Nio founder and CEO William Li called on Friday for industry-wide standardisation of batteries and semiconductor components, identifying a potential cost reduction opportunity exceeding 100 billion yuan ($14.6 billion) for the Chinese EV sector.
The proposal is rooted in what Li described as an unsustainable product iteration cycle that is burning hundreds of millions of yuan per model.
Speaking at the Intelligent EV Development Forum in Beijing on Saturday, Nio‘s founder said the accelerated pace of model launches and refreshes has made supply-demand balance “extremely difficult to achieve” and is generating massive waste across the value chain.
“New models now experience a brief sales peak, followed by a rapid decline,” Li said before detailing the product cycle of the world’s most competitive EV market.
“This creates massive resource waste — when demand surges, supply chains ramp up aggressively; by the time production capacity catches up, demand has already fallen. Wasting several hundred million yuan on a single model has become the norm.”
The Pattern in Nio’s Own Lineup
Although Li didn’t mention Nio‘s case, the patter has been affecting the Shanghai-headquartered brand he founded in late 2014.
The ET7 — Nio‘s flagship sedan until the luxurious ET9 was launched — was unveiled in January 2021 and began deliveries in March 2022.
Monthly sales peaked at 4,349 units in June 2022 — its third full month — then entered a sustained decline.
By early 2023, volumes had collapsed to under 800 units per month.
Nio launched a refreshed 2023 ET7 at the Shanghai Auto Show in April 2023 with more than 15 upgrades and no price increase, but it failed to reverse the trajectory.
A second refresh, the 2024 ET7, debuted at the Beijing Auto Show in April 2024 with 180 upgrades and aviation-style executive seats. However, demand continued to fall.
By December 2025, the ET7 delivered just 78 units — a 91% year-over-year decline. Full-year 2025 deliveries totalled approximately 3,046 units, as EV reported in January.
The ET5, Nio‘s mid-size sedan, followed a similar arc. Deliveries began in September 2022 and ramped to 7,594 units by December — making it the brand’s best seller.
It received annual refreshes in 2023, 2024, and a “Champion Edition” in early 2025, and was refreshed again this month with the 2026 model year update.
The ES7, a five-seat mid-large SUV launched in August 2022, suffered the steepest decline.
Sales fell 71.3% in 2024 to just 1,874 units for the full year. By January 2025, it was selling 330 units per month.
Nio quietly discontinued the model in China in early 2025 without a formal announcement.
A new version of the ES7 was spotted being transported in China, and Qin Lihong confirmed in February that a five-seat variant — framed as a five-seat ES8 rather than a revived ES7 — will debut in the third quarter.
The ET9, Nio‘s ultra-premium executive sedan priced at 768,000 yuan, delivered its first units in March 2025.
Sales spiked to 810 units in April, its first full month, then dropped 90% within three months — hitting just 85 units in July.
The model averaged under 120 units per month for the rest of the year.
Nio‘s sub-brands have not escaped the cycle.
The Onvo L60, which began deliveries in September 2024, hit approximately 5,000 units in November and doubled in December.
By February 2025, volumes had fallen to 4,049 units.
Li acknowledged on the earnings call that demand was “short of expectations,” and the brand’s head Alan Ai was replaced in April 2025.
Earlier this year, the Design Chief of Onvo has also left the company.
Nio unveiled a second iteration of the Firefly compact car this week — less than 12 months after the original entered production. The Onvo L90, the brand’s second model, is set to debut later this month.
The exception has been the third-generation ES8, which launched in September 2025 and sold out its 2025 production capacity within 36 hours.
The large SUV accumulated over 100,000 orders in 48 hours and became the single biggest contributor to Nio‘s first-ever quarterly profit in Q4 2025, with a gross margin of approximately 20%. But it remains the outlier, not the rule.
Batteries and Chips: Over 50% of Vehicle Cost
Li identified batteries and chips as the industry’s biggest pain points, together accounting for more than 50% of a smart EV’s total cost.
“Battery and chip costs exceed 50% of a vehicle’s total cost,” Li said. “For an automotive product, this is an out-of-control, very difficult to balance state.”
On batteries, Li argued that cell technology has converged sufficiently to make standardisation feasible.
He drew a comparison to consumer electronics, where standardised AA and AAA battery formats eliminated supply chain concerns entirely.
