NIO's founder, chairman, and CEO, Li Bin, has forecast that the domestic automotive industry should brace for a full-year retail sales decline of 15% to 20% compared to the previous year. He made this assessment at the 2026 China Auto Chongqing Forum, stating that the industry has entered the most brutal final stage of competition, and the market environment this year will be very challenging.
Data from the China Passenger Car Association shows that domestic vehicle retail sales from January to May fell by nearly 20% year-on-year, with the decline in early June exceeding 22%. The entire automotive industry has not yet escaped a state of overall pressure, as the pace of consumption recovery has been slower than industry expectations. Factors such as intense price competition, consumer hesitation, a flood of new model launches, and product homogeneity continue to impact the terminal market.
Against the backdrop of pressure on total vehicle sales, some structural changes are accelerating. In May, the penetration rate of new energy vehicles in the domestic market reached a record high of 62.9%, an increase of nearly 10 percentage points year-on-year. The penetration rate of pure electric vehicles in the entire automotive market reached 42.2%, up 10.8 percentage points from the same period last year. Furthermore, nine of the top ten models in the SUV segment sales ranking were new energy vehicles, with pure electric models locking in the top three spots, making the trend of "electric vehicles advancing as internal combustion engine vehicles retreat" increasingly clear.
Li Bin believes the automotive industry has entered a critical phase of climbing the pure electric inflection point. The market performance of automakers can no longer rely solely on a single hit product or specific feature. Due to factors like rapid technological iteration and severe product homogeneity, the "death valleys" of new model effects are constantly emerging. The traditional fuel vehicle model of competing with one standout feature is giving way to a contest of comprehensive strength, including brand influence, product definition, technological depth, supply chain capability, cost control, and sales/service systems.
The ultimate results of this competition will be directly reflected in sales and financial report data. In the first quarter of 2026, NIO Inc. (NIO) reported revenue of 25.53 billion yuan, a year-on-year increase of 112.2%, and a gross margin of 19%, also reaching a two-year high. From January to May this year, NIO's sales grew by 68%. The strong first-quarter results were supported by the ES8 model. NIO brand deliveries in Q1 were 58,500 vehicles, with the ES8 accounting for approximately 45,000, representing a large majority of total sales. As a flagship product, it also helped elevate the company's overall gross margin.
However, the success of one product cannot substitute for the stable development of the entire company. Li Bin hopes that NIO's three brands—NIO, Ledao, and Firefly—will advance together, maintaining high-end positioning and technological leadership in their respective target markets. Firefly remains positioned as high-end in the small car market, priced about 50% higher than comparable small cars, with main models selling for over 120,000 yuan, supported by configuration and service. Ledao emphasizes technology for the family, safety, and quality, with no compromises in its technical architecture. NIO targets the high-end market, offering full-scenario technological experiences and superior emotional experiences.
Regarding sales volume, NIO's brands do not currently set fixed sales targets for individual models. "We hope that after NIO enters the three-brand development stage, it can maintain growth of 40% to 50%," Li stated. Although Ledao's sales have experienced some fluctuations this year, overall, this two-year-old brand has already begun to take shape. NIO revealed that after the Ledao L90 launched, it ranked first in sales within the pure electric large three-row SUV segment. Following the launch of the Ledao L60, it also ranked among the top three in its class.
"Establishing a new brand is not easy; it's more difficult than imagined," Li Bin said. He originally thought Ledao's brand awareness could be built quickly, but survey data showed many people were unaware of the Ledao brand, with its awareness equivalent to NIO's six years ago or earlier. However, in terms of sales volume, Ledao's current sales exceed NIO's sales volume after two years of deliveries. Ledao Auto President Shen Fei stated, "Originally, Ledao's overall sales climbed very fast, achieving in one year what took NIO four years."
With the launch of the new Ledao L60, NIO has essentially completed its new model releases for the first half of the year and will now focus more energy on selling vehicles and serving users. The new Ledao L60 has a starting purchase price of 202,800 yuan, with a battery subscription plan starting at 142,800 yuan. It integrates several of NIO's flagship intelligent technologies: the self-developed 5nm autonomous driving chip Shenji NX9031, the full-domain 900V high-voltage architecture, the latest version of the NIO World Model (NWM), and the SkyOS·Tianshu system.
On the evening of the June 11th launch event, over 90% of orders for the new Ledao L60 were concentrated on the Max+ and Ultra+ versions, with over 90% of users opting for the fully-equipped combination of the Coconut+ autonomous driving system, Shenji NX9031 chip, and lidar.
Lightweighting is also a major highlight of the new Ledao L60. The body-in-white weight is 377 kg, with a lightweight coefficient of 2.22, and the unsprung mass is 198 kg, representing a weight reduction of 20 kg compared to a conventional steel structure. Statistics show that from January to April 2026, the average curb weight of Chinese new energy passenger vehicles had reached 1,939.3 kg, an increase of 27.5% compared to 2020, accumulating over 400 kg of weight gain in just six years.
The increase in larger vehicles continuously compresses road surface lifespan. For every 20% increase in vehicle weight, the damage rate to the road surface becomes 2.07 times the original rate (1.2 to the fourth power). Additionally, as new energy penetration rates continue to rise, increasing user demand for more space, larger batteries, and full configurations will inevitably impact vehicle handling, safety, durability, and service life. Vehicle weight reduction is imperative, and lightweighting is the necessary path.
