Seres took the steering wheel from the edge of the world all by himself.

Author | Zhou Zhiyu

The earliest collaborative model for HarmonyOS Intelligent Mobility, Wenjie, will now be spearheaded by Seres.

On September 15th, Yu Chengdong, Executive Director of Huawei and Chairman of the Consumer Business Group, posted a Weibo message to tease the new Zhijie R7, depicting a lifestyle scenario of "refined living" that moves with the car and reaches every corner of the home. On the same day, HarmonyOS announced that under the cooperation framework, Zhijie will explore new models: product definition, product design, brand marketing, channel retail, and service systems will be led by Seres, with Huawei Consumer Business participating in and providing support.

The four brands – Zunjie, Xiangjie, Zhijie, and Shangjie – will still be led by Huawei throughout the entire process. Wenjie will remain among the "five brands," but the way the two companies jointly operate this business has changed. Sources familiar with the matter revealed to Wall Street News on September 15th that some of the original HarmonyOS intelligent driving stores will also be transferred to Seres, only displaying and selling Wenjie models.

From driving cars into Huawei stores to jointly building a high-end brand with millions of users, Seres was once the most convincing example of this cross-industry collaboration. Now, it has a more complete product and service system, but also faces new trade-offs between sales pressure, product iteration, and the interests of existing car owners. Seres needs to transform the scale accumulated by Seres into a business that can generate sustainable returns.

From another perspective, Wenjie also shoulders the responsibility of exploring a new division of labor within the HarmonyOS intelligent mobility framework, where automakers lead brand management and Huawei continues to provide empowerment. The same cooperation framework is beginning to accommodate different leadership relationships.

Technology companies have brought their technology, product judgment, and retail capabilities to the automotive industry; as the partner brands have grown, both sides have begun to adjust their positions to meet new business needs.

The world of Quest has grown up. What HarmonyOS needs to prove next is how many more worlds it can create.

Handover of leadership

"Exclusive franchise" is the first change that consumers will see in this adjustment.

According to the aforementioned source, Wenjie will establish an independent sales channel, including directly operated stores, franchised stores, and some former HarmonyOS Smart Mobility stores that will be converted into Wenjie exclusive stores. Seres believes it is capable of undertaking product and service work under the new model and will have greater operational freedom; Wenjie's high-end luxury positioning will remain unchanged. The official statement also clarifies that existing user rights and subsequent services will not be affected.

On the same day, Wenjie also described itself as a "core member" of the HarmonyOS family and clarified that it is an exclusive franchise for the brand.

A deeper change is occurring before the stores even open. With product definition, design and marketing, retail, and service all led by Seres, it means that what cars to build, when to update them, and how to maintain product appeal can be coordinated around Seres' own business objectives. This decision-making power, taken over by the automaker, extends throughout a car's lifespan, from development to years of use after delivery.

This handover had been in the works for some time. On August 19, Seres' management proposed a "rapid return to exclusive distribution" during an investor conference, clearly pointing to the company's own brand positioning, product development schedule, and user needs. The company had previously been building a dedicated user center, and during institutional communications in May and June of this year, it emphasized its system capabilities from R&D and manufacturing to marketing services.

An individual involved in the HarmonyOS intelligent mobility collaboration project told Wall Street Insights that he had tried to use platform channels for performance-based advertising to find clients for the brands he was responsible for. However, once the advertising was placed in a store shared by multiple brands, it became difficult to track whose orders the advertising fees were actually generating.

“You have no idea whose car this clue will end up with,” he said.

If a customer ultimately purchases a model from another brand within the store, the shared channel still generates a sale, but the automaker that initially placed the advertisement may not recoup its customer acquisition investment. Selling cars from five brands together gives HarmonyOS a richer product portfolio, but it also means that the overall sales efficiency of the system and the operating returns of individual brands need to be calculated separately.

