How this Chinese brand produces electric cars for less than $700 each: Leapmotor reveals how it looked to BYD to cut production price of EVs in China and Europe: Reports

Leapmotor shocked the Australian car world when it announced local pricing for its Tesla Model Y competitor, the C10 electric SUV.

Priced at just $45,888, before on-road costs (more than $10,000 cheaper than the starting price of Australia's top-selling electric car, the Model Y) many pundits were left scratching their heads as to how Leapmotor could offer an electric SUV at such a relatively low price.

Now, the brand has revealed its approach.

According to CarNewsChina, Leapmotor has modelled its entire manufacturing process on BYD's signature method of vertical integration.

That means the technological development and manufacturing – including vehicle parts – is largely carried out in-house, meaning less money is spent on suppliers.

Not only has that approach propelled BYD to become the world's second-largest and fastest-growing EV producer, its a move that has put Leapmotor in the driver's seat as it eyes a full-frontal expansion into western markets.

Last year, Euro-American auto conglomerate Stellantis purchased a 20 per cent stake in the company. Since then, it has established Leapmotor International, the business now shipping cars to 13 countries in Europe, as well as Australia.

Stellantis owns a 51 per cent stake in the brand’s international arm, and has started producing the T03 in Poland. The cut-price fully-electric compact city car has a 37.3kWh battery pack and a claimed 395km of WLTP-rated urban range.

It will, reportedly, be produced at an estimated cost of between €400 to €500 ($652 to $816), roughly what it would cost to produce the same vehicle in China and less than half the cost to produce it in Italy. In the UK, the T03 has been announced with a starting price of just £15,995 ($31,368).

There’s no word on whether that model will come to Australia, but Leapmotor hasn't been shy about its ambitions to grow its offerings in the Australian market.

The local line-up could eventually include the T03, along with the B10 compact SUV, the C01 sedan and possibly the C16 family SUV.

That said, price is one thing, while performance is another. The Leapmotor brand remains largely untested in Australia, so we will have to wait and see how the C10 sells locally before we get too carried away with a potential future local line-up.