China's electric vehicle industry kicked off 2024 with a flurry of activity, showcasing a tale of triumph and turmoil among key players. While BYD celebrated a triumphant start, securing the crown for China's highest sales and clinching the ninth spot globally, China Evergrande New Energy Vehicle Group (ENEVG) faced a grim reality as top executives found themselves embroiled in legal woes, casting a shadow over the company's prospects. Similarly, Seres, known for its partnership with Huawei, is grappling with yet another year of staggering losses.
Behind the veil of success lies a harsh reality, as numerous contenders in the EV race face an uphill battle, with many succumbing to the cutthroat competition.
Despite ENEVG's financial woes being far less severe than the broader Evergrande Group's staggering debt burden of CNY2.4 trillion, the former's hemorrhage of funds remains a cause for concern. With cumulative losses surpassing CNY100 billion from 2018 to mid-2023, Evergrande's financial turmoil overshadows its peers in the EV realm.
The critical blow came with the collapse of a lifeline expected to materialize in 2024. Heralded as a potential savior for Evergrande, the partnership agreement with Newton Group unraveled at the onset of the new year, signaling a halt to Newton's planned investments, including an initial tranche of US$500 million. Once viewed as a beacon of hope for Evergrande's revival, ENEVG is now navigating treacherous waters.
In stark contrast to Evergrande's woes, Seres, another prominent player in the EV arena, grapples with a different narrative of robust sales juxtaposed with substantial losses. Despite hemorrhaging funds, Seres has witnessed a surge in sales, with cumulative deliveries reaching 106,700 vehicles by 2023, marking a noteworthy 33.31% year-on-year growth.
Seres' collaboration with Huawei, initiated in 2019, has yielded promising results, culminating in the successful launch of the SF5 model in April 2021 and the subsequent debut of the high-end Aito brand by year-end. The unveiling of the Aito M7 in September 2023 and the subsequent release of the M9 model on December 26, 2023, garnered over 30,000 pre-orders within a week, underscoring consumer interest in Seres' offerings.
Seres' formidable partnership with Huawei has reverberated across the industry, placing pressure on competitors like Li Auto. With Seres' sales gaining momentum, Li Auto has been directly impacted in the same market segment. As Seres sets ambitious sales targets for 2024, aiming to deliver 600,000 vehicles or over 50,000 units per month, the competitive landscape for Li Auto intensifies.
While Aito's market reception remains positive and Seres continues to dominate sales charts, both companies grapple with staggering losses. Seres attributes its financial woes to significant investments in high-end EV technology and product development. The company has intensified marketing efforts and increased material costs in the fourth quarter of 2023 to boost sales amidst a challenging market environment.
In the ever-evolving landscape of China's EV industry, the fate of automakers hangs in the balance, with consumers advised to tread carefully and consider the long-term viability of their chosen brands before making a purchase. Indeed, amidst the tumultuous churn of the market, only time will reveal which players will emerge victorious in this high-stakes game of innovation and endurance.
