Core Viewpoint - The article compares the business models of Seres and Li Auto, highlighting that Seres relies heavily on Huawei's technology and brand, positioning itself as a follower in the market, while Li Auto has a more independent approach with a focus on product definition and blue ocean strategy [1][5][6]. Group 1: Comparison of Business Models - Seres adopts a follower strategy, leveraging Huawei's technology and brand, which reduces risk and increases certainty of success compared to Li Auto's high-risk, high-reward model [5][6]. - Seres launched the AITO brand in 2022 and achieved sales comparable to Li Auto within 1-2 years, benefiting from reduced trial and error costs due to Li Auto's prior market exploration [6][9]. - The partnership with Huawei enhances Seres' brand value, allowing it to maintain higher vehicle prices and profit margins despite a general market trend of declining prices [9][10]. Group 2: Market Dynamics and Financial Performance - The automotive market has shifted from supply shortages to oversupply, leading to a downward trend in vehicle prices since 2023, affecting all manufacturers [9][10]. - Seres has managed to increase its average selling price and maintain a higher gross margin compared to Li Auto, with projected gross margins of 24% for Seres versus 20% for Li Auto in 2024 [15][22]. - Seres' sales and service expenses are significantly higher than Li Auto's, indicating a substantial portion of revenue is allocated to Huawei for profit sharing [22][24]. Group 3: Dependency on Huawei - Seres' reliance on Huawei for product definition and market entry limits its ability to innovate independently, resulting in a weaker bargaining position [18][40]. - The financial relationship with Huawei includes high sales commissions and R&D costs, which constrains Seres' profitability and growth potential [35][41]. - As Huawei expands its smart car business, Seres risks dilution of its brand power and slower product development cycles due to resource allocation across multiple brands [48][49]. Group 4: Future Outlook - Li Auto faces strategic challenges as its market share declines and it transitions to pure electric models, with upcoming models expected to compete in the high-end electric vehicle market [51][60]. - The success of Li Auto's new models, such as the i8 and i6, is anticipated to be stronger than previous launches, supported by improved charging infrastructure and brand recognition [62][63].