Recently, calls for an apology to Chen Hong have been growing louder. Back in 2021, Chen Hong, then Chairman of SAIC Motor, rejected Huawei and famously declared that the company would "not sell its soul." Now, Seres, which once "sold its soul," is beginning to redeem it after suffering massive losses.
Here is what happened: Harmony Intelligent Mobility Alliance (HIMA) recently released a statement: Effective immediately, product definition, product design, brand marketing, channel retail, and service systems for AITO will be led by Seres, with Huawei Terminal participating to empower the brand; Luxeed, Stelato, Maextro, and Shangjie are not included in this adjustment and will remain fully led by Huawei throughout the entire process.
The next day, the comprehensive service agreements for AITO dealers were changed to be signed with an affiliated company of Seres. The interpretation is that this adjustment hands back the front-end operations that interact with users to Seres. However, the "soul" Chen Hong referred to—intelligent driving and smart cockpit technologies—will still be supplied by Huawei.
Therefore, this article attempts to answer five questions: Why is Seres adjusting its cooperation with Huawei's HIMA? How is the adjustment being made? What does it mean for Seres? What does it mean for HIMA and other brands? And what lessons can be drawn from this?
What Happened: Two Statements, One Day of Contract Re-signing
On the morning of September 15, Cailian Press reported the adjustment news citing sources familiar with the matter; in the afternoon, Securities Times cited sources saying this is a systematic and structural adjustment, with one of the starting points being to boost Seres' performance. At 17:00, HIMA and AITO released statements one after another. The main paragraphs were identical, but HIMA referred to AITO as one of the members of the big family, while AITO's own version described it as one of the core members.
The "Letter from AITO to All Channel Partners" that leaked that night specified: Starting September 16, the signing entity for dealer agreements will be changed to an affiliated company of Seres. The comprehensive service fees for new orders will be settled by Seres, while previous orders will still be settled by Huawei, with no changes to commercial rules. As of September 17, Seres had not issued an exchange announcement regarding this, nor had the terms of the new agreement been made public.
The wording of the official statements is based on the original text released by HIMA and AITO on September 15; the closing price is as of September 15.
To summarize, this adjustment concerns operational management rights. The AITO trademark and factories have long belonged to Seres, while the technology remains in Huawei's hands.
Why the Adjustment: Seres' Financials Could No Longer Hold Up
In our previous article, "For Every AITO Sold, CNY 136,000 Flows to Huawei: Seres' Compaq Moment," we shared that Seres' revenue in the first half of 2026 was CNY 57.493 billion, a year-on-year decrease of 7.87%; the net profit attributable to the parent company was a loss of CNY 1.717 billion, compared to a profit of CNY 2.941 billion in the same period last year. The losses were concentrated in the second quarter, with a single-quarter loss of CNY 2.471 billion. This included CNY 1.862 billion in asset impairment. After excluding this, the first half was roughly break-even. However, of the CNY 754 million profit in the first quarter, CNY 628 million came from government subsidies, meaning the second-quarter operations were already losing money.
Both costs and sales deteriorated simultaneously. In June, Zhang Xinghai said that the price increases in memory chips and lithium carbonate added CNY 15,000 to CNY 20,000 to the cost of each AITO vehicle. AITO sold just over 20,000 units in both July and August, a nearly 50% year-on-year drop, whereas in the second half of last year, monthly sales were over 40,000 units; during the same period, the domestic auto market saw a 21.8% decline in the first eight months. In the first half of the year, Seres' net cash outflow from operating activities was CNY 12.376 billion. Fortunately, the company's cash reserves still stood at CNY 73.15 billion.
AITO sales figures are based on Seres automobile sales (wholesale basis) from Seres' production and sales express reports; cost figures are from Zhang Xinghai's forum speech.
Per-Vehicle Payment Division of Labor Amplifies Losses
Under the original division of labor, Seres had to pay for Huawei's stores, marketing, and sales services. This expense was recorded under "advertising and promotion, image store construction, and service fees." This item was only CNY 4.545 billion in 2023, surged to CNY 18.112 billion in 2024 when AITO sales exploded, and reached CNY 22.953 billion in 2025, accounting for 94.9% of selling expenses. It is incurred on a per-vehicle basis in line with sales volume and is not linked to profits.
When we allocate gross profit and selling expenses to each vehicle: in 2025, the gross profit per vehicle was CNY 102,000, and selling expenses per vehicle were CNY 51,000, with selling expenses accounting for 50.3% of gross profit; by the second quarter of this year, the gross profit per vehicle dropped to CNY 66,000, while selling expenses per vehicle remained at CNY 47,000, rising to 71.5% of gross profit. The remaining gross profit was no longer enough to cover the R&D and administrative expenses for the quarter.
