Zhejiang Leapmotor Technology has increased its full-year sales target following a profitable first half, driven by strong demand and a significant push into overseas markets. Co-President Michael Wu stated that the Chinese EV maker's strategy will not be impacted by government efforts to curb price wars.
Leapmotor reported a record interim revenue of $5.7 billion for the six months ending June 30, a 57.2% increase year-over-year. This surge was attributed to record deliveries and rapid international expansion. The company’s gross profit rose by 29.7% to $654.6 million. Attributable net profit reached $30.9 million, a substantial increase from $4.5 million in the prior year, with the company swinging to an operating profit of $19.0 million from an operating loss of $13.2 million in H1 2025.
Despite this strong performance, Leapmotor cut its full-year net profit guidance by 40%, from an initial target of $743.9 million to approximately $446.3 million. This reduction is primarily due to rising raw material costs, which compressed the gross profit margin (GPM) to 11.7% from 14.1% a year earlier. The company aims for a full-year GPM of 13%-14%, with vehicle-level GPM at 10%-11%, necessitating a recovery in the second half of the year. Cost of sales increased by 61.6% to $5.0 billion, outpacing revenue growth. Selling expenses also climbed by 41.7% to $297.6 million as Leapmotor expanded its retail network across over 40 countries, including Argentina and Mexico. Research and development spending rose by 22.3% to $342.2 million.
Leapmotor delivered 101,267 vehicles globally in July, marking a 102% year-over-year increase and making it the first Chinese emerging automaker to exceed 100,000 monthly deliveries. First-seven-month deliveries reached 457,754 units, representing 45.8% of the company's full-year target of one million vehicles. To meet this target, the company would need to deliver an average of 108,449 units per month for the remaining five months. Exports in the first seven months totaled 113,863 vehicles, an increase of 281.5% year-over-year, accounting for 24.9% of total deliveries during that period. The company expects overseas sales to range between 150,000 and 200,000 units in 2026, with a working assumption at the upper end of this range, and a target of 350,000-400,000 units for 2027. Local assembly operations are crucial to Leapmotor's overseas expansion plans, with plants in Spain (Zaragoza) set to open in October, Malaysia beginning mass production of the B10 in Q3, and Brazil starting B10 assembly in H2 2027. An Indonesian plant began production on July 31, with local B10 and C10 deliveries expected from August.
