Seres Electric’s October results have finally been revealed.
On November 1st, Seres Electric announced that they sold 17,600 new energy vehicles in October, including all new energy brands produced by Seres Electric, with a year-on-year growth of 12.84%. Among them, Seres Electric’s vehicle sales, including AITO and Seres brands, reached 14,506 units, a year-on-year increase of 20.41%.
Compared to September, new energy vehicle sales in October increased by 71.77%, with Seres Electric’s vehicle sales increasing by 103.59%.
The AITO New M7, a joint venture between Seres and Huawei, has become the driving force behind the rapid increase in Seres Electric’s sales.
The AITO New M7 was officially launched on September 12th, with a total volume of 30,000 units for the entire month of September.
On November 1st, AITO also disclosed its October sales figures. In October 2023, AITO delivered 12,700 vehicles in the AITO New M7 series, with 10,547 of them being New M7 vehicles. The monthly delivery of over 10,000 units for a single model set a historical record, with a total of 57,829 units of the AITO New M7 series being scheduled for October.
The New M7 achieved over 80,000 pre-orders within 50 days of its launch.
In the final five days, another 10,000 orders were received.
Why did the New M7 receive so many orders in the last five days of October?
According to AITO sales personnel, they said, “Because the deadline for the 30,000 yuan subsidy was at the end of October.”
Around 4 PM on October 28th, a Times Weekly reporter at the Guanhu Huawei store in Yubei District, Chongqing, saw a continuous stream of customers inquiring about the AITO New M7. Approximately six customers were standing around one New M7 in the showroom, while others were sitting or examining the overall appearance from a distance.
In contrast, the Xiaopeng store across from Huawei’s AITO had only one or two customers looking at cars, and the Ideal store had no customers at all, with six salespeople inside the store and one salesperson sitting outside.
The salespeople in the store said, “It happens to be the weekend, and many customers who had been considering for a long time now have the time to come and take a look. Many of them placed orders, and we expect more orders to come.”
Seres Electric insiders told Times Weekly, “On the 28th and 29th, we received 4,200 orders.”
Times Weekly also learned that the relevant preferential offers for the AITO New M7 pre-orders have already decreased from 33,000 yuan in September to 30,000 yuan, and starting in November, it will be further reduced to 27,000 yuan. In addition, for orders placed before the end of November, customers can still enjoy the “Delivery Care Plan,” with a subsidy of 200 yuan per day, up to a maximum of 10,000 yuan for overdue deliveries.
The strong sales of the AITO New M7 can be attributed to several factors, including the influence of Huawei smartphones, smart driving features, active safety, and excellent value for money. With the increasing delivery of numerous New M7 vehicles, the word-of-mouth from the first batch of owners has also begun to rise, further boosting sales. According to a survey by the third-party research firm Ipsos, the Net Promoter Score (NPS) for AITO M7 owners is as high as 80.1%.
“Busier than ever”
With a continuous rise in pre-orders and a sudden surge at the end of October, how is Seres Electric managing its production? Times Weekly reporters recently conducted an in-depth visit and shooting at the Seres Phoenix Smart Factory on October 25th.
In the afternoon of October 25th, reporters saw a busy and organized production line at Seres Electric’s Phoenix Smart Factory. This modern smart car factory, jointly invested in by Seres Electric and Huawei, extensively utilizes AI technology and 5G networks.
Next to the factory assembly line, there were clear signs of AI visual monitoring and 5G network access. There was also a screen displaying the tire tightening indicator system, providing visual feedback on the strength, angle, and vehicle number of the last vehicle’s tire tightening.
Adjacent to another production line, there was a dedicated panoramic data platform that provided a data-based display of the overall production status for the assembly of chassis in the second section. Factory employees told Times Weekly, “We’ve never been this busy before.”
Due to orders exceeding expectations and far exceeding production capacity, Huawei’s Executive Director, CEO of the Terminal Business Group, and Chairman of the Car Intelligent Solutions BU, Richard Yu, personally visited the Seres Electric factory earlier to oversee production. He stated that more than 1 billion yuan has been invested throughout the entire supply chain, adding more than 20,000 personnel to ensure high-quality rapid delivery. Seres Electric’s Smart Factory operates at full capacity for 22 hours a day.
To expedite order deliveries, the Shapingba District Government in Chongqing has also been providing active support.
Ling Jian, the Deputy District Mayor of Shapingba District in Chongqing, stated in a previous interview with Chongqing TV that the district has urgently coordinated more than 100 sets of talent apartments to provide accommodation for technical and production staff. Additionally, they are preparing to coordinate over 300 sets of employee dormitories for logistics industry personnel to ensure that logistics capabilities can adapt to the intensity of enterprise production.
Comparing Seres Electric’s production and sales data for September and October, it’s evident that October’s production has significantly increased. In September, Seres Electric produced 6,101 vehicles, while in October, production surged to 14,438 vehicles, representing a month-on-month increase of 136.64%.
Also generating significant buzz is the upcoming AITO M9, set to be released in December. Richard Yu previously referred to it as the best SUV under 1 million yuan.
On October 25th, AITO announced that pre-orders for the M9 have already surpassed 15,000 units. Richard Yu also teased on Weibo that the vehicle will come equipped with the HarmonyOS intelligent cabin, advanced Huawei smart driving technology, and intelligent headlights, among other features.
According to Times Weekly, the M9 will be produced at Seres Electric’s third Smart Factory, which is nearing completion.
While Seres Electric’s most recent quarterly report shows a significant decline in revenue and continued losses, the strong sales of the New M7 and the anticipation for the M9 have raised new expectations for the company.
The third-quarter report data shows that Seres Electric achieved revenues of 16.68 billion yuan in the first three quarters, a year-on-year decrease of 27.86%, with a net loss of 2.294 billion yuan, compared to a loss of 2.675 billion yuan in the same period last year, representing a 14.2% improvement year-on-year. Seres Electric attributed the main change to the impact of the year-on-year decrease in sales during the reporting period.
In addition, in the first three quarters of this year, Seres Electric’s R&D expenses totaled 1.091 billion yuan, a 20.42% increase compared to 906 million yuan in the same period last year. Seres Electric stated that this increase is mainly due to the continued investment in product development, focusing on the promotion of intelligent construction.
Seres Electric emphasized that with the gradual delivery of the company’s products, its operating revenue is expected to increase significantly.
After the strong sales of the AITO New M7, several brokerage firms have given buy ratings to Seres Electric.
In its latest research report, Pacific Securities stated that AITO’s new M7 orders exceeded expectations, and the M9 product continues to trend upward, with further growth expected. The sustained number of orders exceeding expectations is expected to drive breakthroughs in popular models. It is estimated that the AITO M9 will be released in the fourth quarter, further boosting product performance. In terms of production capacity, the third factory is expected to be completed in the second half of 2023, and once completed, the total annual production capacity is expected to reach 700,000 vehicles. The second phase of strong growth in capacity, sales, and model cycles is expected to drive simultaneous increases in model gross profit margins and market share.