--- title: "Under Pressure During Model Transition, SERES Awaits New Models to Take the Lead" type: "News" locale: "en" url: "https://longbridge.com/en/news/296359609.md" description: "The growing pains brought about by new model iterations" datetime: "2026-08-19T12:59:19.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/296359609.md) - [en](https://longbridge.com/en/news/296359609.md) - [zh-HK](https://longbridge.com/zh-HK/news/296359609.md) --- # Under Pressure During Model Transition, SERES Awaits New Models to Take the Lead On August 19, 2026, SERES disclosed its semi-annual report for 2026. In the first half of the year, SERES sold 178,800 new energy vehicles, a year-on-year increase of 3.87%; SERES automobile sales reached 160,800 units, a year-on-year increase of 5.6%. Operating revenue was RMB 57.493 billion, a year-on-year decrease of 7.87%; net profit attributable to shareholders was a loss of RMB 1.717 billion, compared to a profit of RMB 2.941 billion in the same period last year. Previously, SERES' profit warning had already signaled pressure on profits. The issue revealed by this financial report is that investments in new models have already been incurred, but the revenue and cash flow back from these new models have not yet fully caught up. Cost pressures did not only emerge after the release of the interim report. On June 13, 2026, Zhang Xinghai, Chairman of SERES Group, stated at the China Auto Chongqing Forum that due to rising prices of memory chips and lithium carbonate, the average cost per AITO vehicle increased by RMB 15,000 to 20,000; meanwhile, car selling prices continued to decline. Two months later, the semi-annual report reflected this pressure in the financial data. Industry data shows that in the first half of the year, the operating revenue of the automobile manufacturing industry grew by 1.8%, but costs increased by 2.8%, and total profits decreased by 19.5%; during the same period, lithium prices rose by 132.2% year-on-year, and chip supplies were also disrupted. As automakers continue to launch new products, material and component prices are rising, while selling prices are constrained by market competition, squeezing profit margins. For SERES, which is currently undergoing a model transition, rising costs are just one layer of pressure. New model development, platform updates, and intelligent configurations all require upfront investment, which can only be gradually recovered after product volumes ramp up. During the model switch-over period, if new model sales have not yet reached scale, the upfront R&D, supply chain, and launch costs will immediately impact current operating results. SERES continued to increase its R&D investment in the first half of the year. The company's R&D investment amounted to RMB 7.007 billion, a year-on-year increase of 34.8%; of this, R&D expenses were RMB 3.734 billion, and capitalized R&D expenditures were RMB 3.273 billion. For automakers, R&D investment itself is not the problem; the key lies in whether the investment can be amortized across a sufficient number of models and sales volumes. The increase in R&D investment alongside a decrease in revenue indicates that the new round of investments has not yet been fully converted into current-period revenue. Impairment of intangible assets related to technical development amounted to RMB 1.570 billion, and impairment of development expenditures was RMB 180 million. These figures need to be understood in this context. Impairment directly affects current profits and reflects the company's re-estimation of recovery expectations for some older R&D investments: with faster product iteration, the usable life of old technologies shortens, the number of models over which they can be amortized decreases, and originally projected returns must be recalculated. This accounting treatment is related to SERES' current transition pace. In the past, a platform technology might cover a longer product cycle; now, new models and technologies update more rapidly, requiring automakers to recover investments from the previous cycle before the next wave of products arrives. As the new platform has not yet fully ramped up volume, expectations for returns on old investments change first, leading to impairments appearing on the balance sheet. While not the sole reason for the decline in profits, it demonstrates that the pressure to recover R&D investments has become evident. SERES currently faces no obvious liquidity pressure. The financial report shows that as of the end of the reporting period, cash reserves exceeded RMB 73.15 billion, and interest-bearing liabilities accounted for 3.2% of total assets, consisting mainly of long-term liabilities. SERES has the funds to complete its product transition. The negative operating cash flow in the first half of the year indicates that the company still needs to rely on new models and its core business to rebuild cash collection. New models are the direct test for SERES going forward. The all-new AITO M9 delivered over 20,000 units cumulatively in its first 7 weeks on the market, with the M9 Ultimate starting at over RMB 600,000. This delivery speed marks a beginning for the transition, but the performance of a single model is not enough to change the entire semi-annual report. What the new models truly need to resolve is whether revenue can rebound, gross margins can rise again, and operating cash flow can recover following improvements in the product mix. Judging from SERES' current plans, its direction is to adjust the model structure to improve profit margins. This direction ultimately depends on the selling prices, costs, and delivery scales of specific models. The focus for SERES in the second half of the year is whether new models can replace the revenue from old products and cover the investments from the previous round of R&D and transition. Sales growth has proven that there is still market demand for its products. The question left by the semi-annual report is: in a market characterized by rising costs and accelerated product updates, can SERES quickly convert this sales volume into profits and cash flow? ### Related Stocks - [09927.HK](https://longbridge.com/en/quote/09927.HK.md) - [601127.CN](https://longbridge.com/en/quote/601127.CN.md) ## Related News & Research - [Seres Group files HKEX next-day disclosure return on share repurchase for cancellation](https://longbridge.com/en/news/292469638.md) - [Seres Group’s July NEV Output and Sales Slump as Core Seres Models Weaken](https://longbridge.com/en/news/294727375.md) - [BYD Fang Cheng Bao to debut Tai 9 SUV at Chengdu Auto Show](https://longbridge.com/en/news/296237389.md) - [Here's Why We're Watching NOA Lithium Brines' (CVE:NOAL) Cash Burn Situation](https://longbridge.com/en/news/296350687.md) - [Sany ships first batch of autonomous electric mining trucks to South America](https://longbridge.com/en/news/296430836.md)