Text | Qingcheng Finance
As soon as 2025 began, China’s new energy vehicle market opened the main theme of competition for the new year early – national intelligent driving. BYD’s “Eye of God” intelligent driving system has entered the 70,000-level model. Huawei Yu Chengdong publicly questioned the safety of intelligent driving that “can be used just because of it”. Changan, Geely and other car companies have announced the “intelligent driving equal rights” strategy.
In this melee of wisdom in the whole nation,Leapmotor seems extremely low-key – this oneWith the ultimate cost-effectiveness, under the halo of double sales and positive quarterly profits in 2024, the lag of intelligence, especially intelligent driving capabilities, is becoming its biggest strategic hidden danger in 2025.
“From “From “From ” Price of “From ” Price of “
Zero Run’s 2024 results are very impressive. It has hit a new sales high for seven consecutive months. Since March 2024, Zero-Player’s delivery volume has been rising steadily, exceeding 20,000 units for the first time in June, exceeding 30,000 units for the first time in August, and exceeding 40,000 units for the first time in November and December. At this point,Zero Run surpassed the industry and became the second largest sales force in the new industry, second only to ideals.
With the increase in sales and scale, the financial situation continues to improve. Not long ago, Leapmotor released a preview saying that it expects operating income to be no less than 30.5 billion yuan in 2024, a year-on-year increase of no less than 80%. Although the overall situation is still in a loss state, the losses continue to narrow, and the net profit turned positive in the fourth quarter, achieving a single-quarter profit target one year ahead of schedule.After Tesla, BYD, Ideal and Cialis, Leapmotor has become the fifth profitable new energy vehicle company.
The outbreak of Zero-Player last year was mainly due to the “replica” of the new leader Ideal Auto, which also bets on the extended range route, aims at home users, focusing on comfort and large space; but the more core reason is itsThe ultimate cost-effectiveness brought by high-end and low-price.
Taking the main sales model Zero Racing C11 as an example, the entire series adopts a four-leaf clover central integrated electronic and electrical architecture, equipped with high-end configurations such as Qualcomm 8295 chip, Nvidia Orin-X chip, and 30 high-precision sensing hardware such as lidar. The price of the extended-range version is 135,800-172,800 yuan, which is about half the price of the ideal lowest-end model L6.Leap Run also won the title of “half-price ideal”.
However, the winning magic weapon of Zero Run “Check Price” is facing huge tests in 2025. The general manager of a sales company of a domestic auto company recently stated that in the past few years, car companies will take the initiative to reduce prices officially, improve product cost-effectiveness, expand or maintain sales volume; but by 2025, the guiding price has shown signs of “no reduction” and most auto companies may use the means of price insurance and increase allocation, and standard equipment for high-end intelligent driving to enhance product competitiveness.
*Photo source BYD press conference
On February 9, Deep Blue Auto fired the first shot and held a full-scene intelligent driving solution launch conference; then, on February 10, BYD threw out a “nuclear bomb” and officially released the advanced intelligent driving system “Eye of the Gods”, which will cover all models. The first batch of 21 models will be launched, including 70,000 to 200,000, which directly shocked the entire industry; Geely and Chery are also expected to release AI and intelligent driving solutions in March; on February 25, the long-rumored Tesla FSD entry into China is about to come true, announcing that software will be updated in batches for Chinese customers, which may further accelerate the implementation of high-level intelligent driving in China.
The smart driving system has been on the car for several years, but it was previously mainly promoted by new car companies such as Xiaopeng, Wenjie, and Ideal, and the product price is mainly concentrated at more than 200,000 yuan. Statistics from Gass Automobile Research Institute show that from January to November 2024, the cumulative standard configuration of intelligent pilot driving systems in the domestic passenger car market reached 1.75 million units, and in the market below 200,000 yuan, the penetration rate of pilot systems was only 0.9%.
Nowadays, with traditional car companies with larger scales such as BYD and Geely, they have successively shouted the slogan of “people’s smart driving”, especially BYD has reduced its high-end smart driving system to 5,000 yuan at the lowest cost, and the price of equipped models has dropped to 70,000 yuan. This will surely subvert the competition rules in the main market below 200,000 yuan – from the price of the volume to the price of the volume.BYD Chairman Wang Chuanfu asserted: “Models without smart driving will be regarded as backward products.”
“18 months of smart driving technology generation gap”
Zero Racing obviously realized the urgency and recently announced its smart driving plan: to achieve national coverage of urban expressway and elevated NAP (pilot assisted driving) functions in the first quarter of 2025, covering models including Zero Racing C10, C11 and C16, all equipped with lidar. also,Leapmotor also plans to launch high-end intelligent driving functions in urban areas in the second half of 2025, andPush it to users through free OTA upgrades.
*Picture source zero run
The new Leapmotor B10, which will be launched next month, is the leading work of Leapmotor in 2025. It also focuses on smart driving, equipped with lidar and urban smart driving, reducing the entry price of the end-to-end smart driving system to less than 150,000 yuan, trying to reshape the market structure of compact new energy SUVs.
Zhu Jiangming, chairman of Leapmotor, said boldly that “intelligent driving will enter the first echelon in 2025.”It seems ambitious, but it is full of challenges. Industry experts said that when Huawei ADS 3.0 and Xiaopeng XNGP have achieved urban leadership, Zero Racing’s smart driving is still at the L2+ level. Zero Run’s current smart driving solution has an 18-month technical generation gap with leading enterprise-free cities NOA.
