Avita Performance Analysis and Strategic Sustainability Research

Based on the latest financial data and public information, I analyze Avita’s performance and the sustainability of its new energy vehicle strategy as follows:

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Indicator	2022	2023	2024	H1 2025
Revenue (100 million yuan)	0.28	30.47	151.95	122.08
Net Loss (100 million yuan)	20.16	36.93	40.18	15.85
Gross Margin	Negative	3.0%	6.3%	10.1%
Deliveries (units)	114	~20,000	61,588	56,729

Avita shows typical characteristics of new car-making forces: revenue grew explosively (annual CAGR over 2000%), but losses continued to expand, with cumulative losses exceeding 11.3 billion yuan over three and a half years [1][2].

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The loss in H1 2025 was 1.585 billion yuan, which was significantly lower than the 2024 level when annualized. Gross margin increased from 6.3% in 2024 to 10.1% in H1 2025, indicating that economies of scale are being released [1][2]. If this trend continues, the company is expected to achieve quarterly break-even in 2026.

Avita’s unique “CHN” tripartite cooperation model (Changan + Huawei + CATL) brings technical endorsement but also leads to cost rigidity:

• Each vehicle pays about 113,100 yuan to the three major partners
  , accounting for over 50% of revenue based on an average vehicle price of around 200,000 yuan [2]
• Raw material costs account for over 90% of sales costs, and reliance on CATL for batteries results in weak bargaining power [3]
• Huawei’s 11.5 billion yuan equity investment (Yinwang) is paid in three installments, with the third installment of 3.45 billion yuan due in October 2025, which will severely deplete cash reserves [1]

Avita set a sales target of 220,000 units for 2025, but only completed 116,000 units by November, with a completion rate of less than 53%. Its main models Avita 06 and 07 have only 10.4% and 7% market share in their respective segments, failing to become hit products [2][3].

• Book cash is 13.48 billion yuan, but after reserving Yinwang equity payment and H2 losses, actual available funds are limited
• Compared to other new forces: NIO has over 40 billion yuan in cash reserves, Li Auto over 90 billion yuan, Avita’s capital strength is clearly insufficient [1]

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Dimension	Assessment	Risk Level
Profitability	Gross margin improving, but still lagging behind leaders (Seres:30% vs Avita:10%)	Medium
Sales Growth	Exceeded 10,000 units for 9 consecutive months, but low target completion rate	Medium-High
Technical Competitiveness	Huawei ADS intelligent driving system has differential advantages	Low
Capital Chain	Series C financing already used for Yinwang investment; urgent need for IPO funding	High
Internal Competition	Competition with AITO intensifies within HarmonyOS Intelligent Ecosystem	Medium-High

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：Strategy is sustainable, but window is tight. The trend of narrowing losses is clear; if sales exceed 300,000 units in 2026 and gross margin is maintained above 12%, it is expected to approach break-even.

：

1. Capital Pressure
   : IPO financing is key to maintaining operations; delayed listing progress may trigger liquidity risks
2. Internal Competition
   : Huawei ecosystem resources tilt towards AITO; Avita faces the “second child” dilemma
3. Scale Bottleneck
   : Conflict between high-end positioning and volume growth goals; continuous price-for-volume strategy will erode gross margin

: Monthly deliveries, gross margin changes, Series C financing arrival status, and IPO progress.

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[1] Sina Finance - High Growth Cannot Hide Losses; Avita’s Over 10 Billion Yuan Investment Fails to Buy Competitive Advantages (https://finance.sina.com.cn/stock/relnews/cn/2025-12-25/doc-inhczaki8951475.shtml)

[2] Sina Finance - Dancing with Giants: Avita’s Breakthrough (https://finance.sina.com.cn/stock/stockzmt/2025-12-26/doc-inhecrxf2559797.shtml)

[3] Investing.com - Is Avita, Held by CATL and Empowered by Huawei, Worth 30 Billion Yuan? (https://hk.investing.com/analysis/article-117277)