Seres has formally taken the helm of the Aito brand, with Huawei stepping back from its previous leading role in product definition, marketing, and retail. The restructuring, announced after a week of speculation, means Seres now oversees the brand's strategy and operations, while Huawei's terminal business will support as an enabler. According to Yinwang, the entity housing Huawei's automotive technologies, it will continue to supply its Qiankun smart driving and HarmonyOS cockpit solutions to Seres, addressing fears of a technology cutoff.
The market's reaction was swift and negative. On the day of the announcement, Seres' A-share price fell 5.09% and its Hong Kong shares dropped over 6%, hitting a record low. The company's market value, which had briefly surpassed 300 billion yuan (about $42.3 billion) in September 2025, shrank to roughly 79 billion yuan (about $11.1 billion). The latest half-year report showed a net loss of 1.717 billion yuan (about $242 million), swinging from a profit of 2.941 billion yuan in the same period last year, with a second-quarter loss of 2.471 billion yuan (about $348 million).
From springs to smart EVs: Seres' borrowed path
Seres' journey began in 1986 when founder Zhang Xinghai started a factory producing car seat springs. Over the years, he expanded into shock absorbers and motorcycles, but entering the car industry required partnerships. In 2003, his company formed a joint venture with Dongfeng, which provided the brand and manufacturing license, while Zhang's side handled production and costs. That venture, Dongfeng Xiaokang, produced over a million vehicles by 2012, and in 2020, Zhang bought out Dongfeng's remaining 50% stake.
The second major partnership was with Huawei, starting in 2021. Huawei brought technology, product definition, brand credibility, and retail channels. The collaboration helped Seres, then known as Sokon, enter the premium smart EV market, with the SF5 model sold in Huawei stores. However, the cost structure was heavy: for each Aito sold, Seres paid roughly 2% of the car's price as a technology license fee and 8% as a channel service fee to Huawei. This burden contributed to a 7.87% drop in revenue to 57.493 billion yuan (about $8.1 billion) in the first half, despite a 3.87% increase in NEV sales to 178,800 units.
Can Seres stand alone?
The shift raises a critical question: can Aito survive without Huawei's halo? Huawei stores reportedly influenced about 73% of Aito purchase decisions, and consumers often bought because of Huawei, while Seres handled production and after-sales. This disconnect has caused anxiety among current and prospective owners, with some cancelling orders. Seres has been buying up assets from Huawei, including trademarks and a 10% stake in Yinwang, to solidify its ownership of the Aito brand. However, brand perception is not built on balance sheets.
Seres does have strengths: a strong manufacturing base with a highly automated plant in Chongqing, over 400 user centers, and a leading position in range-extender technology. But it must now develop its own product definition and brand management capabilities. The company has started hiring for roles in vehicle design, interior design, export logistics, and customer service, signaling an effort to build a complete automotive brand organization. The market will watch upcoming sales, pricing, and residual value data to judge how well Seres manages the transition.
