An operational tactic within a creator group unexpectedly disrupted Avatr's IPO momentum.

On July 27, 2026, netizens exposed that in Avatr's Blue V creator community, operational staff had orchestrated discussions around the “Zeekr cross-border vehicle lock” incident, encouraging creators to capitalize on the situation to highlight Avatr's model advantages.

As the incident escalated, insiders responded by attributing it to a farce orchestrated by a third-party supplier's operations. Subsequently, creators were instructed to refrain from forwarding, discussing, belittling, or mocking negative content about competitors.

For brands with similar mid-to-high-end market positioning, fierce competition is inevitable. However, for such brands, restraint may be the ultimate testament to their brand maturity.

Avatr submitted its prospectus to the Hong Kong Stock Exchange in November 2025 but failed to secure approval after six months. On June 30, 2026, it reapplied for listing. Industry analysts anticipate its IPO fundraising target to range between HK$5 billion and HK$10 billion.

Indeed, the company is in dire need of funds.

By the end of 2025, Avatr's cash and cash equivalents had plummeted to RMB 9.687 billion from RMB 19.323 billion at the previous year-end. Meanwhile, its net current assets turned negative at RMB -8.285 billion, down from RMB 4.712 billion.

The prospectus clarified that this decline was primarily due to the company's strategic investment in Yinwang. Although this investment yielded RMB 182 million in profit in 2025, it exerted short-term pressure on cash reserves.

Against the backdrop of cooling first-tier market financing for new EV makers and persistent price wars in the new energy vehicle sector, securing financing from the Hong Kong Stock Exchange is not merely a bonus for Avatr but a lifeline to sustain its competitive edge.

Capital markets are less concerned with the longevity of the “CHN model” narrative and more focused on whether Avatr can flatten its loss curve. RMB 25.6 billion in revenue merely serves as Avatr's entry ticket to the next round of competition.

Cost reduction is imperative for Avatr.

However, for a brand that emphasizes “emotional luxury” and a “futuristic feel,” cost-cutting cannot focus solely on material expenses but must also consider user perception.

The 2026 Avatr 07 eliminated some ambient lighting features, including the highly acclaimed U-shaped ambient lights for the driver and front passenger in the previous model. Proponents argue that the overall ambient lighting remains intact, justifying the adjustment, while opponents contend that the U-shaped lights resembled a “spaceship” and were the soul of the cabin ambiance.

Such controversies, though minor, underscore the cost dilemmas faced by high-end EVs.

Reducing costs in areas invisible to users tests supply chain and engineering capabilities, while doing so in visible areas tests brand resilience. Avatr has made upgrades. The 2026 Avatr 07 Elite all-electric version comes standard with Huawei Qiankun ADS 4, adding configurations such as a 192-line LiDAR, streaming media rearview mirrors, and auxiliary driving indicator lights.

However, users do not evaluate high-end brands solely based on hardware value. While intelligent driving, LiDAR, and battery technology are rational considerations, small configurations that users interact with daily determine whether they feel a vehicle is “worth the price.”

Similar contradictions arise in detail-oriented experiences. All Avatr electric models come standard with CATL batteries, and some models offer up to 50W wireless phone charging, but the wired Type-C charging power is only 20W to 27W. While excelling in major features but scrimping on minor ones can create cost-effectiveness, it may also dilute the sense of premium quality.

This is not a question of configuration right or wrong but a tug-of-war between brand positioning and profit pressures.

Avatr's target users are young people with ample budgets who value aesthetics and intelligent experiences. Their sensitivity to “feature reductions” stems not just from cost changes but from the gap between brand promises and actual experiences.

The creator group controversy also reflects a cost issue.

Public reports reveal that in the “Xiaota Creator Alliance” community, operational staff had outlined the background, discussion topics, and content angles for the Zeekr owner cross-border self-drive incident that triggered risk control vehicle locks. Creators were advised to discuss topics such as vehicle ownership rights and go with the flow to highlight Avatr's model advantages.

After the incident escalated, Avatr insiders responded to automotive bloggers, stating that a third-party supplier had directly shared trending content in the community to guide creation without proper review and standardization.

Subsequently, supplementary notices in the community prohibited creators from forwarding, discussing, belittling, or mocking negative content about competitors and warned against comparing, subtly ridiculing, or denigrating any competitor brands in captions or comment sections, highlighting compliance risks such as unfair competition and commercial defamation.

When brand communication is outsourced to suppliers and creator networks, efficiency improves, but brand boundaries become blurred.

For ordinary consumer goods, leveraging trending topics may be just an operational mishap. For high-end intelligent EVs, it affects trust. Intelligent vehicle users evaluate safety, remote control, system stability, after-sales responsibility, and brand values together.

Using competitor negative incidents as content entry points may gain short-term attention but erode brand dignity in the long run.

Suppliers can make mistakes, but official Blue V communities cannot fully shift responsibility to them.

Avatr is at a stage where it needs financing, sales volume, and increased visibility. However, precisely at this stage, the brand must avoid appearing to rely on competitor incidents for traffic. Premium positioning is not achieved solely through pricing and technology but also requires organizational restraint at every external touchpoint.

Avatr's inception was highly notable.

In June 2022, Changan Automobile Chairman Zhu Huaorong, Huawei Rotating Chairman Xu Zhijun, and CATL Chairman Zeng Yuqun appeared together on stage at the Chongqing Auto Show. At the time, the CHN model jointly supported by Changan, Huawei, and CATL was seen as an ideal solution for high-end intelligent EVs.

