Gasgoo Munich- Leapmotor is reportedly planning to launch a second brand in 2027, targeting the premium market above 300,000 yuan, according to industry sources. Teasing and the official launch could begin as early as late 2026.Multiple independent sources indicate the new brand will operate a sales network separate from Leapmotor's existing channels. Internally, it is expected to fulfill a strategic role similar to Lexus within Toyota or Denza within BYD. As of now, Leapmotor has not publicly commented on the report.In 2025, Leapmotor delivered its best performance in company history. Annual deliveries reached 596,600 units, topping the rankings among new EV brands. Revenue reached 64.73 billion yuan, a 101.3% surge. The company posted its first annual profit with net income of 540 million yuan. Once an under-the-radar player, Leapmotor has become a force to be reckoned with in China's EV sector.Behind these figures lies a telling detail: Leapmotor made roughly 905 yuan in net profit for every vehicle sold in 2025. This suggests its path to sales leadership wasn't built on high premiums, but on extreme economies of scale and rigorous cost control.Once an automaker cracks the code on profitability through high volume and thin margins, the inevitable question arises: Is it time to move upmarket? And does it have the confidence to pull it off?Why Move Upmarket?Why would a top-selling new force with nearly 600,000 annual sales choose to challenge an unfamiliar premium segment? The answer lies in Leapmotor's current operational reality.The most direct driver is the need to optimize its profit structure. Leapmotor's 540 million yuan net profit in 2025 may not be massive in absolute terms, but it represents a significant breakthrough for a sector long plagued by losses. Broken down per vehicle, those 596,600 deliveries translate to just 905 yuan in profit per car.Image Source: LeapmotorAs a company committed to cost-based pricing, Leapmotor's main brand carries a lower average price, naturally limiting profit margins by design. While achieving profitability through scale is a remarkable feat, Leapmotor is clearly not content to stop there. It has both the intent and the capacity to push per-vehicle profitability to higher levels.This ambition aligns clearly with Leapmotor's 2026 targets: a dual goal of 1 million sales and 5 billion yuan in net profit. To grow net profit from 540 million to 5 billion yuan while expanding scale requires a structural increase in per-vehicle value.This isn't a problem solved simply by selling more cars; it requires higher-value products to unlock new profit zones. Put simply, Leapmotor has the scale—now it needs to build premium pricing power on top of it.This brings Leapmotor face-to-face with a reality about its main brand: the perception it built in the mass market is both armor and a boundary.For years, Leapmotor has adhered to a "cost-based pricing" strategy—offering quality without the premium tag. This has cemented a solid image among consumers: Leapmotor is synonymous with "high value for money." This positioning allowed it to dominate the 100,000 to 200,000 yuan market, but every brand positioning has its price ceiling.Whether consumers would accept a vehicle wearing the Leapmotor badge priced above 300,000 yuan is a delicate question. Rather than forcing the main brand to struggle against existing perceptions, launching a separate brand to capture high-end demand makes sense. It respects the main brand's positioning and is a rational move at the architectural level.In sum, moving upmarket is not a whim born of easy times. It is a natural strategic extension following the successful validation of its profitability model—driven by the need to optimize profit structure, hit operational targets, and respect the laws of branding.Where Does the Confidence Come From?Clear motives aren't enough to crack the premium market. The key to judging Leapmotor's odds lies in the cards it holds to support this strategic shift.The most fundamental confidence comes from financial stability. In 2025, Leapmotor delivered 596,600 vehicles, up 103.1% year-on-year, doubling sales for the second consecutive year. Revenue climbed 101.3% to 64.73 billion yuan, while gross margin hit a record 14.5%. By the end of 2025, it held 37.88 billion yuan in cash, maintaining positive operating and free cash flow.For an automaker gearing up to launch a second brand, ample cash reserves and steady cash generation provide a crucial strategic buffer. Leapmotor doesn't need to rush its premium push while cash-strapped, nor sacrifice long-term strategic layout for short-term gains. Unlike many peers forced to pivot under pressure of losses, Leapmotor is entering this battle with profits and cash flow in hand—a fundamental difference.Beyond this financial cushion, Leapmotor holds an often-underestimated advantage: a decade-long commitment to full-domain self-development.This refers to the in-house design and manufacturing of 65% of core components, covering electric drivetrains, batteries, domain controllers, lights, and seats. The path required heavy upfront investment with slow returns, drawing skepticism for years. But today, the compounding effects are visible—it has given Leapmotor superior cost control and system-level integration capabilities.Image Source: LeapmotorThe LEAP 3.5 architecture, released in 2025, builds on LEAP 3.0 to achieve deep software-hardware integration. At its core is the "Clover" integrated central domain control architecture, enabling fused control of the cabin and driving functions. Additionally, the 800V high-voltage platform and CTC 2.0 battery-chassis integration technology have entered mass production.The significance of these achievements is that Leapmotor doesn't need to play catch-up to go premium; it already possesses the hardware foundation to support high-end vehicles.A third layer of confidence comes from an atypical dimension: an early move into globalization. Leapmotor International, a joint venture with Stellantis, created a new model of "Chinese technology plus overseas localization." Industry observers view this partnership as a benchmark for Chinese automakers expanding abroad.According to Gasgoo Automotive Research Institute, Leapmotor now covers 35 countries and regions across Europe, the Middle East, Africa, Asia-Pacific, and South America, with over 1,800 global sales and service outlets (more than 800 overseas). The plan for 2026 is to expand overseas outlets to over 1,000. Export targets stand at 100,000 to 150,000 vehicles for 2026, alongside localized production at plants in Zaragoza, Spain, and Malaysia.Even more noteworthy, Leapmotor's overseas operations are already profitable. Globalization brings more than just volume; it validates capability. Successfully adapting products, building channels, and serving users across multiple markets is proof of comprehensive corporate strength. For a brand preparing to challenge the premium segment, this cross-market operational experience