Huawei is retreating from the front line of China's EV war. From January 1, 2027, the Aito (Wenjie) brand will be pulled out of Huawei's Harmony Intelligent Mobility (Hongmeng Zhixing) stores and Huawei-branded shops, according to a notice that dealers received from Huawei in mid-September, as reported by Chinese tech outlet Huxiu.
The change is part of a three-step handover that began on September 15, when Harmony Intelligent Mobility issued a statement saying Aito's product definition, design, brand marketing, channel retail and service system would all be led by Seres, with Huawei's terminal business retreating to a "participatory enabling" role. The next day, Aito told its channel partners that their service agreements would be re-signed from Huawei Terminal Co. to a Seres affiliate, effective immediately.
A decade of dependence, a thin margin
Huawei and Seres (then called Sokon) signed their first comprehensive cooperation agreement in 2019, and launched the Aito brand in December 2021 under Huawei's "Smart Selection" model. Huawei poured in product definition, design, marketing and channel support, while Seres handled manufacturing. The result was explosive growth: Seres revenue jumped from 14.3 billion yuan in 2020 to 145.1 billion yuan in 2024, with net profit of 5.9 billion yuan, making it the world's fourth profitable new-energy carmaker.
But the economics were punishing. According to Seres' Hong Kong IPO prospectus, between 2022 and the first half of 2025, Seres paid its largest supplier—widely believed to be Huawei's ecosystem—over 75 billion yuan in procurement. In 2025 alone, that figure reached 56 billion yuan, 33.8% of total procurement. Seres also pays Huawei's Yinwang unit a hardware purchase fee plus a 2% technology licensing fee per vehicle, and pays Huawei's terminal business an 8% channel service fee—a combined 10% cut. On a 400,000-yuan (about $56,300) Aito, that means 40,000 yuan (about $5,600) flowing to Huawei. Over four years, Seres' cumulative non-GAAP net profit was just 1.48 billion yuan.
The strain showed in 2026. Seres revenue fell 7.87% year-on-year to 57.49 billion yuan in the first half, and it swung to a net loss of 1.72 billion yuan, versus a profit of 2.94 billion yuan a year earlier. In August, Aito sales dropped 49.68% year-on-year to 20,652 units.
Quality complaints and a diluted brand
Huxiu also points to rising quality complaints on platforms like Chezhiwang, covering issues from drive-motor failures and ADAS (advanced driver assistance) misses to rust and trim defects. As of May 2026, Harmony Intelligent Mobility had 1,951 sales stores but only 957 service and maintenance outlets.
Huawei's "five realms" strategy—Aito with Seres, Zhijie with Chery, Xiangjie with BAIC, Zunjie with JAC, and Shangjie with SAIC—has also diluted focus. In the first half of 2026, Aito sold about 161,000 units, nearly 70% of Harmony Intelligent Mobility's total, while Zhijie fell 56.9% to 19,300 units. Richard Yu, Huawei's consumer business chief, has admitted that supporting two or three brands is already hard, let alone five.
Internally, the retreat reflects a long-running tension between Yu's ambition to deeply shape cars and founder Ren Zhengfei's insistence that Huawei never builds cars itself. Ren's 2023 directive, valid for five years, banned the use of "Huawei Aito" or "HUAWEI" branding on vehicles. With margins thin, quality under fire and partners struggling, the "help carmakers build good cars" model is reaching its structural limit, according to Huxiu.
