(Yicai) Jan. 4 -- Chinese new energy vehicle startup Leapmotor Technology missed last year’s annual sales target and reported a lower sales growth rate than the industry average.

Leapmotor sold 144,200 cars last year, reaching only 72 percent of its 200,000 units target, the Hangzhou-based company announced on Jan. 1. The figure grew only 29 percent from the year before, compared with the China Association of Automobile Manufacturers’ industry average prediction of 37 percent. In the first 11 months of last year, NEV sales soared 35 percent from a year earlier, CAAM data showed.

As more smartphone makers enter China’s NEV market, the competition grows stronger and stronger, with the price war still ongoing, industry insiders said.

China’s NEV penetration rate exceeded 30 percent, with the figure being above 50 percent in some cities, Lin Jiayi, chief executive of Guangzhou Xuanjia Information Technology, told Yicai. The policy support and rapid capital inflow to the NEV market disrupted healthy competition, so there are no prospects of profit expansion in the market, Lin added.

Leapmotor’s gross profit margin turned positive for the first time in the third quarter of last year, even though the company is expected to have lost an average of about CNY30,000 (USD4,200) for each car it sold last year.

In the three months ended Sept. 30, Leapmotor reported a gross profit margin of 1.2 percent, compared with minus 8.9 percent a year earlier. Its net loss shrank 26 percent to CNY986 million (USD138.5 million) in the period.

Like Xpeng Motors and Nio, two other Chinese NEV startups, Leapmotor has also gained overseas investment.

Stellantis announced on Oct. 26 last year that the European owner of brands Peugeot and Maserati would acquire about 21 percent of Leapmotor for EUR1.5 billion (USD1.6 billion), becoming the Chinese firm’s second-largest shareholder.

Editor: Futura Costaglione