Nio spent 2.14 billion yuan on Research and Development (R&D) in the second quarter, a rise of 13.8% from the first and the first sequential increase since it began cutting the line in early 2025.
Despite the increase, it represents the smallest share of revenue the company has ever devoted to research: 6.7%, against 15.8% in the same quarter last year.
Management is due to address the figure on the earnings call at 8:00 a.m. US Eastern Time on Tuesday, where the question is whether the increase marks a turn or a restoration of a floor the company set while it was cutting.
The Series
R&D was 3.18 billion yuan in the first quarter of 2025 and 3.01 billion in the second, then fell to roughly 2.39 billion in the third and 2.03 billion in the fourth, a decline of 44.3% year on year in that final quarter.
It reached 1.89 billion yuan in the first quarter of this year, below the bottom of the company’s own guidance range, before the second quarter’s 2.14 billion.
Across the first half, spending was 4.03 billion yuan against 6.19 billion a year earlier, down 34.9%.
Excluding share-based compensation, the adjusted figure was 1.98 billion yuan in the quarter, down 20.3% year on year and up 16.1% sequentially.
Nio attributes the annual decline to lower personnel costs following organisational optimisation and to development work being at a different stage, and the sequential rise to incremental design and development costs for new products and to increased personnel costs in research functions.
The Intensity
Measured against revenue, the retreat is far larger than the absolute figures suggest, because revenue has been growing while spending fell.
R&D was 19.9% of revenue in the first half of 2025. In the first half of this year it was 7.0%.
Quarterly, it has gone from 15.8% of revenue in the second quarter of 2025 to 7.4% in the first quarter of this year and 6.7% in the second.
Per vehicle delivered, spending has more than halved in a year, from about 41,700 yuan to about 19,900.
The cut was not incidental. Nio’s annual filing shows group headcount falling to 35,032 from 45,635 during 2025, a reduction of 10,603 people, or 23%.
Product and software development fell to 6,912 from 11,528, a cut of 4,616 or 40.0% — the steepest of any function, and one that followed two years of stability at around 11,200 to 11,500. Manufacturing was the only function that added headcount, rising to 9,653 from 7,441.
On an annual basis, research spending has gone from about 13.4 billion yuan in 2023 to 13.0 billion in 2024 and roughly 10.6 billion in 2025, a fall of 18.6% in the most recent year.
The first half of 2026 at 4.03 billion puts the company on course for 8.0 billion to 9.0 billion if the guided range holds.
The first-quarter results in May showed how narrow the margin of that discipline is: the shares swung from sharp gains to losses on a warning about input costs, even as the research line hit its low.
What Management Said
The direction was set on the first-quarter 2025 call in June last year, when Nio told analysts it would cut research spending by 20% to 25%, to between 2 billion and 2.5 billion yuan a quarter, as it pursued a break-even target.
At the fourth-quarter 2025 results in March, chief financial officer Stanley Yu Qu restated the range and added a second commitment: that the annual total for 2026 would roughly match 2025.
He tied it to the company’s CBU mechanism, which he said would improve research efficiency and avoid ineffective spending.
On the first-quarter 2026 call in May, management said the range would be enough to fund work on chips and operating systems while sustaining annual new-model launches, and described the CBU mechanism as having significantly improved research productivity.
Founder and chief executive William Li put the efficiency claim in figures on the same call, telling investors that the yield from 2 billion yuan of research investment is now equivalent to perhaps 3.5 billion in past years.
Speaking at an industry forum in April, Li argued that batteries and chips now account for more than half of a vehicle’s cost, and that standardising batteries and unifying chip specifications could release more than 100 billion yuan of savings across the industry.
He had said in January that memory chip volatility had overtaken battery costs as the biggest variable in the company’s production planning for the year.
Li put Nio’s cumulative research investment at more than 68.8 billion yuan over eleven years when he spoke at the China Auto Chongqing Summit in June.
Some of these remarks reach us through transcript summaries rather than the primary recording, so check the wording against the transcript before quoting directly.
The Two Commitments
Four quarters at the top of the guided range gives 10 billion yuan. The 2025 total, summing the reported quarters, comes to roughly 10.6 billion.
So even at the ceiling of its own quarterly guidance, Nio would spend less this year than last.
The first half puts it further behind. Spending of 4.03 billion annualises to about 8.06 billion, or 24% below 2025.
To match last year the company would have to spend about 6.58 billion yuan across the second half, or 3.29 billion a quarter, well above the range it has guided to.
Bernstein analyst Eunice Lee has flagged the decline, warning it could leave Nio exposed as competitors accelerate their own investment.
The Chip Programme
The strongest answer to the under-investment charge is the one piece of research spending Nio can put a number on.
The Shenji NX9031 was decided on in 2021, built by a team of more than 600, taped out in July 2024 and reached customers in the ET9 in March 2025.
Li has put its development cost at the equivalent of building 1,000 battery swap stations — several billion yuan on the company’s own per-station figures, though another account of his remarks puts it at 1,500 stations, so the figure should be attributed rather than stated flat.
Co-founder and president Qin Lihong said the chip delivers computing power equivalent to four flagship parts and cuts costs by more than 10,000 yuan a vehicle, and that once value-added tax and gross margin are counted, that becomes about 20,000 yuan of room on price.
Li has framed the same saving from the other side, disclosing that Nio had been paying Nvidia as much as $300 million a year, or roughly $1,100 a vehicle, for chips it now makes itself.
Deployment is scaling.
Management told the first-quarter call that the chip had shipped in more than 250,000 units and would be in over 80% of vehicles in the second half of 2026. It reached the Onvo L90 in April, which Li described as putting a flagship driving chip into the 200,000-to-300,000-yuan segment for the first time.
The programme has also begun earning. LatePost reported in November 2025 that Nio had started licensing NX9031 technology to an automotive chip company, the first external deal, with terms undisclosed.
Set against the cost warnings running through the year, the arithmetic is close to a wash. The chip saves about 10,000 yuan a vehicle. Raw materials and memory added more than 10,000 a vehicle from the second quarter, on the company’s own guidance. One in-house programme is roughly offsetting one commodity cycle.
GeniTech
One part of the research programme is increasingly paid for by someone else.
GeniTech, known as Shenji and described in Nio’s filings as the subsidiary primarily responsible for its intelligent-driving chip business, raised 2.257 billion yuan from Chinese investors in a round announced on February 26, after which a Nio subsidiary held 62.7%.
Tuesday’s results disclosed two further rounds in June and August, raising 493 million yuan at a post-money valuation of 12.25 billion. A Nio subsidiary now holds 59.95%.
The February round implies a post-money valuation of about 8.27 billion, so the unit has been marked up roughly 48% in six months, while Nio’s stake has fallen 2.75 percentage points across the year.
Management also told the first-quarter call that Shenji had completed a 200 million yuan financing round in the first quarter, funding next-generation, cost-optimised chips.
Whether that sits inside the February agreements or is separate is not clear from the disclosures, and is worth asking.
Nio said in February that it would continue to consolidate Shenji, so the spending remains inside the research line. What has changed is who supplies the cash and who owns the result.
