[Lead: Avatr has obtained the L3 road test license, which means it belongs to the first echelon of the Huawei cooperation system in the high-end intelligent driving field. However, at the same time, sales on the market side are under pressure, the second IPO push, and brand integration is imminent, Avatr is in a state of ice and fire where "technical strengths and resource strengths" coexist with "commercial weaknesses".]

Author: Cai Yan

Early July, Avatr announced it has obtained the L3-level autonomous driving test license. Relying on Huawei ADS high-end intelligent driving system, Avatr will conduct intelligent driving road tests up to 120 km/h on open roads in Chongqing, and plans to launch mass-produced models equipped with L3 functions in the second half of 2026.

The progress Avatr has made in L3 intelligent driving marks that the brand's high-end intelligent driving technology has officially moved from R&D to the field test phase. It is expected to become a key lever for the brand to break through industry involution and reverse the current low sales situation.

Recently, the updated prospectus submitted by Avatr to the HKEX disclosed another set of data. Avatr's cumulative deliveries from January to May 2026 were only 20,160 units, averaging less than 4,032 units per month, a year-over-year decline of over 50%. If including the 7,459 units delivered in June, the half-year delivery only accounted for 12.5% of the annual target (220,000 units).

At the same period, even though the domestic automotive market as a whole is under continuous pressure with monthly and cumulative sales showing double-digit year-over-year decline, the overall decline in the new energy market was about 15%. However, specifically in the "New EV Brands, Second-Gen Startups" niche segment, the monthly sales threshold for top new EV brands has long broken 30,000 units. Harmony Intelligent Mobility Alliance's monthly sales are stable at around 50,000 units, and Leapmotor is leading by a leapfrog margin.

IM Motors, which is in the same competitive ecosystem position as Avatr, also achieved sales of 31,000 units from January to May 2026, a year-over-year increase of 114%. It is worth noting that IM's 2025 performance was not as good as Avatr.

Avatr is at a node full of contradictions. The L3 license is a proof of Avatr's technical strength, but it cannot cover a cruel reality: In terms of brand positioning and sales, Avatr, after a brief surge, is still under pressure.

High Opening, Low Closing

As one of the automotive brands born with luxury resources among "Second-Gen Startups", Avatr combines Changan Vehicle Manufacturing, Huawei High-end Intelligent Driving, and CATL Battery Power core capabilities. The three giants' combined support made the CHN Model once a benchmark sample for high-end car manufacturing.

Since deliveries began in December 2022, total deliveries increased from 20,000 units in 2023 to the brand's peak in 2025.

Full-year 2025 deliveries reached 122,700 units, December's single-month sales reached 10,400 units, achieving 10 consecutive months of sales exceeding 10,000. Full-year revenue reached 25.631 billion Yuan, a year-over-year increase of 68.7%, and gross margin was 9.4%. Revenue from 2023 to 2025 also grew, Avatr's cumulative revenue over three years was approximately 46.5 billion Yuan, with an annual compound growth rate over 113%. Revenue grew 4.5 times in three years, with vehicle business revenue growing approximately 4.3 times over three years.

Avatr's brand has experienced 3 years of growth. Relying on a set of luxury resources, it indeed captured good book data, but digging deeper reveals that at this stage, Avatr's sales scale has never covered the losses. Avatr openly stated in the prospectus: "It may continue to record net losses for the year ended December 31, 2026".

More critically, comparing Avatr's two IPO prospectus submissions, the initial prospectus showed a gross margin of 10.1% and revenue of 12.208 billion Yuan for the first half of 2025. However, in the latest prospectus, despite revenue growth year-over-year and quarter-over-quarter in the second half, the gross margin decreased (9.4%), further indicating a decline in profitability.

The key reason behind Avatr's revenue surge and continuous losses lies in: brand perception and market size.

First is brand perception. From 2022 to 2023, China's new energy products were shifting from scale expansion to quality upgrade. At that time, Avatr supported by the three giants was indeed "having traffic, having strength, and having uniqueness". When Avatr was first established, fewer than 5 companies had Huawei's technical support.

Unfortunately, at the beginning of the brand's launch, Avatr did not have a high opening and strong closing, but instead adopted the pragmatic style of traditional brands, thus missing the best communication node.