How much of this expense was paid to Huawei has never been disclosed, and the rumored "8% channel fee plus 2% licensing fee" has no verifiable source. Another per-vehicle payment to the Huawei system is for technology procurement. In the first half of this year, Seres purchased CNY 9.84 billion from Yinwang, which amounts to about CNY 61,000 per AITO vehicle. This part is not within the scope of the adjustment. The frequently cited "CNY 136,000 per AITO flows to Huawei" is the total procurement amount from Huawei divided by the delivery volume; most of it is component costs and cannot be treated as a profit-sharing split.
Per-vehicle data is calculated by Vehicle based on Seres' periodic reports; see the caliber notes at the end of the text for details.
Per-vehicle payments do not fluctuate with gross profit. When market conditions deteriorate, the entire volatility of profits falls on Seres.
On Huawei's Side: AITO Is No Longer the Only Brand to Be Supported
HIMA delivered 589,000 units in 2025, with AITO accounting for about 73%; in July and August this year, AITO's share dropped to 47%, and the combined total of the other four brands has already surpassed AITO, with sales in the first eight months roughly doubling. Richard Yu set a 2026 target of 1 million to 1.3 million units for HIMA. However, in the first eight months of this year, only 329,000 units were completed.
Huawei's commitments to these four brands are substantial. According to other media reports, investments in Luxeed and Maextro both exceed CNY 10 billion, Stelato plans to invest CNY 20 billion over three years, and SAIC's initial investment in Shangjie is CNY 6 billion. In August, the Stelato G9, Maextro V800, and Luxeed RX released by HIMA all came from these four brands, and the price range of the Stelato G9 even overlaps with that of the AITO M8 and M9. Friction in the stores has long existed; previously, media reported cases of fighting over order attribution and insurance business. Some personnel from Huawei Terminal who were originally responsible for AITO models have also been transferred to other brands. At the launch event on August 20, HIMA listed Huawei Terminal's full-chain capabilities—from product definition, retail channels, brand marketing, to user services—as the unique advantages of the five "Jie" models. Less than a month later, these four aspects for AITO were all handed over to Seres.
AITO figures are the wholesale numbers published by Seres; HIMA figures are the official delivery numbers. Dividing the two is only for trend analysis.
Continuing to run the front-end for AITO would be equivalent to competing for resources in its own stores with four partners who have invested heavily.
The Same Set of Huawei Technologies Installed in Cheaper Cars
Another development is that this year, brands cooperating with Huawei Qiankun and other automakers have been launched intensively, with automakers leading operations and Huawei providing technology: the Huajing S starts at CNY 159,800, the Qijing GT7 starts at CNY 209,900, and the Yijing X9 has a pre-sale price starting at CNY 299,800. All come standard with Huawei intelligent driving and HarmonyOS smart cockpit. For comparison, the starting price of the AITO M8 is CNY 359,800. Huawei's Intelligent Automotive Solution business generated revenue of CNY 45.018 billion in 2025, a year-on-year increase of 72.1%.
Vehicle model images are official renderings from Autohome; prices are official guide prices or pre-sale prices.
The more and cheaper Huawei technologies are installed, the less exclusive value AITO gets in return for paying for the full-chain services.
Seres Has Been Preparing for This Day for Two Years
In 2024, Seres signed an agreement to acquire the AITO Super Factory for CNY 8.164 billion, and purchased the AITO trademark and patents from Huawei for CNY 2.5 billion (appraised value of CNY 10.233 billion). At the same time, it signed a long-term agreement with Huawei that neither party can unilaterally terminate, meaning this adjustment could only be negotiated. In the same year, it also signed an agreement to acquire a 10% stake in Yinwang for CNY 11.5 billion. By the end of 2025, AITO had 380 of its own user centers, and the annual report proposed exclusive operations.
In June this year, Saidou Technology, co-founded by Seres, launched the AIVA brand. Its smart cockpit uses Volcengine's Doubao Large Model, and its intelligent driving uses DeepRoute.ai, without adopting Huawei's solutions. Because the original AITO had to comply with HIMA's unified product planning, models that could not fit into AITO could be placed under the new brand. However, at the shareholders' meeting in June, Zhang Xinghai still stated that the strategic agreements with Huawei and CATL would not change.
Trademarks, factories, equity, and self-built channels have enabled Seres to complete the contract re-signing within a single day.
How the Adjustment Is Made: Front-End Changes Hands, Back-End Remains Unchanged
Product: Shifted from complying with HIMA's unified planning to being led by Seres in pricing, configuration, and launch timing.
