Leapmotor has reported a significant increase in net profit for the first half of 2026, marking its second consecutive half-year of profitability. While deliveries and revenue surged, the company faced narrowing margins and weaker cash flow, highlighting ongoing challenges amid rapid expansion.
Profitability Rises as Deliveries Surge
Leapmotor‘s net profit for the first half of 2026 reached $31.1M (~AUD 43.5M), a 600% increase from the same period last year. This marks the company’s second straight half-year of profitability, with net profit in the first half of 2025 standing at $4.4M (~AUD 6.2M).
The automaker, backed by Stellantis NV (NYSE: STLA), saw revenue climb 57.2% year-on-year to $5.7B (~AUD 7.9B), driven by a sharp rise in vehicle and spare parts deliveries. Leapmotor delivered 356,487 vehicles in the first half, up 60.8% compared to last year, and reported that it ranked first among China’s emerging auto brands by sales.
Margins and Cash Flow Under Pressure
Despite higher sales, Leapmotor’s gross margin narrowed to 11.7% from 14.1% a year earlier. The company attributed this decline to increased raw material costs and changes in its product mix. Gross profit for the period rose 29.7% to $659.9M (~AUD 921.7M).
Gross margin improved sequentially, reaching 12.6% in the second quarter, up 3.2 percentage points from the first quarter. However, non-IFRS adjusted net profit, excluding share-based payments, fell 18.2% year-on-year to $40M (~AUD 55.9M), indicating that the headline profit growth was partly due to lower share-based payment expenses.
Operating cash flow dropped 24.1% to $321.8M (~AUD 449.5M), while free cash flow fell sharply by 83.7% to $20.8M (~AUD 29M). Leapmotor cited increased procurement spending for inventory stocking as a factor. As of the end of June, the company’s cash and equivalents, restricted cash, time deposits, and certain financial assets totaled $5.7B (~AUD 8B).
Rising Costs and Investment in Growth
Research and development expenses rose 22.8% year-on-year to $344.1M (~AUD 480.5M), reflecting ongoing investment in new technologies and products. Selling expenses increased 41.1% to $295.1M (~AUD 412.2M), mainly due to expanded advertising, promotional activities, and a larger sales team.
Overseas Expansion Accelerates
Leapmotor’s overseas markets have become a key growth driver. First-half exports surged 372.6% year-on-year to 96,294 vehicles, accounting for 27.0% of total sales and already surpassing the full-year 2025 export figure.
Sales Targets and New Model Launches
Leapmotor has set a full-year sales target of 1,000,000 vehicles. By the end of July, the company had delivered 457,754 vehicles, achieving 45.8% of its annual goal. To meet the target, Leapmotor needs to average about 108,449 deliveries per month over the next five months, exceeding July’s record of 101,267.
New models such as the A10, D19, and A05 are expected to help close the gap. In July, the D19 delivered 10,043 units, while the 100,000th A10 rolled off the production line just 135 days after its launch.
Advancements in Assisted Driving
Leapmotor has expanded city navigation assistance across its A, B, C, and D series. The company plans to roll out nationwide city navigation assistance to models based on the LEAP3.0 architecture in the third quarter and introduce a new-architecture assisted-driving solution in September.
Why this matters
Leapmotor’s results highlight both the opportunities and challenges facing China’s emerging EV brands. While rapid sales growth and overseas expansion are driving revenue and profit gains, narrowing margins and weaker cash flow point to the pressures of scaling up in a highly competitive market.
The company’s continued investment in R&D and new models, along with advancements in assisted driving, will be crucial as it seeks to maintain momentum and achieve ambitious sales targets.
What this means for buyers
For consumers, Leapmotor’s strong delivery numbers and ongoing investment in technology suggest a growing product lineup and improved features, especially in assisted driving. However, buyers should be aware that the company’s rapid expansion comes with financial pressures, which could influence pricing, after-sales support, or future updates.
Those considering a Leapmotor vehicle may want to watch for new model launches and updates to assisted driving features in the coming months.
Key Specs
- First-Half Net Profit: $31.1M (~AUD 43.5M)
- First-Half Revenue: $5.7B (~AUD 7.9B)
- Vehicles Delivered (H1 2026): 356,487
- Gross Margin (H1 2026): 11.7%
- Free Cash Flow (H1 2026): $20.8M (~AUD 29M)
- First-Half Exports: 96,294 vehicles
- Cash and Equivalents (End of June): $5.7B (~AUD 8B)
- Full-Year Sales Target: 1,000,000 vehicles
Source
Images sourced from: thecarexpert.co.uk, evpowered.co.uk
