Seres, once a name relegated to the periphery of the automotive industry, has experienced a remarkable transformation in recent years, shifting from the brink of insolvency to the cusp of profitabilityThe company, which struggled with an almost nonexistent presence in the market, has projected a net profit of nearly 6 billion yuan for 2024, an extraordinary turnaround given the depths of its financial troubles in the previous yearsThe story of Seres’ rise is one of resilience, strategic partnerships, and a blend of fortune and determination, culminating in a momentous achievement that has turned many industry observers' heads.

Seres’ journey from a virtually unknown brand to one of China’s emerging automotive forces can be traced back to its partnership with HuaweiThis collaboration, which began with high hopes, was initially viewed with skepticism, especially given the steep financial losses the company endured during the early phases of their allianceReports in late 2023 and early 2024 highlighted Seres’ staggering losses, exceeding 10 billion yuan over a three-year periodFor many, the involvement of Huawei, a tech giant, seemed to drag Seres further into financial ruin rather than lifting it to new heightsCritics argued that rather than benefiting from Huawei’s cutting-edge technologies, Seres was instead weighed down by the tech company’s own struggles, which were exacerbated by harsh U.S. sanctions that targeted Huawei’s semiconductor supply chain.

However, this initial perception belied the broader context of the partnershipHuawei, despite its tech prowess, was facing significant geopolitical challenges, and the automotive industry offered a potential escape routeThe collaboration with Seres allowed Huawei to leverage its strengths in smart driving and artificial intelligence, technologies that are increasingly critical in the development of electric vehicles (EVs). Yet, despite Huawei’s technological expertise, established automakers were wary of working with the company

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Many feared ceding too much control to a company with no legacy in the automotive sector and one that had been branded as a security risk by some governments around the worldAs a result, Huawei found itself aligned with a relatively obscure player in the industry: Seres.

What began as a partnership driven by mutual desperation evolved into a robust alliance characterized by strategic cooperation and shared ambitionFor Seres, the stakes were impossibly high—this was a make-or-break momentThe company’s future hinged on the success of this venture, and failure would likely have meant irreparable financial damageFor Huawei, the venture represented an opportunity to carve out a niche in the automotive market, despite the broader challenges it facedThe collaboration thus became a lifeline for both parties, one that ultimately paid off in unexpected ways.

By 2024, Seres had achieved a major breakthroughThe company sold 389,000 vehicles in that year, positioning itself as a key player in the rapidly growing Chinese EV marketIt had become the second new force in the sector, after Li Auto, to surpass the 300,000 annual vehicle sales thresholdReaching this critical sales milestone is seen as an indicator of financial stability, as it marks the point at which the company can begin to realize economies of scaleThe once-struggling automotive manufacturer had reached a breakeven point, setting the stage for future profitability.

The numbers speak for themselvesSeres’ forecasted revenue for 2024 is expected to fall between 144.2 billion and 146.7 billion yuan, with a midpoint of 145.4 billion yuanIts projected net profit of 5.5 billion to 6 billion yuan contrasts sharply with the 2.45 billion yuan loss reported in 2023. This growth trajectory reflects the increasing success of Seres’ vehicle sales and its ability to tap into a broader market for electric vehiclesNotably, the company achieved a net profit of 1.7 billion yuan in the fourth quarter of 2024, despite a slight dip from the 2.4 billion yuan profit in the previous quarter

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This slowdown signals that the market may be facing some headwinds, but it is important to note that the company’s overall performance has still exceeded expectations.

However, the road ahead remains fraught with challengesThe automotive industry, particularly the electric vehicle sector, is highly competitive, with new entrants continuously emerging to challenge the incumbentsIn 2024, BYD continued to dominate the EV market, reporting sales exceeding 4 million vehiclesLi Auto also saw significant growth, surpassing 500,000 vehicle sales and further consolidating its position as one of the leading players in the sectorOther companies, such as Leap Motor and Xiaomi, have also made strides, with Leap Motor approaching 300,000 sales and Xiaomi setting a target of 300,000 deliveries by 2025. Xpeng, too, posted impressive results, surpassing 190,000 vehicles sold in 2024, with a remarkable 82% year-over-year increase in December alone.

Seres finds itself in a highly dynamic market where the need for continuous innovation is paramountWhile the company’s recent performance is impressive, its position in the market is far from secureThe sales data from 2024 reveals a concerning downward trend, particularly in December, when sales dropped to 30,000 units from over 41,000 in JuneThis decrease highlights the volatility of the automotive market and the challenge of maintaining growth in such a competitive environment.

Despite the potential obstacles, Seres’ resurgence is a testament to the power of strategic partnerships and timely decision-makingThe company’s collaboration with Huawei, once seen as a desperate measure, has proved to be a key factor in its transformationHuawei’s technological expertise, particularly in areas like autonomous driving and in-car AI systems, gave Seres a significant edge in a rapidly evolving marketHowever, it would be misleading to credit Huawei’s involvement entirely for Seres’ success

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