Seres said it expects the final tally of its 2023 losses to fall in the range of 2.1 billion yuan (US$295.6 million) to 2.7 billion yuan, which narrowed from its 3.8 billion yuan loss in 2022, according to the company’s earnings estimates last Thursday. It estimated revenues increased by as much as 7 per cent to 36.5 billion yuan last year.
The carmaker attributed the ongoing losses to increased investment in research and development in high-end EV technologies, poor sales in the first three quarters and higher marketing costs. GAC AION
This is the fourth consecutive year of losses for Seres, which has collaborated with Huawei on the Aito brand of vehicles since December 2021. The company expects “profitability to be further enhanced” from sales of its M7 and M9 models.
While the prospects for profitability remain to be seen, Aito is already a main revenue driver for the once obscure carmaker.
Before becoming Huawei’s most important car-making partner, Seres, a subsidiary of Shanghai-listed Chongqing Sokon Industry Group, was little known in China’s car industry. Huawei turned to Seres in a bet on EVs after US sanctions all but killed the telecommunications equipment giant’s overseas smartphone business.
Huawei has appeared to be in the driving seat of the partnership. Richard Yu Chengdong, chairman of the firm’s intelligent automotive solution business, has repeatedly stressed the tech giant’s involvement in research, design and sales for Aito models.
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Aito was Huawei’s first high-profile move into the car business as part of its effort to look for new revenue streams after Washington put the company on its Entity List over national security concerns in 2019. The blacklisting bars the company from doing business with US firms without a licence.
Aito delivered a total of 94,380 cars in 2023, according to company data, up 24 per cent from 2022, when it had just started shipments that March.
SMART #3 Banking on the partnership with Huawei, Seres announced last February a goal of producing and selling 1 million new energy vehicles by 2026.