In the first 50 days following its launch, a joint electric vehicle( EV ) created by Seres Group and Huawei Technologies has seen strong market response, giving it traction in the race against Tesla’s updated Model Y.
According to AITO, a division of Huawei and Seres, the M7 SUV has received more than 80,000 directions in the first 50 days following its September 12 release in China, exceeding the expectations of the two lovers. The M7 has three options, with a starting price of 249,800 yuan( US$ 34,434 ), 284,800, and 309, 800 YUAN. According to reports, Huawei has made an additional 1 billion yuan($ 136.5 million ) investment to ensure the delivery of the M7.
Up until April of this year, the acronym AITO, which stands for” Addring Intelligence to Auto,” was known as Huawei. Harmony OS, Huawei’s in-car running method, is used by its Vehicles. Additionally, AITO announced that its upcoming design, the M9, which will be available for purchase next month, has received 15, 000 pre-sale purchases. & nbsp,
However, in this instance, a positive market response does not compare to monetary success for everyone involved, at least not yet. Seres has previously reported a combined net decline of 9.7 billion yuan over the three years that ended last year. Additionally, Seres is being increasingly challenged by Xiaopeng and JAC Motors, two of Huawei’s various business partners.
The issue, according to an automobile specialist, is that an EV with a net profit of about 35, 000 yuan is priced at around 300,000 YUan. According to him, Seres may only produce about 3, 000 yuan under its profit-sharing type, and the remainder all goes to Huawei, which contributes technology and high-end electrical components.
Seres generated 16.68 billion yuan in profit in the first three quarters of this year, over 27.8 % from last year. In the first nine weeks of 2023, it reported a net loss of 2.29 billion yuan, up from 2.68 billion in the previous month. & nbsp,
War of prices
According to some Chinese observers, the successful release of M7 will not be sufficient to stop Seres from bleeding. However, critics claim that Seres is prepared to accept setbacks in order to increase its reputation by collaborating with Huawei.
Seres sold 135 100 EV models last month, an increase of 226 percent from 2021, as a result of the robust market reaction to AITO M5’s introduction. However, the business continued to report a 3.82 billion yuan online lost.
A columnist for OFWeek, a B2B marketplace that connects China manufacturers and suppliers with clients, claims that” The boost in EV sales does not mean that Seres you improve its economic achievement.” Just after making a significant investment in research and development did Seres report solid EV sales performance. To restore the investment, its EV sales profit was insufficient.
Seres’ R & amp, D expenses increased by 20.4 % to 1.09 billion yuan in the first three quarters of this year. & nbsp,
As Tesla’s revenue growth began to slow in late 2022, it began a value war in China, which prompted another market participants to follow suit. & nbsp,
In the first eight weeks of this year, the company’s EV sales increased by about 56 % from 400,000 in the previous month to 625, 000. & nbsp,
The American company reduced the prices of its entry-level Model X sport utility vehicle by 17.8 % to 738,000 yuan on September 1st, while its basic Model S sedan was reduced by 14 % to 698, 900,( US$ 96, 200 ). In addition to & nbsp,
According to Chinese media, AITO cut the M5’s value by 30, 000 yuan this year in order to survive the cost war, about giving up all of its margins.
Tesla raised the price of its updated Model Y, one of the best-selling electric vehicles in China, by 14, 000 yuan on Tuesday after experiencing a controlled revenue growth over the previous two months. & nbsp,
Following the changes, the three Model Y varieties are now listed at 263, 900 renminbi, 299, 990, and 363, 900-. On October 1st, they were introduced with fresh features like fresh ambient lighting, improved decorations, and a new bike design.
price decline
Bigger people are cutting costs, whereas smaller ones are doing the same.
Value cutting, however, might not be a wise course of action at this time, according to some experts. & nbsp,
“War of pricess have caused more automakers to focus on cost reduction, but excessive emphasis on cost reduction can lead to decreased investment in new technology,” Jason Low, principal analyst at Canalys, a technology market analyst firm, says in a research note published on October 2.
According to Low,” Automobiles have transitioned from adult industrial products to continually incremental technological products” thanks to electrification and wise technologies. ” Automakers must quickly develop new brand cultures and electrical concepts, establish intelligent ecosystems related to cars, and improve their software and hardware features.”
He continues by saying that while smaller companies have found the Tesla-led price war difficult, larger athletes like BYD have more resources to help their companies succeed.
BYD is currently in first place. According to Canalys, there is only one EV seller in China with a 35 % market share, followed by Tesla( 10 %) and AION ( 6 %). Guangzhou Automobile ( GAC ), a state-owned automaker in China, has an EV unit called AION.
According to Canalys, EV sales increased by 49 % to 6.2 million units in the first half of this year. During that time, EV accounted for 16 % of the global light vehicle market, up from 12.4 % in the first half of 2022.
In the first quarter, China sold 3.4 million EV modules, an increase of 43 % from the previous quarter. With 55 % of the world’s EV sales in the first quarter, the nation continued to be the largest.
Study: Following Huawei’s device progress, the US targets ASML.
At & nbsp, @ jeffpao3 is Jeff Pao’s Twitter account.