Leapmotor, a Hong Kong-listed electric vehicle maker backed by Stellantis, has significantly narrowed its net loss for the first quarter of 2025 as revenue surged and gross margins reached an all-time high, underlining the company’s shift toward financial discipline and operational scale.
Revenue for the quarter reached RMB 10.02 billion (USD 1.4 billion), up 187.1% from the same period a year earlier. Gross margin improved to 14.9%, a sharp reversal from -1.4% in Q1 2024. Net loss narrowed to RMB 130 million (USD 18.2 million), down from RMB 1.01 billion (USD 141.4 million), reflecting a strategy centered on high-volume sales, a refined product mix, and tighter cost controls.
The automaker delivered 87,552 vehicles in the first quarter, a year-on-year increase of 162.1%. Its flagship C-series lineup accounted for over 77% of total deliveries. The C10 model, launched in March 2024, has reportedly surpassed 100,000 cumulative units. Meanwhile, the B10, Leapmotor’s first SUV built on its next-generation Leap 3.5 architecture, recorded over 10,000 deliveries shortly after its April 10 debut.
The new platform integrates various technologies such as LIDAR (light detection and ranging), Qualcomm’s 8650 smart driving chip, and a centralized electronic control system. The company said it plans to introduce memory-based urban commuting and navigate-on-autopilot (NOA) capabilities by late 2025 and early 2026, respectively.
Despite seasonal headwinds from the Lunar New Year, Leapmotor maintained strong cash reserves, ending the quarter with RMB 25.7 billion (USD 3.6 billion) in cash, restricted deposits, and short-term investments. Operating cash flow turned positive at RMB 340 million (USD 47.6 million), while free cash flow stood at RMB -360 million (USD -50.4 million), a substantial gain from the RMB -1.5 billion loss recorded a year earlier.
R&D expenditure totaled RMB 800 million (USD 112 million) in the quarter, spanning smart driving systems, platform development, and core components. Leapmotor noted that its full-year investment in smart driving alone is projected at RMB 800 million, suggesting that the Q1 spend includes broader initiatives. The company continues to prioritize talent recruitment as it advances its autonomous driving roadmap.
Leapmotor’s results mirror broader momentum in China’s EV market. According to the International Energy Agency (IEA), global electric car sales are projected to exceed 20 million units in 2025, with China accounting for around 60% of those sales. Domestically, the market is forecast to grow at a compound annual rate (CAGR) of 17.15% through 2030, per Mordor Intelligence. Within this context, Leapmotor’s triple-digit revenue growth and margin recovery align with sector-wide expansion, albeit still trailing incumbents like BYD and Geely in scale and profitability.
The company is also scaling beyond China. Through its joint venture with Stellantis, it began selling vehicles in nine European countries in late 2024. Initial models include the compact T03 and the C10 SUV, with plans to grow its retail footprint to 500 outlets across Europe by 2026. As of end-March, the JV had established over 450 outlets and aims to achieve localized manufacturing in the region next year. However, Leapmotor has yet to disclose regional sales figures, suggesting that its customer base remains largely domestic.
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Its European outlook is further complicated by ongoing trade tensions between the EU and China. The EU imposed tariffs of up to 45.3% on Chinese-built battery EVs in late 2024, prompting discussions on potential minimum import prices as an alternative. Meanwhile, automakers such as BYD and Chery have shifted toward selling plug-in hybrid cars—which carry lower tariffs—while recalibrating their regional strategies. Though Leapmotor has not indicated similar adjustments, its exposure to Europe is still early-stage, and political uncertainty could temper consumer adoption and pricing flexibility.
Analysts and competitors are likely to take note of Leapmotor’s rapid margin recovery and its ability to sustain high growth while reducing losses. As price competition intensifies in China and strategic uncertainties persist in Europe, the company’s emphasis on platform efficiency, smart driving innovation, and global expansion through partnerships may offer a viable path forward.