The logic of this collaboration was clear: Changan handled vehicle architecture, definition, and manufacturing; Huawei provided intelligent vehicle solutions; and CATL supplied power batteries, energy management, and charging ecosystem support. For a new brand, this nearly one-time acquisition of the three heaviest capabilities—manufacturing, intelligence, and batteries—was a significant advantage.

Avatr's shareholder lineup reinforced this narrative. Changan Automobile holds a 40.99% stake as the largest shareholder, CATL holds 9.17% as the second-largest shareholder, and local state-owned platforms like Chongqing Anyu and Chongqing Cheng'an, along with South Industry Assets, are also among the shareholders.

The issue is that resource combinations can raise the starting point but cannot replace market time.

Avatr's predecessor, Changan-NIO, was established in 2018 and renamed Avatr in 2021. Actual deliveries began in December 2022. Compared to earlier entrants like NIO and Li Auto, Avatr is three to four years behind. The window of opportunity in the intelligent EV segment is short, and latecomers often face higher costs to capture user mindshare.

Product timing exacerbated this lag.

The Avatr 11 was launched in August 2022, while the Avatr 12 did not arrive until November 2023. Only in the past two years has Avatr begun accelerating its product lineup expansion. Its current main batch production (mass-produced) models include the 06, 07, 11, and 12, all available in all-electric and extended-range versions. In contrast, competitors like Li Auto, NIO, Zeekr, and BYD offer more models.

An automaker does not benefit from an excessive number of models.

Blindly launching numerous models increases R&D, supply chain, inventory, and marketing pressures. However, in the competitive new energy vehicle market, insufficient models cause brands to miss niche segments. An Avatr employee admitted in reports that delays in launching large five-seat SUVs, large six-seat SUVs, and MPVs resulted in missed opportunities.

Despite possessing strong external resources, Avatr failed to establish a sufficiently dense product presence during the earliest window of opportunity.

Prospectus data shows that from 2023 to 2025, Avatr's deliveries were 20,021, 61,588, and 122,702 units, respectively, with a compound annual growth rate of 147.56%. Revenue during the same period rose from RMB 5.645 billion to RMB 15.195 billion and then to RMB 25.631 billion, with a compound annual growth rate of 113.08%.

Gross margins also improved, from -3.0% in 2023 to 6.3% in 2024 and 9.4% in 2025. Operating cash flow turned positive in 2024 at RMB 1.755 billion and further increased to RMB 2.315 billion in 2025.

If viewed solely through these figures, Avatr has completed its initial journey from cold start to scaling.

However, another set of numbers indicates that growth has not yet translated into stable profits. Over the past three years, Avatr has accumulated RMB 11.2 billion in losses. From 2023 to 2025, its sales costs were RMB 5.815 billion, RMB 14.234 billion, and RMB 23.215 billion, accounting for 103.0%, 93.7%, and 90.6% of revenue, respectively.

Costs have decreased but remain insufficient.

VOYAH, another central enterprise-incubated brand with deep Huawei collaboration and revenue below RMB 50 billion in 2025, serves as a useful benchmark. From 2024 to 2025, VOYAH maintained gross margins above 20% and achieved RMB 1.017 billion in net profit in 2025. During the same period, VOYAH sold 150,169 units and generated RMB 34.865 billion in revenue.

The gap stems from product and cost structures.

Avatr covers the market above RMB 200,000, but its sales volume is driven by the relatively lower-priced 06 and 07 models. In 2025, the combined sales of the Avatr 06 and 07 reached 93,866 units, accounting for over 76% of the brand's total sales. In contrast, more than half of VOYAH's sales came from the Dreamer model, with an average unit price exceeding RMB 400,000.

This highlights the true challenge for high-end brands. Selling at lower prices can drive scale, but if cost structures are not proportionally reduced, scale may merely dilute losses rather than generate profits.

Changan Automobile has begun implementing a systematic cost-reduction plan.

In April 2026, Changan Automobile announced its “1445 Strategy,” proposing the integration of Avatr and Deepal. While maintaining distinct brand positioning, design language, user service systems, and channel operation models, the two brands will share mid-to-back-end resources such as R&D, supply chain, manufacturing, quality control, and overseas channels.

Under this plan, shared resource costs for the two brands are expected to decrease by 20-30%.

This is a reasonable approach. Avatr needs to preserve its front-end high-end brand independence while reducing back-end costs to levels closer to those of scaled automakers.

However, this path introduces new challenges. Shared back-end resources can reduce costs but may blur brand boundaries. Expanding the model lineup can fill market gaps but will also reintroduce R&D, channel, and inventory pressures.

Avatr plans to launch new full-size and large SUVs by 2027 and introduce a total of 17 models across sedans, SUVs, and MPVs by 2030. Its next challenge is not merely launching more models but maintaining gross margins, user experience, and brand recognition while doing so.

This is far more difficult than telling a story about three industry giants.

Avatr's past relied on external resources for its starting point; its future depends on internal discipline to navigate the elimination round. Product timing, cost structure, brand communication, and capital efficiency will ultimately converge on the same balance sheet.

RMB 25.6 billion in annual revenue is not a victory but merely an indication that Avatr has entered a more expensive phase of competition.

In the next stage, the question for Avatr is no longer what Changan, Huawei, and CATL can provide but whether these resources can be transformed into its own organizational capabilities.

In the second half of the new energy vehicle race, strong shareholders remain important, but what matters more is whether a company can utilize every asset stably, restrainedly, and profitably.