Written by Cláudio Afonso | LinkedIn | X
EV maker Nio is implementing sweeping cost-cutting measures and restructuring its operations in an effort to curb mounting losses, CEO William Li told employees in internal meetings, according to a report by Chinese tech media outlet 36Kr.
To fulfill its target and double last year’s sales, Nio needs to deliver nearly 413,000 vehicles over the next ten months — an average of 41,300 units. In December, the company reached a new monthly record with over 31,000 EVs delivered.
Projects such as its smartphone division, responsible for the Nio Phone, are among the most affected areas while signature service offerings, such as worry-free maintenance and charging, are currently under review.
The company has introduced a new operational framework called the Cell Business Unit (CBU) mechanism, aiming to shift Nio from a budget-driven model to a performance-oriented structure.
Under the CBU system, every department must calculate return on investment (ROI) metrics, manage individual budgets, and be accountable for financial results, 36Kr reported, citing sources familiar with the matter.
When approached by EV, a person familiar with the matter confirmed the content of the report.
While the founder and chief executive has publicly set a profitability target for 2026, he has internally pushed to achieve single-quarter profitability by the fourth quarter of 2025, the report said.
Supply Chain Scrutiny
Nio has also intensified cost management efforts, particularly in its supply chain. The company’s cost-control team has been separated from procurement and now reports directly to the Chief Financial Officer, with new price caps on supplier contracts. Any procurement exceeding pre-set limits requires special approval.
Li has personally increased involvement in supplier negotiations, especially for key components such as batteries, and has mandated a new cost-calculation approach dubbed the “one-million-times cost thinking” strategy.
To further cut expenses, Nio has streamlined component usage across models and introduced supplier transparency measures.
One example is a new seat platform shared across multiple vehicle lines, which has resulted in a 10% reduction in costs. Additionally, some after-sales services, such as car washing and paint jobs, have been outsourced to third-party providers to improve efficiency, 36Kr reported.
The company has already relocated its main after-sales warehouse to reduce rent by over 70%, saving an estimated 200 million yuan annually, according to the report.
Sales Adjustments
To accelerate revenue generation, Nio has also overhauled its sales strategy, replacing process-heavy sales performance evaluations with direct conversion-based metrics. The company has removed internal targets for test drives and sales calls and now assesses sales staff based solely on actual vehicle orders, 36Kr reported.
As part of a broader effort to enhance visibility, Nio has also expanded advertising placements across its over 600 retail outlets and simplified promotional language to attract new customers. For instance, rather than offering “48 free battery swaps,” the company now markets it as “20,000 km of free charging,” making it easier for consumers to understand, according to the report.
EV learned last week that Nio has integrated the delivery channels of its main brand and sub-brand Onvo in a bid to reduce operational costs.
The move comes as Onvo struggles with slowing sales despite an earlier production capacity target of 16,000 units in January.
The sub-brand delivered fewer than 6,000 vehicles that month, with sales declining further to 4,049 units in February. For March, the company mentioned in late 2024 that it aimed to reach a production capacity of 20,000 units.
Nio delivered 9,143 electric vehicles under its main brand last month. While figures of the main brand increased 12.4% from the 8,132 units registered a year ago, its sub-brand Onvo saw its deliveries fallling 31.5% to 4,049 units.
Nio Group deliveries increased 62% year over year to 13,192 vehicles.
This year, the company is relying on its two more affordable sub-brands, Onvo and Firefly, to help double sales from last year to approximately 440,000 units. Within the Nio brand, refreshed models with improved technology and interiors will soon be launched while the flagship executive sedan ET9 will start deliveries this month.
The company reiterated last week that it will begin customer deliveries and test drives of its ET9 executive sedan this month.