Since 2024, with more and more car companies embracing Huawei, Avatr's unique narrative of "China's Automotive Industry Second Generation" was quickly leveled by "Five Worlds Three Realms".

Taking this L3 road test as an example, GAC and Huawei ADS' Qijing GT7 also obtained Guangzhou L3-level autonomous driving road test permission. In this way, under the same situation of Qijing GT7 being equipped with Huawei intelligent driving, Avatr finds it difficult to obtain "scarcity".

Recently, data released at the 2026 Huawei ADS Technology Conference showed that by April, Huawei ADS cooperative brands exceeded 25, and mass-produced models equipped with Huawei ADS exceeded 50.

This situation is not limited to intelligent driving technology. Last year, CATL officially announced that Avatr issued the first batch of Xiaoyao Super Extended-Range Hybrid Batteries. Within a few months, some automakers followed suit with supporting equipment, including same-level competitors like Smart Driving R7.

People remember Huawei's intelligent driving and CATL's batteries, but they cannot remember the Avatr brand itself. Even though Avatr has the advantage of "first batch adoption" and is a "Yuanwang Shareholder", Avatr has not yet established clear market brand perception, which is a more serious problem than losses.

In short, what Avatr lacks is not technology, but the reason of "Irreplaceable".

Especially in the most competitive price range of 200,000 to 400,000 Yuan at this stage, whether it is Zeekr, AITO, Tesla, Xiaomi, or NIO, XPeng, as long as these brands are mentioned, consumers can clearly associate what the brand's core selling point is, while Avatr is blurred.

Regarding design, Avatr has good original design, which can indeed move some young consumers' hearts, but in the high-end market, aesthetics and design can only be a stepping stone. Regarding intelligent driving, models equipped with the full suite of Huawei ADS on the market are so numerous they are countable, and even priced lower than Avatr. Regarding batteries, consumers usually only remember the brand, not the specific battery model. Today, consumers in China's 200,000 to 400,000 Yuan range have been trained with a car selection model. They need differentiation and uniqueness, not a simple "Giant Mix".

Multi-faceted Adjustments

Regarding the impact of sales scale, Avatr admitted in the prospectus: "Relatively small procurement volumes limit our bargaining power with parts suppliers".

Changan announced in April this year strategic integration of Avatr and Deepal Auto. Deepal and Avatr will achieve deep synergy in R&D, procurement, supply chain, channels, and multiple dimensions, ultimately achieving a reduction in comprehensive operating costs by 20%-30%.

Of course, integration is not limited to cost reduction. How to guarantee the independence and differentiation of two brands, and how to solve problems such as Avatr's core competitiveness not being internally diluted in the future, will be Changan's core challenge. Currently, on the market, Lynk & Co and Zeekr under Geely are good templates for medium-end and high-end brand segmentation.

It is worth mentioning that Avatr is already quite effective in going overseas and channel levels.

In 2025, Avatr's overseas revenue increased from 223 million Yuan to 1.398 billion Yuan, revenue ratio increased to 5.5%. By the end of 2025, Avatr had laid out over 80 sales outlets in 38 countries and regions. Among them, Avatr 11 has long held the top rank in luxury electric vehicles in Thailand, occupying 10% market share in high-end electric vehicles in the UAE.

Regarding channels, Avatr started channel transformation in May 2024. Most stores have now告别 pure self-operated models, retaining only a few direct stores in core first-tier cities. The effect of channel adjustments is immediate. Distributor revenue ratio jumped from 1.1% in 2023 to 49.2% in 2025. More critically, sales efficiency significantly improved. Avatr's 2025 sales expenses only increased by 240 million Yuan, but leveraged 10.4 billion Yuan in revenue growth.

In the second half of this year, Avatr's new car sales, L3 commercialization, overseas expansion progress, and whether listing can proceed smoothly, these are all core variables for Avatr's breakthrough.

Comment

At this stage, the most realistic problem Avatr needs to face, holding 11.5 billion Yuan joint venture equity, obtaining L3 test license, promoting brand integration, etc., are all "tactical bonus points". The real lifeline is still the deepening of "Brand Storytelling". After all, the scariest thing for a brand is having no strategy, only tactics. Brand building has never had shortcuts. Currently, Avatr's direction has been clearly adjusted, and actions have been launched. The rest is left to time and products.

(This article is original to "He Yan Yue Che", no reprinting without authorization)