Summary of the Expert Call on China Auto/EV Market Outlook Industry Overview - **Industry**: China Auto/EV - **Focus**: Local demand and exports outlook for 2026E Key Takeaways 1. **Declining Market Demand**: Market demand has been on a declining trend since late October 2025, primarily due to the expiration of national subsidies [1][2][3] 2. **Subsidy Standards**: There is a likelihood of higher standards for subsidies in 2026E to ensure healthy growth, despite anticipated impacts on demand [1][2] 3. **Export Focus**: Exports are expected to become a key focus for Chinese OEMs to mitigate the effects of a potentially muted local market [1][2][10] 4. **Battery and Technology Trends**: The trend towards larger batteries and increased intellectualization in vehicles will be significant as the industry aims for high-quality growth [1][11] Market Dynamics 1. **Order Trends**: Orders have been declining since mid-late October 2025, with a notable slump in November as customers await national subsidies [3][4] 2. **OEM Performance**: Weekly orders for major OEMs have decreased, with BYD at less than 70k units and Geely at less than 30k units for its Galaxy brand [4] 3. **EV Penetration Rate**: The discount ratio for ICE car models is decreasing, leading to a record-high monthly EV penetration rate, expected to exceed 60% in November 2025 [5] Policy Outlook 1. **Tightening Policies**: A tightening policy is anticipated for 2026, with potential continuation of trade-in/scrapping policies until the end of 2027E [6][8] 2. **Subsidy Adjustments**: Future trade-in subsidies may be based on a percentage of the average selling price (ASP) of vehicles, potentially reducing discounts for lower-end models [6][8] Competitive Landscape 1. **Impact of EV Tax Exemption**: The reduction of the EV purchase tax exemption in 2026 may slightly benefit ICE models, while upgraded hybrid cars could challenge low-end PHEV models [9] 2. **Luxury Brand Challenges**: Luxury brands are facing significant challenges, with many BMW dealerships closing and shifting focus towards NEV players [9] Export Strategies 1. **Government Support for Exports**: The Chinese government is encouraging exports, with many OEMs expanding their international presence [10] 2. **Global Market Expansion**: BYD, Chery, and Geely have established over 1,000 shops in overseas markets, while Leapmotor and XPENG are also increasing their international footprint [10] Future Trends 1. **Technological Advancements**: The focus will shift from price wars to technology and platform upgrades, with large-size batteries and advanced intelligent features becoming essential for competitiveness [11] This summary encapsulates the critical insights from the expert call regarding the future of the China auto market, highlighting both challenges and opportunities as the industry navigates through changing demand dynamics and policy landscapes.

一、 订单呈环比下滑趋势 自 10 月中下旬起，订单开始下滑。剔除 10 月底的短期抢购订单后，11 月市场形势进一 步小幅走弱 —— 这一方面因国家补贴额度耗尽，另一方面消费者进入 "观望模式"。 尽管多家车企宣布，若消费者订单无法在 2025 年内交付，将为部分车型承担额外购置 税，但消费者似乎仍在等待国家补贴，因此该举措的积极影响有限。 目前整个市场的新车发布阶段已结束，2025 年剩余时间内预计无更多需求催化剂。 上周各品牌订单情况如下： 比亚迪周订单不足 7 万辆； 吉利银河品牌周订单不足 3 万辆； 零跑汽车周订单超 1 万辆，主要受 Lafa 5 车型上市推动，若剔除该新车因素，其周订单 同样呈环比下滑趋势； ...

