Seres has taken back operational control of the AITO brand from Huawei, a move that marks a significant shift in one of China's most closely watched automotive partnerships. Huawei's founder Ren Zhengfei reiterated on September 24 that the company will not build cars, according to Chinese tech outlet Huxiu, as the two sides adjust their cooperation model.
The adjustment, confirmed by Huawei executive Richard Yu on the same day, means Seres will now lead AITO's operations, while Huawei continues to design new AITO models launching this year. Yu said Seres proposed the change, and assured buyers that upcoming AITO vehicles will still be designed by Huawei's team.
AITO, which stands for "Intelligence, Connectivity, Innovation, and Integration," was launched in December 2021 under Huawei's "smart selection" model, where Huawei deeply involved itself in product definition, design, marketing, and sales while Seres handled manufacturing. The brand's M7 SUV and M9 flagship became bestsellers, with the M9 delivering over 150,000 units in 2024 and establishing itself as a phenomenon in China's luxury segment above 500,000 yuan (about $70,400).
An unequal partnership
The partnership lifted Seres from obscurity. The Chongqing-based company, which started as a spring manufacturer and built micro-vans, posted a net loss of 1.73 billion yuan (about $244 million) in 2020, and its strategic SF5 model sold just 732 units that year. After signing the smart-selection agreement with Huawei in April 2021, AITO delivered over 76,000 vehicles in its first full year, and Seres turned profitable in 2024 with revenue of 145.18 billion yuan (about $20.4 billion).
But the financial structure became increasingly lopsided. From 2022 to 2025, Seres' purchases from Huawei's ecosystem grew from 5.8 billion yuan (about $817 million) to 56.05 billion yuan (about $7.9 billion), rising from 17% to 34% of its revenue. Over four years, cumulative purchases from Huawei exceeded 111.3 billion yuan (about $15.7 billion), while Seres' cumulative non-GAAP net profit was only about 1.48 billion yuan (about $209 million).
Seres bore the risks of manufacturing, inventory, channel building, raw material costs, and price war discounts, while Huawei collected hardware fees, technology licensing fees, and channel service fees that grew with sales volume but were insulated from downturns. In 2025, Seres' selling expenses reached 24.19 billion yuan (about $3.4 billion), with advertising and showroom costs accounting for 94.9% of that.
A gradual separation
Seres had been preparing for this transition for years. In July 2024, it paid 2.5 billion yuan (about $352 million) to buy 919 AITO trademarks and 44 design patents from Huawei. A month later, it invested 11.5 billion yuan (about $1.6 billion) for a 10% stake in Huawei's automotive business unit, Yinwang. Seres also built over 400 AITO customer centers and raised its R&D spending to 12.5 billion yuan (about $1.76 billion).
The urgency increased as AITO's share of Huawei's Harmony Intelligent Mobility alliance sales fell from about 87% in 2024 to 71% in 2025, and further to about 60% by June 2026, as Huawei added more partner brands including Chery's Luxeed, BAIC's Stelato, JAC's Maextro, and SAIC's Shangjie. Huawei's exclusive technology debuts were also being diluted, with the 896-line lidar shared between the AITO M9 and Maextro S800.
Seres' financial strain became evident in 2026. First-half revenue fell 7.87% year-on-year to 57.49 billion yuan (about $8.1 billion), and the company swung to a net loss of 1.72 billion yuan (about $242 million), with a second-quarter loss of 2.47 billion yuan (about $348 million). August vehicle sales dropped 49.68% year-on-year to 20,652 units.
The question now is whether Seres can maintain AITO's brand identity while retaining Huawei's technology, and whether this rebalancing sets a precedent for how Chinese automakers and technology suppliers share power in the electric-vehicle era.
