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How a Hatchback Mini Electric Car Became One of China’s Most Attractive Electric Vehicles


Sales of the Compact 4-Seater Electric Vehicle are central to Leapmotor’s success.

Zhejiang Leapmotor Technologies Ltd. there’s more than a week before a disastrous trading launch in Hong Kong. While the electric vehicle manufacturer’s mini T03 car is outselling companies like Nio Inc. and Xpeng Inc. in Chinait makes no profit.

Sales of the 4-seater compact EV have been central to Leapmotor’s success, accounting for nearly three-quarters of the startup’s total deliveries since its inception.

In September, Hangzhou-based Leapmotor delivered 11,039 vehicles, up 200% from a year earlier, ranking third among self-made electric vehicles in China. starting a businessbehind Hozon New Energy Automobile Co. and Li Auto Inc.

But despite its popularity, the affordable T03, which starts at 79,500 yuan ($11,200), is a loss leader, with Leapmotor’s gross margin for the second quarter being negative. 25.6%, compared with about 11% to 21.5% for peers.

Leapmotor is trying to move up the value chain. According to Frost & Sullivan, the company’s new C11 SUV and C01 sedan range in price from 180,000 yuan to 290,000 yuan, and the larger premium electric vehicle market is the segment that is expected to grow the fastest next year. 2023, according to Frost & Sullivan.

Jochen Siebert, managing director at JSC Automotive, said: “Starting from such a low position in the market, I doubt that Leapmotor will sustain it. “They have to go higher. That’s the only way they can survive.”

Boosting production will not be easy. Medium Leapmotor one The 200,000-unit factory is in Jinhua, while the second one in Hangzhou won’t start production until the end of 2023.

Follow Bloomberg Intelligence analysts Steve Man and Joanna Chen, Who also sees direct competition from a host of other mass-market electric vehicles from BYD Co., Volkswagen AG and other established automakers with stronger brands, broader sales networks and wider sales networks. and greater research and development and production capabilities.

A representative of Leapmotor said via email that the company plans to “gradually increase our production capacity, along with the growth in our sales volume.” About a quarter of the approximately $800 million raised in Leapmotor’s Hong Kong The stock listing will aim to “enhance our capacity and production capabilities as we continue to scale.”

Branching out of China could be another growth path.

In September, Leapmotor took its first step abroad, exporting 60 T03 cars to Israeliand it also sets goals Europe. Can international consumers be wary of the T03’s interactive digital assistant, which uses Iflytek Co’s 3.0 intelligent voice recognition system. – a technology company blacklisted by WE – is still being watched.

“That won’t be a selling point,” says Siebert, adding that it’s more important for Leapmotor first to “enter the profit zone”.

Until then, however, Leapmotor looks set to at least enjoy strong support from consumers in China.

The hatchback, which comes in a variety of colors including pastel pink and pistachio green, is targeted at lower-end mass-market customers and those in smaller cities who desire a body-friendly EV. Pocket-friendly also comes with sophisticated in-car digital services.

Despite its compact design, the T03 – a step up from SAIC-GM-Wuling Automobile Co.’s small Hongguang Mini, which retails for around 32,800 yuan – is equipped with two dashboard screens with controls touch, voice AI assistantpreliminary autonomous driving technologies and phone-based connectivity features.

The T03’s battery also goes about 250 miles (402 km) per charge – about the same as much larger EVs.

Many car buyers have posted about its cute features, battery performance and many digital conveniences like unlocking the car with facial recognition. “It’s the best for that money in my pocket,” Youthful Peach wrote to her 14,000 followers on Chinese lifestyle app Xiaohongshu.

“The T03 is the best car you can get in the lower price range,” said Zhang Xiang, an automotive analyst and visiting professor at Henan’s Huanghe College of Science and Technology. 100,000 yuan. “Its features are better than any other model in the low-end market. It just really stands out. ”

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