Investment Rating - The report does not explicitly provide an investment rating for the automotive industry or specific companies within it [26]. Core Insights - The year-end sales data for major automakers indicates a significant divergence in performance, with the typical "year-end tailwind" being weaker than in previous years. The phase-out of the "two-new" subsidy policies is contributing to a trend of slowing or declining sales growth [8][9]. - BYD's November sales were 480,000 units, down 5% year-on-year but up 9% month-on-month, primarily due to weaker domestic demand. Domestic sales were 348,000 units, down 27% year-on-year. Cumulative sales from January to November reached 4.18 million units, an 11% increase year-on-year [9][10]. - Geely's November sales reached 310,000 units, a 24% year-on-year increase, with cumulative sales of 2.79 million units, up 42% year-on-year, putting its annual target of 3 million units within reach. NEV sales for Geely in November were 188,000 units, a 53% year-on-year increase [9][10]. - Leapmotor exceeded 70,000 units in November, marking a 75% year-on-year increase, with cumulative deliveries reaching 536,000 units, surpassing its annual target ahead of schedule [10][11]. - Xiaomi Auto delivered over 40,000 units in November, maintaining this level for three consecutive months, and raised its full-year delivery outlook to over 400,000 units [12]. - Li Auto's November deliveries were 33,000 units, down 32% year-on-year, with cumulative deliveries of 362,000 units, an 18% decrease year-on-year [13]. - NIO's November sales were 36,000 units, a 76% year-on-year increase, but cumulative deliveries totaled 278,000 units, indicating challenges in achieving profitability in Q4 [14][15]. Summary by Sections Sales Performance - BYD's November sales were 480,000 units, with domestic sales at 348,000 units, reflecting a significant year-on-year decline [9][10]. - Geely's sales performance showed strong growth, particularly in NEVs, with a notable increase in overseas exports [9][10]. - Leapmotor and Xiaomi Auto demonstrated robust sales growth, exceeding their targets [10][12]. Market Dynamics - The automotive market is experiencing a reshuffling of sales rankings, with leading new energy vehicle (NEV) players facing slowing growth [10][11]. - The competitive landscape is intensifying, with companies needing to balance volume and profitability as subsidies phase out [15].

Core Insights - Leap Motor has launched its A10 model at the Guangzhou Auto Show, following the pre-sale of its Lafa 5 model, indicating a strategic push for increased sales in overseas markets to achieve its goal of selling one million vehicles by 2026 [2][3] Product Launch and Features - The A10 is positioned as a "smart boutique long-range SUV" with a range of 500 km (CLTC), powered by dual flagship chips (Qualcomm 8295P + 8650), and features full-scene intelligent assistance from parking to driving [2] - The A10 will be the first model under 100,000 yuan to feature LiDAR technology, following the earlier launch of a LiDAR-equipped model under 150,000 yuan [2] Target Market and Consumer Appeal - The A10 is aimed at young consumers, incorporating trendy and personalized elements, which aligns with Leap Motor's A series targeting this demographic [3] - The introduction of the A10 is expected to expand Leap Motor's user base and support its sales target of one million vehicles by 2026, particularly in the European market where such boutique cars are well-received [3] International Expansion and Sales Strategy - Leap Motor has established over 1,700 sales and service outlets globally, with nearly 800 located overseas, indicating a strong international presence [3] - The company is focusing on localizing production, with a project in Malaysia for the C10 model and plans for similar initiatives in Spain [4] - The B series models are being developed for global markets, with specific configurations tailored to different regions, and the B10 model is currently being promoted in Europe [4] Future Outlook - Leap Motor plans to launch several models, including the B10, B01, Lafa 5, and A10, in overseas markets by 2026, which will be crucial for achieving its sales targets [4] - The performance in international markets will significantly impact the company's ability to meet its one million vehicle sales goal, although consumer acceptance remains to be seen [4]

Investment Rating - The report maintains a "Buy" rating for the company with a target valuation of HKD 110 billion, corresponding to a 20x P/E for 2026 and 0.9x P/S for 2026, with a target price of HKD 77 [4][6]. Core Insights - The company has shown strong growth in both domestic and international markets, with Q3 sales reaching 174,000 units, a year-on-year increase of 102%, leading to a revenue growth of 97.3% to CNY 19.45 billion [1][2]. - The gross margin improved to 14.5%, up 6.4 percentage points year-on-year, attributed to scale effects, product mix optimization, and ongoing cost management [1]. - The company aims for a sales target of 1 million units and a profit of CNY 5 billion by 2026, supported by new model launches and an expanding sales network [2][4]. Sales and Revenue Growth - Q3 sales included 17,397 units exported and 156,000 units sold domestically, with the newly launched B01 model achieving over 10,000 deliveries for three consecutive months [2][3]. - The company plans to introduce four new models by 2026, enhancing its product lineup across various price segments [2]. International Expansion - The company is the leading new force in exports, with Q3 exports totaling 17,397 units and a cumulative export of 37,772 units for the first three quarters [3]. - Strong overseas demand is evident, with October orders reaching 12,000 units and expected to exceed 15,000 units in November [3]. - The company has established over 700 sales and service points across 30 international markets, with plans for local production in Malaysia and Europe by 2026 [3]. Financial Projections - The company forecasts sales of 610,000, 1,020,000, and 1,320,000 units for 2025, 2026, and 2027, respectively, with projected revenues of CNY 67.54 billion, CNY 112.95 billion, and CNY 151.02 billion [4][5]. - Expected net profits for 2025, 2026, and 2027 are CNY 1 billion, CNY 5.07 billion, and CNY 11.28 billion, respectively, with net profit margins improving to 1.5%, 4.5%, and 7.5% [5][12].

