NIO Calls for Standardization of Batteries and Chips in Electric Cars: Possible Savings of 12 Billion Euros
William Li, founder and CEO of NIO, took a strong stance at the Intelligent Electric Vehicle Development Forum 2026 in Beijing: unify battery cell specifications and reduce the variety of chips installed in vehicles to free up over 100 billion yuan (about 12.4 billion euros) in savings across the entire supply chain, without eroding the margins of any player in the supply chain. The appeal is directed at the entire industry and explicitly to regulators.
The starting point is a structural fact: batteries and chips account for over 50% of the cost of an electric vehicle. The rapid turnover of EV models, much faster than that of traditional vehicles, creates chronic imbalances between supply and demand, anticipates the obsolescence of models on sale, and fuels what Li called a "death valley of the new model": the phase in which a newly launched vehicle already sees its sales prospects eroded due to an imminent and technologically advanced successor. The result is an industry that churns out volumes but compresses margins.
On the battery front, the fragmentation of cell specifications hinders any flexible allocation of production capacity. Li drew an analogy with AA and AAA batteries in the consumer electronics sector: universal formats that never create production capacity issues. The dominant chemistries in the automotive sector, namely LFP, NMC with medium nickel, and NMC with high nickel, have already achieved sufficient technical convergence to make standardization feasible. The proposal is therefore for four or five unified cell formats for the Chinese market, capable of covering the entire range of vehicles and stabilizing the cell supply chain.
On the semiconductor front, Li presented a direct example from his own house: the ES9, the latest NIO model, features over 1,000 types of semiconductors for a total of more than 4,000 individual chips. NIO is already working on internal streamlining with the goal of reducing to about 400 references. The current complexity is not just a direct cost problem: with such fragmented volumes per reference, the adoption of Chinese domestic components becomes economically disadvantageous because no part number reaches the necessary scale thresholds. Therefore, standardization would also be the main lever to accelerate the localization of the semiconductor supply chain, with NIO aiming for a domestic procurement rate between 35% and 40% by 2027.
According to Li, the solution requires direct involvement from regulatory authorities, who need to coordinate with manufacturers to define unified categories of chips with interchangeable standards. The point was explicit: it is not about redistributing profits within the supply chain, but about eliminating systemic waste and duplicated design costs, fragmented inventory, with supply risks multiplied model by model. The expected savings would translate into a reduction of several thousand yuan per vehicle, with benefits distributed evenly across the entire value chain, from the cell supplier to the final manufacturer.
The context makes this appeal even more urgent. The boom in artificial intelligence is already pushing memory chip prices upwards, with an added burden that could exceed 860 million euros in aggregated terms for large automotive groups just in 2026. For NIO, which registered its first profitable quarter in its history earlier this year and aims for annual profitability, the rationalization of key components is a concrete competitive necessity, not a theoretical goal.
The full analysis of Li's speech is available on Car News China.