Several sources close to HarmonyOS said that the two sides have held a series of consultations over the past few months, during which many adjustments were made to the details of the terms in an attempt to define their respective boundaries.

The cooperation between Huawei and Seres has also undergone a redefinition in the past. In July 2024, Seres announced its intention to acquire the relevant trademarks and design patents of Wenjie for 2.5 billion yuan; a little over a month later, the two parties signed an investment agreement, with Seres Automotive intending to hold a 10% stake. Brand assets were consolidated into the automaker, and technological cooperation was enhanced by equity ties, with both matters being pursued simultaneously.

Today, the adjustments are further impacting the company's control over daily operations. Seres is also facing more direct operational pressures than during its brand growth phase: in the first half of this year, it suffered a net loss attributable to the parent company of 1.717 billion yuan, and in August's production and sales report, Seres's car sales volume was 20,652 units, a year-on-year decrease of 49.68%. While scale has been achieved, returns still need to be stabilized.

Cost pressures have also come to the attention of Seres' management. On June 12, Zhang Xinghai, speaking at the Chongqing Auto Forum about rising prices for memory chips and lithium carbonate, stated that each vehicle faces an average cost increase of 15,000 to 20,000 yuan. Maintaining a high-end product positioning makes balancing investment and returns even more urgent.

In an August exchange, Seres' management proactively discussed how product iterations in the first half of the year had led to complaints from some users. They stated that maintaining the interests of existing users would be incorporated into the performance evaluation of the management team, and that they hoped each generation of products would have a "golden usage cycle" of at least five years. Their operational focus has also shifted to improving the stable sales of existing models and reducing reliance on short-term boosts from new product launches.

Replacing hardware can create new selling points, but it also affects R&D investment, existing models, and how existing car owners perceive the product's value. With a sufficiently large user base and model lineup, Wenjie needs to make these long-term trade-offs.

With Seres taking the lead in terms of overall vehicle investment and operational results, product development schedules and return on investment become more directly linked.

The next stage of the Five Realms

The shift in the industry occurred after HarmonyOS evolved from a single template to multiple brands.

In April 2023, Yu Chengdong publicly explained that he hoped to use "Huawei Boundaries" as an ecosystem brand for cross-automotive cooperation, allowing different partners to provide complementary models and reducing the complexity of multi-brand marketing, service, and retail. At that time, Huawei needed to replicate its proven cooperation capabilities to more automakers, and shared brand elements would help reduce expansion costs.

Today, five automakers, representing five brands, have entered the HarmonyOS intelligent mobility ecosystem. Each company needs its own product positioning and operational returns. Wenjie aims to deepen its high-end luxury positioning, while the others are expanding their product offerings and building user awareness. Shared technology and brand appeal are beginning to support more diverse business objectives.

Seres's requirement for "exclusivity" has extended to its supply chain. Seres stated that it hopes core suppliers will conduct dedicated development and production lines around the product goals of the Journey, forming stable differentiated capabilities. It continues to choose Huawei technologies, hoping these technologies will be integrated with its vehicle development to create unique product value for the Journey.

Other brands are deepening their collaboration with Huawei. In 2023, Zhijie became the second smart car brand launched after Wenjie, and has now expanded from sedans to SUVs and MPVs, forming the only full product matrix under HarmonyOS. A person involved in Zhijie's business revealed that as of August this year, its team covering product development, supply and production has grown to about 6,000 people, with hundreds of Huawei employees working in the same campus.

The depth of cooperation chosen is closely related to the specific operational stage of the brand. Chery and SAIC possess mature vehicle manufacturing systems, and their partner brands are still led by Huawei throughout the entire process; Wenjie, on the other hand, has entered the stage of having millions of users and needs to coordinate the long-term interests of multiple models on sale and existing car owners. The depth of cooperation chosen is closely related to the specific operational stage of the brand.

