Chinese electric vehicle company Lipmotor has emerged as a rising force this year with explosive revenue growth and soaring stock prices. Once on the periphery of the industry, the company is now credited with establishing its own production base and price competitiveness to outpace startup competitors and lay the groundwork for global market entry.
According to Bloomberg News on the 18th (local time), Lipmotor's stock price listed on the Hong Kong stock market has doubled since January and is up more than 200% compared to its low in August last year. The closing price on the 16th was 65.40 Hong Kong dollars, and analysts expect it to rise to 74.89 Hong Kong dollars within the next 12 months. Lipmotor has adjusted its sales target for this year from 290,000 units last year to 500,000 units and anticipates achieving its first annual surplus.
Lipmotor was founded in 2015 by Chairman Zhu Jiangming and co-founder Fu Riquan in Hangzhou. They had previously co-founded the security camera company Dahua Technology. In the early days of the startup, they lagged significantly behind competitors such as BYD, Xiaopeng, and Li Auto, but they laid the foundation for a leap by shifting to a strategy of maximizing in-house development and production of parts. Currently, about 70% of all components are produced in-house, earning them the nickname 'the cheaper Li Auto.'
The representative model, the C11 sports utility vehicle (SUV), was launched at the end of 2020 and is sold starting at 148,800 yuan (approximately 28 million won). This is more than 100,000 yuan (approximately 19 million won) lower than Li Auto's cheapest model, the L6. Despite the price advantage, it is being evaluated for strengthening its electronic and software competitiveness through features such as infotainment and autonomous driving, moving away from a simplistic low-cost image.
Recently, as the Chinese economy slows, consumers have become price-sensitive, and Lipmotor's mid-range positioning has worked in its favor in the market. In July, the monthly sales volume surpassed 50,000 units for the first time, outpacing all startup competitors. While it still significantly trails behind BYD's sales (340,000 units), it has recorded the fastest growth among startups.
Experts have highly evaluated Lipmotor's vertical integration and price competitiveness. Xiao Feng, an analyst at Hong Kong-based CLSA, noted, "Lipmotor sells large vehicles at mass sales prices," adding, "Considering the product cycle and capital efficiency, there is substantial potential for further rises." Global research firm Third Bridge also analyzed, "Since most components, excluding batteries, are developed and produced in-house, they have strengths in cost management."
However, the challenges ahead are significant. Gary Tan, a manager at Singapore's Allspring Global Investments, remarked, "To gain true competitiveness, Lipmotor must surpass the sales inflection point of 1 million units within China," emphasizing that "expanding various institutional sectors is key." Long-term revenue security is also cited as the key to sustained growth.
For this reason, Lipmotor is seeking growth breakthroughs by expanding into overseas markets. In 2023, it plans to establish a joint venture with European automaker Stellantis to produce and sell some models outside of China. This strategy differs from BYD's approach of building its own factories in Hungary and Turkey, as it aims for rapid global expansion by leveraging local partners. Last year, Lipmotor's overseas exports were about 13,700 units, accounting for approximately 5% of total sales, but future expectations for expanded sales in Europe utilizing Stellantis's network are high.
A source in the industry projected, "The future speed of battery technology and overseas market entry will determine Lipmotor's growth trajectory."