Li Bin stated that lightweighting has become an industry consensus, balancing user and societal value while also reflecting a carmaker's comprehensive R&D capability. He identified four challenges in lightweighting: first, trade-offs, such as being restrained in battery choice and not blindly pursuing "big" batteries; second, it's a systematic engineering challenge, where components like intelligent fuses require support from the entire vehicle's high-voltage and low-voltage architectures; third, engineering capability, requiring a balance of safety and structure; and fourth, cost, as using an 85 kWh ternary lithium battery can be over 100 kg lighter than a lithium iron phosphate battery but comes with higher costs.
Discussing costs, Li Bin noted that this year's wave of raw material price increases, with cost pressures from automotive-grade memory and lithium carbonate being passed to the terminal, has increased the per-vehicle cost for Ledao by over 10,000 yuan, translating to a final price impact of about 15,000 yuan. Li Bin candidly stated that supply chain price increases are significant now. "The Ledao L60 has gross margin, but it's quite meager, so the growth in gross margin and profit this year mainly depends on total volume."
Regarding users, Shen Fei noted that among Ledao's additional purchase users, owners of traditional luxury brands account for 35%, joint brand owners for 30%, repeat purchase users within the NIO ecosystem for 10%, and users from other new energy competitors for 10%, totaling about 85%. This indicates that Ledao is attracting many customers from fuel vehicles. From a user perspective, with new energy infrastructure now well-developed and electric vehicle product strength leading, it's a general trend for fuel vehicle users to switch to new energy vehicles.
Li Bin believes, "In previous years, because infrastructure was underdeveloped and charging/battery swap conditions were insufficient, users choosing extended-range or plug-in hybrid vehicles were reasonable. But now users can easily make a choice; choosing pure electric and intelligent electric vehicles is a natural progression." Shen Fei also calculated a detailed account: even including battery rental fees and electricity costs, NIO's battery subscription plan still saves users about eight hundred to a thousand yuan compared to fuel costs. Currently, the penetration rate of NIO and Ledao's battery subscription plans exceeds 90%. Li Bin judges that the industry's overall penetration rate will rise in sync with increasing model sales.
Key Insights from the Interview
Challenges of Vehicle Lightweighting
Li Bin emphasized that achieving lightweighting is very difficult, requiring trade-offs, systematic engineering, strong engineering capabilities to ensure safety, and managing the associated cost increases. For instance, using ternary lithium batteries for longer range without adding excessive weight incurs significant costs.
Battery Swap Standardization and Global Expansion
NIO has participated in formulating Singapore's battery swap standard, a global first for passenger vehicle battery swaps being written into a national standard. NIO has over 60 swap stations in Europe across five countries, including Norway and Germany, and is actively engaging with authorities in Europe and Singapore on swap station standards.
Ledao's User Base and Market Positioning
Data shows approximately 85% of Ledao's users come from traditional luxury brands (like BBA), joint venture fuel vehicles, or are repeat NIO buyers, indicating success in attracting fuel vehicle customers. Ledao positions itself as a high-quality family brand, with an average selling price of 240,000 yuan in Q1.
Product Strategy and Technology Deployment
With new model launches concentrated in H1, NIO will now focus on sales and service. Li Bin expressed confidence in the competitiveness of recently launched models. The new Ledao L60 features NIO's flagship technologies like the 900V architecture and self-developed chip, bringing advanced tech to the 200,000-yuan price segment.
Autonomous Driving and Chip Strategy
Li Bin discussed NIO's self-developed Shenji NX9031 chip, highlighting advantages in inference computing power, memory bandwidth (roughly double the industry), and multi-modal signal processing. He noted increased investment in computing power this year to improve the autonomous driving experience.
Battery Swap vs. Charging Infrastructure
Li Bin views battery swap and charging as complementary, not对立. NIO promotes "chargeable, swappable, upgradable." He highlighted unique values of swap stations: decoupling battery and vehicle lifespan to address different aging rates, acting as distributed energy storage (7 GWh equivalent across 3,900+ stations), and participating in grid services.
Brand Building and Market Challenges
Li Bin admitted underestimating the difficulty of building a new brand like Ledao, noting its current brand awareness is similar to NIO's six years ago. The focus is on clear positioning ("making family life better") and resonating with target users beyond just product specs.
Sales Performance and Outlook
While not setting fixed per-model targets, NIO aims for 40%-50% growth as it operates three brands. Ledao's L90 leads its segment, and the L60 is top-three in its class. Gross margin pressure exists due to supply chain costs, with profit growth dependent on total volume.
Three-Brand Differentiation
NIO, Ledao, and Firefly each maintain high-end positioning in their segments. Firefly is premium in small cars, Ledao is a high-quality family brand, and NIO targets the high-end market with full-scenario tech and emotional experiences. The common thread is high quality and tech leadership within their respective markets.
Convincing Customers: Ledao L60 vs. Tesla Model Y
When asked about convincing a customer choosing between the Ledao L60 and Tesla Model Y, Shen Fei emphasized inviting users to experience the car firsthand. Li Bin pointed out the L60's advantages: similar size to Model Y, more features (fridge, screen, sunshade, etc.) at a lower purchase price (60,000-70,000 yuan cheaper), significant savings compared to Tesla's FSD subscription, and the added benefit of battery swap capability.
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