Seres and Huawei Extend AITO Partnership for Five More Years

Seres and Huawei Extend AITO Partnership for Five More Years

TREE NEWS reports: On September 30, Seres Group and Huawei signed a strategic cooperation agreement in Shenzhen to extend their partnership on the AITO (Wenjie) electric vehicle brand for another five years. The deal, announced at a signing ceremony attended by Huawei’s Executive Director and Terminal BG Chairman Yu Chengdong and Seres Group Chairman Zhang Xinghai, deepens the collaboration that has driven the AITO brand’s rise in China’s premium EV market. Under the new agreement, the two companies will maintain AITO’s high-end intelligent vehicle positioning, establish a dedicated joint team for the AITO business, and continue exclusive retail operations to better serve customers and elevate the brand.

The partnership extension comes amid a broader restructuring of Huawei’s HarmonyOS Intelligent Mobility alliance, which includes multiple automotive brands. While AITO has been the flagship success story, generating the majority of HarmonyOS Intelligent Mobility’s revenue and customer traffic, questions have arisen about resource allocation among the competing brands. The new dedicated team arrangement aims to address these concerns by allowing Seres and Huawei to coordinate manpower and business activities more efficiently around AITO’s specific needs. This follows an earlier announcement that Seres would lead product definition, design, marketing, channels, and services for AITO, with Huawei Terminal providing enabling support.

Market Implications

The extended partnership is likely to have several market implications:

• Seres Group (601127.SH): The stock could see positive sentiment as the deal provides long-term certainty for its core EV business. However, investors will scrutinize whether the dedicated team and exclusive stores can improve sales efficiency and profitability. Seres reported a net loss of 1.717 billion yuan in the first half of 2025, compared to a profit of 2.941 billion yuan a year earlier, due to product mix changes, model transitions, rising battery and chip costs, and asset impairments. The new agreement may help stabilize margins by focusing resources on the high-margin AITO brand.
• Huawei’s Automotive Supply Chain: Suppliers of components for AITO vehicles, including battery makers and chip providers, could benefit from sustained production volumes. The extension also reinforces Huawei’s commitment to its intelligent automotive solutions, potentially boosting its own technology licensing revenue.
• Competitive Landscape: Rivals in China’s premium EV segment, such as NIO, Li Auto, and XPeng, may face heightened competition as AITO strengthens its brand and sales network. The exclusive stores and dedicated team could allow AITO to capture more market share, especially in the high-end SUV segment where the M8 and M9 models compete.
• Broader EV Sector: The deal underscores the deepening integration between traditional automakers and tech giants in China’s EV industry. It may encourage similar partnerships, driving further consolidation and innovation in the sector.

Investor Takeaways

For investors, the key question is whether the renewed partnership can translate into improved financial performance for Seres. The company’s sales expenses surged 26.12% year-over-year to 24.194 billion yuan in 2025, outpacing revenue growth of 13.69%. The new dedicated team and exclusive stores aim to make sales spending more efficient, but execution risks remain. Investors should monitor the following:

• Profitability Turnaround: Can Seres return to profitability as AITO model iterations stabilize and cost pressures ease? The success of the M8 and M9, and the rollout of new models, will be critical.
• Resource Allocation: How effectively will the dedicated team operate? Will AITO receive adequate resources relative to other HarmonyOS brands? The agreement’s details on team composition and resource allocation will be closely watched.
• Sales Efficiency: The exclusive stores must generate enough foot traffic and conversions to cover rents and personnel costs. Tracking same-store sales and customer acquisition costs will be essential.
• Huawei’s Role: While Huawei provides technology and brand halo, Seres retains operational control. The balance of power and potential conflicts could affect execution.

Overall, the extended partnership provides a clearer roadmap for AITO’s future, but the market will demand tangible results. Seres’ stock may react positively in the short term, but long-term performance hinges on operational execution and margin recovery. The deal also highlights the growing importance of tech-automaker alliances in the EV race, a theme that could influence investment strategies across the sector.