Core Viewpoint - Leap Motor continues to show strong growth, achieving record revenue and significant sales increases in Q3 2025, driven by product launches and expanded sales channels [1][2][4]. Financial Performance - In Q3 2025, the company reported revenue of 19.45 billion yuan, a 97.3% increase from 9.86 billion yuan in the same period of 2024, and a 36.7% quarter-on-quarter growth, marking a new quarterly revenue high [2]. - The net profit attributable to the parent company reached 150 million yuan, a turnaround from a loss of 690 million yuan in Q3 2024, with a gross margin improvement to 14.5%, up from 8.1% year-on-year [7]. Sales and Delivery - The company delivered 173,900 vehicles in Q3, a year-on-year increase of 101.77% and a quarter-on-quarter increase of 29.63%, maintaining its position as the sales leader among new energy vehicle manufacturers for eight consecutive months [2][4]. - Leap Motor has set an ambitious sales target of 600,000 vehicles for the year, having already achieved its initial goal of 500,000 vehicles ahead of schedule [4]. Product Strategy - The growth in sales is attributed to the launch of multiple new models, including the C11 and B01, with the latter achieving over 46,700 cumulative deliveries by the end of October [4]. - The company is expanding its product lineup across four major series, with new models like the Lafa 5 and D19 set to debut soon [4]. Market Expansion - As of September 30, the company has expanded its sales and service network to cover 292 cities, an increase of 88 cities year-on-year, with 866 sales stores and 499 service centers [5]. - Leap Motor is also accelerating its international expansion, with over 700 stores established in approximately 30 international markets, and aims for overseas sales of 100,000 to 150,000 vehicles next year [6][9]. Research and Development - The company invested 1.21 billion yuan in R&D in Q3, a 55.4% increase year-on-year, focusing on automotive electronics, new product development, and future technology reserves [7].

Core Insights - Leap Motor is rapidly expanding its user base and targeting younger consumers with its new electric sedan, Lafa 5, which is set to launch soon [1][2] Product Launch and Market Strategy - Lafa 5 is available for pre-sale with five models priced between 105,800 and 131,800 yuan, aimed at the young, personalized electric vehicle market [3] - The vehicle was showcased at the Munich Auto Show, where it garnered significant attention, achieving a test drive conversion rate of 38% [3] - The design of Lafa 5 was a collaborative effort between Leap Motor's design centers in Shanghai and Munich, the latter being the company's first overseas design center [3] Design and Features - The Lafa 5 is built on the LEAP 3.5 architecture B platform, featuring a hatchback and coupe design, with a low drag coefficient of 0.256 [4] - It offers two battery options with CLTC ranges of 515 km and 605 km, and can achieve 30%-80% fast charging in 18 minutes [5] - The vehicle is equipped with Qualcomm 8295P chips and laser radar, supporting 26 advanced driver-assistance features [5] Sales Expectations and Future Plans - The company aims to sell over 10,000 units monthly, with a balanced sales distribution between domestic and international markets in the long term [6] - Leap Motor plans to expand its product lineup with four series (A, B, C, D) and the Lafa model, targeting a production capacity of 2 to 3 million units [6] - In October, Leap Motor delivered 70,289 vehicles, setting a new record for monthly deliveries among new energy vehicle companies, with a total of over 465,000 units delivered this year [6]