“Battery technology has now sufficiently converged,” Li stated. “Standardisation of mid-nickel ternary and high-nickel ternary cells is timely and feasible.”
On chips, Li disclosed that Nio‘s latest ES9 flagship SUV requires over 1,000 semiconductor part numbers and more than 4,000 individual chips.
Nio is working internally to reduce chip varieties to 400 through consolidation — a target Li first outlined at a semiconductor industry forum in Shanghai on March 19, where he also revealed that Nio had produced over 550,000 units of its in-house Shenji chips cumulatively.
Li urged regulators to coordinate with automakers to establish unified chip categories with interchangeable standards, arguing this would strengthen supply chain resilience and make domestic chip adoption economically viable.
Nio targets a 35% to 40% domestic chip sourcing rate by 2027.
“If we standardise batteries and consolidate chip varieties, the industry could save over 100 billion yuan without eroding profits at any stage of the value chain — reducing costs by several thousand yuan per vehicle,” Li said.
Nio’s Battery Swap Bet
Li’s call for battery standardisation is particularly significant given Nio‘s unique position in the industry.
The company is the only major EV maker to have built its business around battery swapping — operating over 3,737 stations globally as of the end of 2025, through which it has completed more than 100 million cumulative swaps.
This year alone, the company aims to install another 1,000 stations.
The network allows customers to rent the battery of their vehicle under Nio‘s Battery as a Service scheme rather than purchasing it outright, significantly lowering the upfront cost of the car.
The BaaS model — which underpins the ES9’s entry (pre-sale) price of 420,000 yuan versus 528,000 yuan with the battery included — depends on standardised, swappable battery packs.
Every Nio vehicle uses the same form factor, enabling any car to swap at any station regardless of model.
Starting with the upcoming fifth generation, the stations will support vehicles of all three brands of the group and also Nio‘s battery swap partners.
Nio x CATL
The relationship between Nio and CATL, the world’s largest battery manufacturer, has deepened significantly over the past few years.
In January, the two companies signed a five-year strategic cooperation agreement covering long-life battery development, battery swap compatibility technology, and joint market expansion.
In March 2025, CATL announced an investment of up to 2.5 billion yuan ($303 million) in Nio Power, Nio‘s charging and swapping unit, and the two companies agreed to jointly build what they described as the world’s largest battery swapping network for passenger vehicles.
As EV reported in January, Nio has consolidated its battery supply around CATL — halting cooperation with BYD‘s FinDreams Battery for the Onvo L60 due to insufficient order volumes to sustain multiple suppliers, while shifting 100 kWh battery pack supply for the core Nio brand from CALB to CATL.
The Ningde-headquartered company has supplied batteries for Nio since the original ES8 launched in 2018.
2026 Product Roadmap
The standardisation proposal comes as Nio enters its most intensive product year.
The company plans to launch at least four new models across its three brands by the end of the third quarter.
The ES9 flagship SUV opened pre-sales this week with deliveries beginning June 1.
The Onvo L80, a five-seat SUV targeting the 200,000 to 300,000 yuan segment, is expected to hold its technology event around April 20 with deliveries shortly after.
A new five-seat variant based on the ES8 platform — effectively replacing the discontinued ES7 — is scheduled for the third quarter.
And a refreshed Firefly, the second iteration of the compact car brand launched in the final days of 2024, was unveiled this week.
Later this month, Nio will also unveil the new iteration of the Onvo L90, the sub-brand’s second model, at the Beijing Auto Show running April 24 to May 3.
The company has already refreshed its four entry-level Nio-brand models — the ET5, ET5 Touring, ES6, and EC6 — with 2026 model year updates launched on April 3. A third-generation ES6 is planned for the second half of 2027.
Li has said Nio will target 40% to 50% annual sales growth in what he calls the company’s “third growth cycle,” driven primarily by large SUVs.
The ES8 accounted for 77.1% of all Nio-brand deliveries in the first quarter of 2026.
Cost Pressures Mounting
The call for standardisation comes as the Chinese EV industry faces acute cost pressures from multiple directions.
Li said in March that the biggest cost pressure facing the industry in 2026 was not traditional raw materials but memory chips.
The combined effect adds 6,000 to 10,000 yuan ($880—$1,470) in per-vehicle costs for premium smart EVs, Li estimated.
He said Nio‘s three brands — Nio, Onvo, and Firefly — can absorb the increase without raising prices, but acknowledged the pressure is significant across the industry.