subtly adds a premium and international aura.Image Source: LeapmotorTurning to product readiness, Leapmotor plans to launch four new models in 2026 focusing on the A and D series: the A05, A10, D19, and D99. The D series is tasked with the strategic mission of moving the brand upmarket. The D19 is positioned as a full-size tech-luxury SUV offering both range-extended and pure electric powertrains. The D99 is Leapmotor's first mid-to-large tech-luxury MPV, equipped with flagship features like dual-chamber air suspension and CDC variable damping.According to Gasgoo, these models continue Leapmotor's "high-spec, low-price" competitive strategy, leveraging segment-leading configurations and high value for money to drive competitiveness.The D-series launch serves as a natural extension of the main brand into the 200,000 to 300,000 yuan price band, while also scouting the terrain for the second brand's premium push. Instead of diving straight into the deep end above 300,000 yuan, Leapmotor is using the D-series to establish a presence near the premium segment and accumulate experience in R&D, delivery, and service. This gradual approach is far safer than a leap into the deep.Viewed together, these four assets suggest Leapmotor's premium move is not an unprepared gamble, but a calculated ascent as conditions mature. Financially, it can afford trial and error; technologically, it starts from strength, not scratch; globalization provides brand momentum; and products are inching closer to the target zone. What supports its upward move isn't dominance in a single dimension, but a comprehensive competitiveness forged over time.Challenges Are Steep, but a Path ExistsOf course, looking from the cards to the table reveals that Leapmotor's challenges are just as real and concrete. The market above 300,000 yuan is not uncharted territory, but a highly mature battlefield. Only by facing these challenges can we accurately assess where Leapmotor's path to breakthrough lies.The foremost challenge is the leap in brand perception. Leapmotor's identity as "high value for money" is deeply ingrained in consumer minds. With an average selling price of around 100,000 yuan in 2025, the main brand has long cultivated the mass market. Bridging the gap to the 300,000 yuan-plus premium tier requires more than closing a price difference; it demands a complete reconstruction of consumer perception: why would a customer pay 200,000 yuan more for a brand born from the mass market?The answer won't emerge naturally from a single launch event or product; it requires a long-term, consistent delivery of value.Meanwhile, the incumbents in the premium market are formidable. The German giants (BBA) possess decades of brand equity and heritage. Li Auto secured a large market share by precisely targeting family scenarios. AITO built a unique narrative backed by Huawei's technology. NIO created difficult-to-replicate user stickiness through its service system. Every top player has found an irreplaceable differentiator and built their own moat.As a latecomer, Leapmotor faces a battlefield that cannot be won simply with "better specs." It must find its own equally irreplaceable value proposition in this crowded track.It must also be recognized that cultivating a premium brand is never an overnight task. Automotive history proves this repeatedly: Lexus took 11 years to truly establish itself in the U.S., while Denza required over a decade of exploration and investment to achieve stable sales.Building a premium brand isn't complete with the launch of a good product; it requires the simultaneous construction of exclusive channels, service systems, and user operations. Every link is a long-term project, testing not just capital strength but management's strategic patience.Pressure on resources is equally significant. The main brand is sprinting toward a million sales to secure its mass market position, while the new brand must build a product matrix, exclusive channels, and service systems from scratch. Advancing on two fronts places high demands on team capability, organizational efficiency, and resource allocation. Defending the base while expanding upward is a heavy lift for any company.Any one of these challenges alone would give pause. But a closer look reveals that Leapmotor is not facing them empty-handed.Regarding brand perception, Leapmotor does not intend to force its main brand into the premium segment but has chosen a separate brand to carry the task. This borrows from the industry's most mature experience: Toyota doesn't sell Lexus at Corolla prices, and BYD doesn't let its Dynasty series directly target Denza. An independent brand is, in itself, a respect for the boundaries of consumer perception.In terms of competitive landscape, Leapmotor's differentiator is already faintly visible. Its full-domain self-development and extreme cost control give it a unique competitiveness even in the premium market: "segment-leading specs at a restrained price."Market feedback on the D19—which saw over 10,000 firm orders in its first week—suggests one thing: premium consumers aren't solely brand-conscious; they are equally sensitive to whether the product itself is worth it. If Leapmotor can translate its "high-spec, low-price" logic into the premium market, it may well find its own differentiating space.Image Source: LeapmotorLooking at the time dimension, unlike many new forces forced to explore premiumization while in the red, Leapmotor has achieved full-year profitability with positive operating cash flow and ample funds. As Leapmotor Vice President Li Tengfei noted, the company has crossed the threshold of "survival"—the next challenge is learning how to "thrive."This means it has the capacity to absorb trial-and-error costs and the patience to wait for brand perception to grow naturally over the long cycle of brand building. That composure is something players still struggling below the break-even line simply do not possess.On the technology front, Leapmotor is accelerating efforts to close the gap. It has designated 2026 as the "Year of Intelligent Driving," focusing on the mass adoption of nationwide city navigation-assisted driving. Gasgoo notes that the LEAP 3.5 architecture's Qualcomm dual-chip solution provides the hardware foundation for high-end intelligent driving support. Leapmotor plans to complete L3 functional upgrades within the year to catch up with industry leaders. Improved intelligent driving capability is precisely the most critical entry ticket for premium market competition.Thus, on Leapmotor's road to the premium market, challenges and the conditions for breakthrough coexist. The challenges are objective and unavoidable. Yet Leapmotor's tools to address them are not imagined; they are grown from years of accumulation in financial foundations, self-developed systems, global layout, and economies of scale. These two threads intertwine to form the true backdrop of this upward brand exploration.
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