubled since January – outpacing better-known peers XPeng and Xiaomi – and have surged more than 200 per cent from a low in August last year. The company has increased its 2025 sales target to 500,000 units, up from around 290,000 a year earlier, and is tipped to deliver its first annual profit.
Ten-year-old Leapmotor has won over investors by outcompeting its peers in price, principally by producing a large proportion of components in-house. A big driver behind that is the electronics and software background of co-founder Zhu Jiangming, who has helped drive the company’s R&D efforts.
“Leapmotor’s price competitiveness is remarkable, they’re offering large vehicles at mass-market prices, thanks to roughly 70 per cent vertical integration,” said Xiao Feng, co-head of China industrial research at CLSA Hong Kong. “We see strong upside potential driven by a robust product cycle and exceptional capital efficiency.”
The company’s shares rose 1.7 per cent on Monday to HK$66.35, up from last year’s low of HK$19.54 set in August. They are projected to climb to HK$74.89 in the next 12 months, based on a Bloomberg survey of analysts.
Leapmotor was established in Hangzhou in 2015 by Zhu and co-founder Fu Liquan, who together had previously set up security-camera manufacturer Dahua Technology. The carmaker remained an underdog in its early years with sales volumes trailing far behind those of industry giant BYD and also earlier start-ups such as Xpeng and Li Auto.
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A key to Leapmotor’s catchup since then has been Zhu’s insistence that the company develop as many of its own electrical components as possible to keep costs down. That focus has seen the brand being described as a “more affordable Li Auto”, referring to the latter’s mid-range and premium SUVs.
By way of comparison, Leapmotor’s family-oriented C11 SUV released in late 2020, retails for as little as 148,800 yuan (US$20,700). Li Auto’s cheapest vehicle, the L6 SUV, starts at 249,800 yuan.