Channels: Dealer agreements and service fee settlements belong to Seres. A possible approach is for AITO to adopt exclusive operations similar to Maextro, with Huawei's supermarket stores selling through a segmented network. Some stores would be allocated to Seres to sell only AITO, and the certification and assessment of sales personnel would also shift to Seres' provincial and regional teams. However, looking at Maextro's sales, it hasn't really established itself yet.
Unchanged: Intelligent driving and smart cockpits are still procured from Yinwang, expected to reach CNY 26 billion this year; trademarks and factories have long belonged to Seres; AITO remains a member of HIMA.
Inferring from the channel letter, in the past, Huawei Terminal handled the centralized settlement; now, Seres settles directly with dealers. What Seres saves is the middle layer, but it must bear the costs of the marketing team, store operations, and customer acquisition themselves. How the new agreement will charge, who will make the final decision when the two parties disagree, and whether AITO can still use exclusive HIMA technologies like the Tuling platform currently have no answers. The front line is relatively calm; core AITO dealers believe that delivery and after-sales policies were originally formulated by Seres, so the re-signing has little impact on daily operations.
Fund flows and store arrangements are inferred by Vehicle based on the channel letter.
For Seres: Taking Over Both the Steering Wheel and the Fuel Costs
The advantage is that pricing, configuration, and product lines can be decided independently. Facing low-priced cars like the Yijing X9 and Huajing S that also use Huawei technologies, Seres can react faster, and dealers and user leads are also in its own hands.
There are three difficulties.
First is traffic. The leads distributed from Richard Yu's launch events and Huawei stores will either decrease in the future or have to be paid for.
Second is the cost structure. Per-vehicle payments are transformed into building self-owned teams and stores. Calculated based on an annualized sales volume of about 300,000 units this year, for every CNY 10,000 change in per-vehicle selling expenses, the annual pre-tax profit will differ by about CNY 3 billion, which is nearly half of the net profit attributable to the parent company in 2025.
Third is timing. The handover coincides exactly with AITO's weakest sales period. Technically, AITO's intelligent driving and smart cockpit are of the same origin as those of Yijing, Qijing, and Huajing. Differentiation can only rely on the complete vehicle platform, range-extender system, chassis, safety, and services.
Seres has taken back an AITO that can adjust its own pricing, but it must also bear the operational costs alone during the weakest sales period.
For HIMA and Other Brands
HIMA: Resources can be concentrated on the four brands it leads, but after network segmentation, with the loss of AITO as a major traffic driver, Huawei Terminal's channel revenue will also decrease. It remains unclear whether monthly deliveries will still include AITO in the future. If the October figures drop sharply, the statistical caliber must be checked first.
Luxeed, Stelato, Maextro, and Shangjie: They can get more resources in the short term, and the pressure of the 1-million-unit target will also mainly fall on them. This adjustment also sets a precedent: after a brand grows large, the leading power can be negotiated back. In July, Shangjie stepped forward to deny rumors of "leaving HIMA."
Other automakers: Qiankun customers like Huajing, Qijing, and Yijing are converging with AITO in terms of operational models, bringing competition back to price and product; AITO's direct competitors will have a gear-shifting window, and they must also guard against pricing moves by Seres after it gains pricing power.
Sensitivity calculations are computed by Vehicle; annualized sales volume is converted based on January to August 2026.
Huawei has retained the most easily scalable technology supply, while Seres has taken back the most difficult operational management.
Final Thoughts
I originally thought of a bunch of lessons learned, but it feels like empty talk—who doesn't know these things! Each company should reflect on the industry's fierce competition akin to the Warring States period to draw their own lessons.
However, looking back, Huawei can be said to have brought Seres to the poker table. Without Huawei's lead, people might still be calling it Jinkang Seres today. Overall, Seres making it to today can be considered a winner that benefited from the spotlight. As for Huawei, which faced encirclement and suppression from all sides back then, Seres also helped Huawei set an example. It can be considered a mutual achievement; stories like this have always existed in the business world.
AITO is a brand built together by Huawei and Seres. The redivision of labor after five years is, first, because AITO has grown up, and Seres has both the capability and willingness to operate it independently; second, because the industry has entered a downturn, and neither party is satisfied with the arrangement of per-vehicle charging and the separation of leading power and operational results. Next, it is worth watching the September sales figures released in early October, the third-quarter report at the end of October, and who will release AITO's next new car and at what price it will be priced.
Over the past five years, AITO has proven that Huawei can help an automaker sell high-end cars, but the carmaker itself didn't make money. What needs to be proven next is that Seres can sell them on its own.
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