Industry Wastes Over $100B Annually: Non-Standardized Cells and Excessive Chip Varieties Hinder Smart EV Growth

At the High-Level Forum on Intelligent Electric Vehicle Development held on April 11, 2026, Li Bin, Founder, Chairman, and CEO of NIO, stated that the intelligent electric vehicle (IEV) industry currently suffers over RMB 100 billion in annual resource waste due to non-standardized battery cell specifications and an excessive variety of chips. Li explained that NIO entered a new development phase in the second half of 2025. In the first quarter of 2026, the company delivered 83,465 premium intelligent electric vehicles, a year-over-year increase of 98.3%. Additionally, NIO achieved its first-ever quarterly profit in Q4 2025, with an operating profit of RMB 1.25 billion. Despite these milestones, the broader industry continues to grapple with profitability challenges characterized by “increased volume without increased revenue” and “increased revenue without increased profits.” He attributed this partly to accelerating product iteration cycles. Unlike traditional internal combustion engine vehicles, which typically undergo model updates every five to seven years, today’s EVs experience rapid, simultaneous iterations across multiple dimensions—including batteries, chips, intelligent components, and interior design—significantly shortening vehicle lifecycles. This has intensified the “valley of death” phenomenon associated with the “new car effect,” where vehicles enjoy only brief sales peaks followed by sharp demand drops after production ramps up. Consequently, supply chains face constant adjustments, underutilized equipment, and workforce volatility, resulting in substantial waste. Li emphasized that batteries and chips together account for more than 50% of a vehicle’s total cost, yet balancing their supply and demand remains extremely difficult. Specifically, the lack of standardized battery cell specifications prevents flexible capacity allocation across the industry. He illustrated this by noting that if battery cells were standardized like AA or AAA batteries, fluctuations in sales volumes among different automakers or models would no longer undermine overall supply efficiency. He added that physical structures of mid-nickel and high-nickel ternary batteries have already converged significantly, laying a solid foundation for standardization. Regarding chips, Li pointed out that a single new vehicle model—such as NIO’s ES9—uses over 1,000 semiconductor part numbers and more than 4,000 individual chips, many of which perform redundant functions. Internally, NIO is driving a “consolidation” initiative aimed at reducing the number of chip types used to approximately 400. He called on the entire industry to collaborate on unifying chip specifications and establishing interchangeable standards. Such efforts would increase chip utilization per vehicle, lower barriers to adopting domestic chips, and accelerate the localization rate of automotive semiconductors. According to estimates, achieving both battery cell standardization and chip consolidation could reduce industry-wide waste by over RMB 100 billion annually, significantly enhancing supply chain efficiency and overall profitability.