Chinese automaker Seres and tech giant Huawei have patched up their partnership, signing a new five-year agreement on the future of the Aito brand just days after reports of a split sent shares tumbling. The reconciliation, reported by Chinese outlet Huxiu, comes after a brief separation that exposed the fragility of Huawei's 'no-car-making' model and the financial strain on its manufacturing partner.
The market's reaction was swift. When news of a possible split emerged, Seres' stock price plunged on September 15, reflecting investor fears that Aito's premium positioning depends heavily on Huawei's brand and technology. According to Huxiu, 66.8% of Aito buyers cited the Huawei brand as a key purchase factor, and 87% of Aito M7 orders were swayed by Huawei's driver-assistance technology. Within 38 weeks of the split announcement, orders for Huawei's Harmony Intelligent Mobility (HIMA) vehicles fell from 8,650 to 6,150 units, a drop of nearly 29%.
For Seres, the split was a bid for financial survival. The company reported revenue of 57.49 billion yuan (about $8.1 billion) for the first half of 2026, down 7.87% year-on-year, with a net loss of 1.717 billion yuan (about $242 million). That swing from a profit of nearly 3 billion yuan to a loss of over 1.7 billion yuan represents a more than 150% reversal, driven by product transition costs, higher battery and chip prices, and asset impairments.
Huawei's fixed toll on Seres
Under the previous arrangement, Huawei collected a 2% technology licensing fee and an 8% channel service fee from Seres, totaling 10% of revenue as fixed charges. Over four years, payments to Huawei's ecosystem reached 111.335 billion yuan (about $15.7 billion), according to the prospectus cited by Huxiu. Seres bore the manufacturing costs while Huawei reaped brand and channel profits, a structure that proved untenable when sales slowed.
The new agreement shifts the model from 'Huawei-led' to 'exclusive dealership with Huawei intelligent technology support.' Seres will now take on marketing and store operating costs that Huawei previously covered, and Aito's sales channels will operate independently. Aito currently has over 400 user centers across more than 200 cities, and starting January 1, 2027, Aito vehicles will no longer be sold in Huawei stores or through the HIMA network. The familiar sight of customers browsing Aito models inside Huawei retail outlets will become history.
This restructuring highlights three structural problems in Huawei's HIMA model, which encompasses five brands: Aito (with Seres), Zhijie (with Chery), Xiangjie (with BAIC), Zunjie (with JAC), and Shangjie (with SAIC). Together they cover price points from 200,000 yuan to over a million yuan. But sales data from January to August 2026 show Aito accounting for about 208,000 of the roughly 330,000 units sold by the five brands, or 63%, with the other four brands combined only reaching about 60% of Aito's volume.
Huawei's revenue from the model is largely fixed: licensing fees based on factory prices, channel fees on sales, and component procurement fees. It bears almost no manufacturing risk—the plants, inventory, and workers belong to the automakers. In a downturn, this becomes an irreconcilable conflict, as Seres' 1.7 billion yuan loss demonstrates. Seres' push for more control is essentially a demand to rebalance risk and reward.
The question now is whether the new arrangement can stabilize Aito's brand perception and sales. With Seres taking on more costs and Huawei's halo dimming, the 'no-car-making' model faces its toughest test yet.