It is understood that the Leapmotor Pilot 4.0, currently equipped with the main model of Zero Racing, relies on high-precision map solutions and currently only covers highways and elevated roads in some cities.Due to the high cost of making high-precision maps and the problem of insufficient data update, its user experience and coverage have been beaten by friendly businessmen’s Wisdom Driver Solutions.
“It clearly has good hardware, but the software and algorithms are behind the times. At the moment when end-to-end, no-picture smart driving is popularized in the entire industry, Zero Racing’s smart driving level can be said to be seriously behind the times. As for the current actual performance of Zero Racing Smart Drive, Uncle Mao believes that the Zero Racing Smart Drive version model is not worth adding more money, so just buy the mid- and low-end models.” Uncle Mao complained online by the owner of the Leapmotor C10 smart driving version. There is data showingDue to poor experience, the user activation rate of high-speed NOA of Zero Run in 2024 is only 37%, 21 percentage points lower than the industry average of 58%.
Compare with peers. In April 2024, Huawei released ADS 3.0, adopting an end-to-end large model, shifting from “high-precision map” to “no map” solution, which has improved the urban generalization speed and update frequency of smart driving solutions. In August, with the release of Xiangjie S9, ADS 3.0 was mass-produced and commercialized. Xiaopeng moves very quickly too. In May 2024, Xiaopeng Motors held a 520 AI DAY press conference, announcing the full push of AI Dimensity system to users, and released the first end-to-end big model to mass-produced in China. In October, the P7+ first launched Xiaopeng AI Hawkeye Vision solution, paired with end-to-end big model, the entire series is equipped with high-end smart driving standard, and can be used nationwide when delivered. This is also the first time that high-level smart driving has been expanded into the market below 200,000 yuan.
Zhu Jiangming admitted thatAt present, there is a gap between Leapmotor and his competitors in terms of smart driving, with about 6-12 months of engineering research and development time.
“The awkward balance between low gross profit and high investment”
It is not easy to catch up with Zhihua. It is a comprehensive war involving computing power, algorithms, data, teams and supply chains. All of these require huge investment. He Xiaopeng, chairman of Xiaopeng Motors, once said that end-to-end big models will lead to an increase in the threshold for smart driving because it requires more money, more computing power, and more data to implement.
In 2024, Tesla announced that it would invest US$10 billion (about RMB 72.4 billion) in the field of autonomous driving, and also deployed tens of thousands of Nvidia H100 GPU clusters, with the world’s highest level of 100EFLOPS computing power. Since Huawei entered the automobile industry in 2019, it has accumulated more than 30 billion R&D investment. Although Xiaopeng has not yet made a profit, its investment in technology research and development will also reach 7 billion yuan in 2024, of which more than 3.5 billion yuan is related to AI and smart driving, and will increase to 4.5 billion yuan in 2025.
BYD’s “sudden explosion” this year was also due to “powerful miracles”. Wang Chuanfu publicly stated in 2023 that “unmanned driving is nonsense”, but in January 2024, Wang Chuanfu completely changed his attitude and announced a comprehensive shift to self-development of smart driving, planning to invest 100 billion yuan in intelligent research and development, and the personnel scale has also expanded sharply from 500 people in 2023 to about 5,000 people now, becoming the largest smart driving team in China.
Although Leapmotor has always emphasized self-development of technology, there is still a considerable gap between the leading automakers in R&D investment.According to financial data, from 2019 to 2023, Leapmotor’s cumulative R&D expenditure was only 4.7 billion yuan in five years, and R&D investment was 2.37 billion yuan in 2024, but 72% of the funds were used for compatibility transformation of old platforms, and only 28% were invested in R&D of new architectures. In terms of talent reserves, the scale of the Zero Run Intelligent Driving Team has expanded from 200 people at the end of 2023 to about 500 people by the end of 2024. Huawei, BYD and Xiaopeng all have thousands of smart driving teams, 6 to 10 times that of Zero Run.
Zero Run naturally wants to invest heavily, but it also needs to make a delicate balance between micro-profits and high investment. Ultra-low profit margins become the Achilles heel of Zero-Play Automobile. According to financial report data, Leapmotor’s gross profit margin was only 0.48% in 2023. Although it increased by more than 7.5 percentage points in 2024 to 8%, it is still much lower than the gross profit margin of competitors such as Ideal and Cialis, which is as high as 20%.
What’s worse,Leap Run is also facing heavy pressure from a price war.After a fierce showdown in 2024, the price war is expected to continue this year. With its scale advantages and cost control capabilities, BYD has significantly reduced the price of smart driving models and has entered the market below 100,000, directly impacting the main market of Zero Racing. The strategy of intelligent driving in all models standard has forced Leapmotor to fall into the passiveness of “adding additional equipment but not price increase”.
“Technical catch-up requires money, but Zero-Pyram’s profit margin has been compressed to its limit by price wars.”Some industry analysts said this.
*Photo source BYD press conference
CITIC Securities Research Report pointed out that the sales of new passenger cars equipped with pilot driving solutions in 2025 are expected to reach 5 million, with a corresponding penetration rate of over 20%, and is expected to increase by 60%-100% in 2026 compared with 2025. Having urban NOA capabilities has become an industry consensus. If Zero Run wants to break through, it needs to break through in many aspects such as capital blood transfusion, making up for technical and data shortcomings, and the premise of all this is that Zero Run mustFinding a balance between “low price and volume” and “technical investment”——In 2025, there is not much time left for it.
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