Core Viewpoint - Leap Motor has officially launched the pre-sale of its new pure electric sedan, Lafa 5, with a price range of 105,800 to 131,800 yuan, and plans to enter the global market starting next year [2] Group 1 - The Lafa 5 will be available in five different models and is expected to be officially launched by the end of this month [2] - Leap Motor's Senior Vice President, Cao Li, stated that the approach to developing the Lafa 5 is significantly different from their first attempt at a sports sedan six years ago [2] - The company now has 1 million users, allowing them to better understand customer preferences and needs, moving from a focus on practicality to addressing personalized demands [2]

Core Insights - Leap Motor is expanding its market presence by entering the personalized automotive sector with the launch of the Lafa 5, a pure electric sports sedan [2][4] - The Lafa 5 is priced between 105,800 to 131,800 yuan and will officially launch on November 28, 2023, with plans for global market entry by 2026 [2] - The company has reported strong sales growth, achieving nearly 470,000 units sold in 2025 and a significant revenue increase of 174% year-on-year [3] Group 1: Product Launch and Features - The Lafa 5 offers five configuration versions with CLTC ranges of 515 km and 605 km, featuring an 800V high-voltage architecture and Qualcomm 8295P chip [2][5] - The vehicle's dimensions are 4430mm in length, 1880mm in width, and 1520mm in height, with a wheelbase of 2735mm [2] - The introduction of the Lafa 5 signifies Leap Motor's strategic shift towards personalized vehicles after establishing a foothold in the mainstream market [3][6] Group 2: Market Strategy and Brand Development - Leap Motor aims to enhance its brand image, moving away from being perceived as a budget alternative to a more premium offering [3] - The company has launched the D platform and the D19 flagship SUV, marking its entry into the luxury market segment [3] - The rise of the Z generation as a key consumer group has prompted Leap Motor to focus on personalized designs that resonate with younger buyers [4] Group 3: Global Expansion and Technological Integration - Leap Motor's global strategy includes establishing over 600 sales and service outlets in approximately 35 international markets, with a focus on Europe [5] - The Lafa 5's competitive pricing is supported by the company's in-house research and development capabilities, allowing for advanced features typically found in higher-priced models [5][4] - The transition from mainstream to personalized vehicles represents a significant evolution in Leap Motor's business strategy, indicating a shift from survival to differentiation in the market [6]

Core Viewpoint - The article discusses the evolution and current state of the "new forces in car manufacturing" in China, particularly focusing on the "Four Little Dragons" (NIO, Xpeng, Li Auto, and Leap Motor) and their journey towards profitability amidst a competitive market landscape [4][6][14]. Group 1: Industry Overview - The term "new forces in car manufacturing" was once a positive label, but over time, it has lost its luster due to various challenges and negative perceptions in the industry [4][6]. - The current market is characterized by intense competition, leading to a significant number of failures among new entrants, with notable companies like WM Motor, Aiways, and others falling off the radar [18][20]. Group 2: Performance of the "Four Little Dragons" - NIO has made significant strides towards profitability, with successful sales of its new models, the L90 and the new ES8, indicating a potential turnaround [9][10]. - Xpeng, despite facing challenges from price wars, has managed to maintain a solid sales base and is expected to achieve profitability in the near future [12]. - Li Auto, having been the first among the new forces to achieve profitability, is currently navigating some difficulties but is expected to return to a profitable trajectory [14]. - Leap Motor has emerged as a surprising leader in sales, with a delivery volume exceeding 66,000 units in September, showcasing its effective market positioning [14]. Group 3: Future Challenges and Opportunities - The article emphasizes that the upcoming period will be critical for the "Four Little Dragons" as they transition from survival to thriving in a competitive environment [7][15]. - The need for precision and efficiency in product launches and marketing strategies is highlighted, as the market becomes increasingly unforgiving [15]. - The potential for revival among previously failed companies, such as WM Motor and Neta, indicates that the market still holds significant opportunities despite the challenges [22][26]. Group 4: Conclusion and Reflection - The article concludes that the new forces in car manufacturing must bid farewell to their past struggles to embrace a more promising future, suggesting a shift in focus towards sustainable growth and innovation [27].