For Zhijie, continuing to focus on the high-end market requires converting its existing user and product accumulation into stable returns. For other companies still expanding their product categories and building user awareness, Huawei's in-depth product and market work remains invaluable. Automakers can also build their capabilities in parallel with deepening cooperation; the changes in Zhijie's team are a case in point.

Ultimately, brand differentiation comes down to the product itself. When Zhijie previously reviewed the R7, they pointed out that the interior design should prioritize the needs of the front passenger and rear passengers, aligning the product with the daily needs of young families. The "Exquisite Home" campaign launched on September 15th corresponds to this round of specific adjustments. While technology and channels provide a common foundation, brands still need to find their own users.

For Huawei, this adjustment also puts the task of replicating the existing ecosystem in a more prominent position. As HarmonyOS has stated, it will focus its resources on promoting the development of the other four ecosystems. Ecosystem and others have the opportunity to benefit from this, as the two sides have already been developing and collaborating for several years, and their models have covered multiple market segments. Subsequent investment can be directed towards updating and selling specific products.

Division of labor enters a new stage

This handover by Wenjie marks a shift in the model where technology companies deeply empower automakers, moving towards a stage of re-evaluating the depth of cooperation.

The entry of technology companies into the automotive industry is bringing capabilities that extend from software and hardware to product development. At the Chengdu Auto Show in August, BMW showcased a driver assistance system co-developed with Momenta, emphasizing its integration with its own vehicle dynamics control and interaction design. Through collaboration on intelligent capabilities, BMW continues to shape its driving experience through whole-vehicle development.

HarmonyOS has further advanced the cooperation to brand management. A person familiar with the HarmonyOS project told Wall Street Insights that Huawei's product directors have significant decision-making authority, coordinating various aspects related to the product's commercial success.

The judgments of technology companies then lead to the process of deciding what kind of cars to build, how to organize development, and how to target users.

This deep involvement comes with organizational costs. A single technology can be applied to more car models, but product decisions must be made in relation to different users, markets, and car company teams. Each additional brand requires specific development and operational coordination. On-site teams and product director systems are precisely the way these decisions are implemented in engineering, manufacturing, and marketing. The expansion speed of HarmonyOS is also influenced by the speed at which this kind of operational capability can be replicated.

The deeper the cooperation, the more both sides need to adjust their approaches.

An executive from the HarmonyOS intelligent mobility project believes that the consumer electronics-style approach to generating new product traffic needs to be better integrated with the business logic of automobiles as long-term durable goods. The initial attention brought by new technologies needs to be sustained through the product's growth phase to support the long-term operation of a car.

The suggestion from Wenjie to reduce reliance on short-term boosts from new products is a concrete manifestation of this adjustment. For brands with millions of users, product updates need to consider both new buyers and existing car owners; for brands expanding into new markets, a clear product definition and focused investment remain important.

More vibrant collaborations should allow these requirements to alter the division of labor between the parties. Technology, joint development, and ecosystem services can maintain long-term relationships, while the dominant arrangements for products and operations can be adjusted according to brand capabilities, user scale, and business needs.

By retaining the identity of HarmonyOS and allowing Seres to take over more leadership, Wenjie has already brought this flexibility into actual cooperation.

In the past, when Huawei partnered with SERES to enter the automotive industry, there was much skepticism in the market. This was especially true after some of SERES' early models suffered setbacks, leading to constant ridicule. However, with the launch of the M9 and the mass production of the M8, Huawei and SERES have created a series of milestones in Chinese automotive history.

This collaboration has evolved to the point where technology companies like Huawei are deeply empowering car manufacturers, ultimately requiring a partnership that can accommodate the growth of its partners.

A mature intelligent vehicle industry requires both the scale effect of technology platforms and the differentiation of car brands. Cross-enterprise reuse of technologies and methodologies allows automakers to develop their own product judgments and brand premiums; only through cross-industry collaboration can sustainable industrial competitiveness be cultivated.

A powerful technology platform should also be able to support a group of equally powerful automotive companies.

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