Leapmotor CEO Prioritizes Scale Over Profitability, Invests Over $1.4B in Single New Model

On April 16, Zhu Jiangming, CEO of Leapmotor, stated after the company's new vehicle launch event that "survival" is the top priority in today’s fiercely competitive automotive market, and scale matters more than profitability in the short term. He noted that developing an entirely new vehicle model requires an investment of at least RMB 1 billion, even under extremely cost-conscious conditions. If sales fall short of expectations, it would result in significant losses on the production side. In recent years, the pace of new vehicle launches in China has continued to accelerate. In 2025, approximately 1,278 new models are expected to hit the market—averaging 3.5 per day—of which around 200 will be all-new models, with the rest being facelifts or generational updates. On April 16 alone, six new vehicles were launched domestically. The industry is currently in a phase of intense consolidation, and it is expected to take two to three years before the market returns to normalcy. Unlike the era of internal combustion engine vehicles, today’s new energy vehicles (NEVs) face significantly shortened product cycles due to rapid hardware iterations in components such as chips and batteries. Previously, successful models could remain on the market for five to seven years; now, their peak sales periods typically last less than a year. This has led companies into what is being called the “new model effect death valley”—by the time production ramps up, demand has already declined, exacerbating supply-demand imbalances and intensifying operational pressures. According to disclosed figures, Leapmotor delivered 596,000 vehicles in 2025, ranking first among Chinese EV startups, and achieved its first-ever annual profit, reporting a net income of RMB 540 million. However, its operating profit was only RMB 180 million, with the majority of earnings coming from non-core businesses such as carbon credit sales and technology licensing. Excluding these factors, its core vehicle manufacturing business remains barely at breakeven. The company aims to reach one million vehicle sales in 2026, with an expected net profit exceeding RMB 5 billion. Despite having turned profitable, management emphasized that expanding scale will remain the central focus over the next three years, asserting that without sufficient scale, survival in future competition will be impossible.