Huawei and Seres are adjusting their partnership this week, with Huawei moving from a hands-on role in marketing, sales and product planning to a lighter-touch collaboration. Seres, the Chinese automaker that builds Aito-branded cars, is regaining control of the brand, according to a report from the Chinese outlet Huxiu. The move comes less than a month after Seres posted a first-half net loss of 1.7 billion yuan (about $239 million), and as sales of Aito models have slumped.
Huxiu notes that the question of who actually buys an Aito, and why, is central to understanding the shift. A survey of Aito M9 owners by research firm Jielanlu found that Huawei's intelligent driving assistance was the top reason for purchase, cited by 52.4% of buyers. Brand and smart cockpit features, also closely tied to Huawei, ranked next. Some 58% of M9 owners already used Huawei phones. In other words, many buyers were drawn to the Huawei ecosystem first, and the car second.
The first-half loss stems from several factors. In the second quarter, Seres wrote off tooling and older-generation driver-assistance hardware tied to the outgoing M5 and M7 models, contributing to a 2.471-billion-yuan (about $348 million) quarterly loss. That one-time charge, the company said, was a clearing of historical baggage rather than a recurring cost. Gross margin for the first half fell to 23.30%, down 5.63 percentage points year on year, and to 20.92% in the second quarter alone, squeezed by rising chip costs and intense price competition in China's EV market.
The Huawei cost structure
More structural is the cost of Huawei's involvement. According to Seres' Hong Kong listing prospectus, for every car sold, Seres pays Huawei's auto division Yinwang for hardware and a 2% technology licensing fee, plus an 8% channel service fee to Huawei's consumer business group — a combined 10% of revenue. In the first half, Seres spent 9.84 billion yuan (about $1.39 billion) on purchases from Yinwang alone. Over the past four years, payments to the Huawei ecosystem totaled 111.335 billion yuan (about $15.68 billion), nearly 30% of Seres' total revenue in that period, while its cumulative net profit excluding non-recurring items was just 1.482 billion yuan (about $209 million).
Huawei's retreat is part of a broader resource reallocation within its Harmony Intelligent Mobility Alliance, Huxiu reports. With the Aito brand now established, Huawei is shifting attention to younger brands like Zhijie and Xiangjie. The change marks a transition from "Huawei does everything" to "automaker leads, Huawei enables."
For Seres, regaining control could mean more manageable marketing and channel costs, and more control over product cadence. But the core dependency remains: Seres will still buy intelligent-driving hardware and cockpit systems from Yinwang, and the Huawei cost line stays. What changes is who sells the cars, not who supplies the technology.
Can Seres handle the wheel?
Seres has little experience running Aito's sales and distribution independently — Huawei stores and sales teams have been the main source of Aito sales. Short-term channel integration costs and inefficiencies could show up in delivery numbers over the coming months, Huxiu warns. On the product side, Seres has its own Magic Cube platform and range-extender technology, but the pace of intelligent-driving and cockpit upgrades still follows Huawei's roadmap.
Sales trends add urgency. After slight growth in the first half, deliveries turned sharply lower: August sales of 20,652 units fell 49.68% year on year, and July was down 47%. Analysts are also trimming forecasts. BOCOM International cut its 2026 Aito sales projection by 24.7% to 403,000 units, while CLSA expects Seres to deliver 422,500 vehicles this year, down 18%.
Seres still has cards to play. On September 12, it began delivering the Aito M9 Ultimate extended-wheelbase version, priced from 649,800 yuan (about $91,500). The new-generation M9 surpassed 30,000 cumulative deliveries in 12 weeks and led the 500,000-yuan-plus segment for three straight months from June to August. The M9 protects the brand's premium position, but the volume question rests on the M6, a model aimed at the 250,000-yuan (about $35,200) segment.
Whether Seres can turn the corner depends on three things happening together: sales stabilizing, gross margin recovering, and Huawei's fixed costs being diluted by higher volume. The ownership change alters the boundary of operational efficiency, but not the structure of the business model — Seres remains a carmaker deeply tied to Huawei's technology, paying Huawei's costs and planning products around Huawei's upgrade cycle. The real test, Huxiu concludes, will be the monthly delivery and margin data over the next few months, not the headlines about the partnership shift.
