Summary of Key Points
Sailesi's sales increased in the first half of this year (with 160,000 units of the Wengjie model sold, a year-on-year increase of 5.6%), but it incurred significant losses (estimated loss between 1.5 and 1.8 billion yuan). Its stock price has dropped by nearly 70% from its peak last year, resulting in a market value reduction of 200 billion yuan. The reasons behind this include: increased costs for raw materials squeezing profits, excessive profit sharing with Huawei during cooperation, and the gradual disappearance of the benefits associated with relying on Huawei as a partner. Currently, the company is trying to stabilize its stock price through share repurchases and increased holdings by executives, but in the long term, it must rely on its own technology and brand development to turn things around.
Detailed Analysis
1. Increased Sales but Heavy Losses: Weak Profit Margin Makes It Vulnerable to Changes
Sailesi sold more vehicles in the first half of this year, so why did it still lose money?
- Rising Costs: The cost of storage chips has increased from 20 yuan to 100 yuan (a fivefold increase), and the price of lithium carbonate has risen from 80,000 yuan per ton to 180,000 yuan per ton, adding an additional 15,000 to 20,000 yuan to the cost of each Wengjie model. Based on 160,000 units sold, this alone consumes 2.4 to 3.2 billion yuan in profits, completely erasing the company's earnings from the same period last year (2.9 billion yuan).
- Low Profit Margin: Sailesi's net profit margin for 2025 is only 3.6%. For example, a Wengjie model priced at 400,000 yuan results in a net profit of only 14,000 yuan. Such a low margin means that even small cost fluctuations can significantly reduce profits. In the first quarter of this year, non-recurring expenses caused a sharp drop in earnings by 73%, and in the second quarter, the company incurred losses of over 2 billion yuan.
2. The Cost of Relying on Huawei: A Significant Share of Profits Goes to Huawei
Sailesi's thin profit margin is largely due to Huawei taking a large portion of its profits:
- Huawei Takes a Larger Cut: For each Wengjie sold, Sailesi has to pay Huawei two amounts: ① approximately 53,000 yuan for hardware procurement (such as intelligent driving and cockpit systems); ② approximately 39,000 yuan for service fees (technology licensing and channel marketing), totaling over 92,000 yuan, which accounts for more than 23% of the vehicle's price. In contrast, Sailesi only makes a profit of 14,000 yuan per vehicle, doing the most labor-intensive work (vehicle manufacturing and assembly) while receiving the least.
- Declining Benefits from Huawei: Previously, HarmonyOS was exclusively used in the Wengjie model. Now, with additional brands like Zhijie and Xiangjie, the market share of Wengjie within HarmonyOS has dropped from 87% in 2024 to 60% as of June this year. The market no longer recognizes Sailesi as a "Huawei-exclusive partner," reclassifying it as a traditional automaker instead of a tech company, and even Citibank has downgraded its rating to "sell."
3. Struggling to Become Independent: Limited Self-Developed Technology and Lack of Confidence in New Brands
Sailesi is trying to reduce its dependence on Huawei but faces several challenges:
- Insufficient Self-Developed Technology: Although the company invested 12.5 billion yuan in research and development (a 77% increase) in 2025, developing extended-range technology (which holds a market leadership position), this technology is considered transitional. Extended-range vehicle sales have decreased by 13% year-on-year, and competitors like Li Auto are shifting to all-electric vehicles, diminishing the value of this technology. Additionally, other automakers (such as Li Auto and Deep Blue) also have their own extended-range technologies, giving Sailesi a less competitive advantage.
- New Brands Lack Premium Appeal: The newly launched AIVA brand uses ByteDance's DouBao large model and YuanRongQing's intelligent driving systems but is priced at 200,000 yuan (compared to the Wengjie's 400,000 yuan range). This indicates Sailesi's uncertainty about its ability to command higher prices without Huawei's brand endorsement.
4. Can Share Repurchases and Executive Holdings Stabilize the Stock Price?
Sailesi has recently taken several actions: accumulating 580 million yuan in share repurchases, with executives adding 148 million yuan and the controlling shareholder planning to increase holdings by 150 to 300 million yuan. However, these measures can only temporarily stabilize the stock price and do not address the underlying issues:
- Stock Price Continues to Drop: The price has fallen from 173 yuan in September last year to 53 yuan, a decrease of nearly 70%, reducing the market value to less than 100 billion yuan. Investors realize that these repurchases are merely short-term solutions and not a long-term solution.
- Long-Term Dependency on Self-Strengthening: Only by establishing its own technological strengths (such as all-electric technology and a premium brand image) can Sailesi regain investors' trust. Otherwise, even more share repurchases will not prevent the stock price from falling due to declining profits.
5. Industry Lessons: Growth Through Dependency Can Be Fragile
Sailesi's situation is a typical example for new energy automakers:
- Advantages: By leveraging Huawei's support, Sailesi has evolved from a niche player to a high-end brand with annual sales of 420,000 units and earnings of 5.9 billion yuan.
- Disadvantages: The company relies on others for core technologies, branding, and distribution channels, leaving it vulnerable to market fluctuations (such as rising raw material costs). In such cases, the party without bargaining power is the first to suffer losses.
- Lesson: To survive in the long term, automakers must develop their own unique capabilities—technology and brands—and not solely depend on external support. Sailesi's current challenges reflect the consequences of relying on Huawei without building its own competitive advantages.
Sailesi's future does not lie in the amount of shares it repurchases but in its ability to establish independent growth beyond Huawei's influence. Otherwise, even if it manages to stabilize its stock price in the short term, it will ultimately be rejected by the market.