William Li Makes the Case for Standardization at Nio’s Annual Event
Nio CEO William Li used the company’s annual NIO Day event this week to call for industry-wide standardization of electric vehicle batteries and AI chips, arguing that the current proliferation of proprietary standards is imposing enormous and unnecessary costs on the entire EV ecosystem. According to CarNewsChina, Li estimated that standardization across battery form factors, charging interfaces, and AI chip architectures could save the Chinese EV industry approximately ¥100 billion per year — a figure he described as “money being burned for no competitive reason.”
Li’s intervention is significant because Nio has historically been one of the stronger advocates of proprietary battery technology, having built its battery swap network around a specific battery form factor incompatible with competitors’ vehicles. The call for standardization, therefore, represents a notable shift in the company’s public position, driven by the recognition that the fragmentation of the market is now imposing costs that outweigh the competitive advantages of proprietary systems.
The Battery Standardization Problem: Why Fragmentation Is Costing the Industry
China’s EV market has produced a remarkable diversity of battery technologies, form factors, and management systems. BYD’s blade battery, CATL’s CTP architecture, Nio’s swappable packs, and dozens of other proprietary designs have each been developed with specific performance and cost targets in mind. The result is a market where batteries from different manufacturers are largely incompatible, making it impossible to build shared charging and swapping infrastructure that serves multiple brands.
This fragmentation has real costs. Battery manufacturers must maintain separate production lines for each customer’s specifications. Charging network operators must support multiple connector standards and communication protocols. Recycling facilities must process batteries with different chemistries and form factors. Li’s ¥100 billion estimate, while difficult to verify independently, reflects a genuine consensus among industry insiders that the current level of fragmentation is economically irrational and that the industry has reached a scale where the benefits of standardization would outweigh the competitive costs of giving up proprietary advantages.
AI Chip Standardization: The Next Frontier for EV Cost Reduction
Li extended his standardization argument beyond batteries to AI chips, arguing that the proliferation of proprietary intelligent driving chips, each requiring separate software stacks, development tools, and supply chain relationships, is creating a second layer of unnecessary complexity and cost. As Chinese EV makers race to develop increasingly sophisticated autonomous driving capabilities, each company has invested heavily in its own chip architecture: Nio has its own chip, BYD has partnered with multiple suppliers, and Xpeng has developed its own XNGP computing platform.
The result is a fragmented ecosystem where software developed for one platform cannot be ported to another, where talent trained on one architecture has limited transferability, and where the fixed costs of chip development are duplicated across dozens of companies rather than shared. Li argued that a common chip architecture, or at least a common software abstraction layer, could dramatically reduce these costs while preserving competitive differentiation at the application level.
The Political Economy of Standardization in China’s EV Sector
Li’s call for standardization will resonate with Beijing, which has been pushing for greater coordination in the EV sector as part of its broader effort to address industrial overcapacity and improve the global competitiveness of Chinese manufacturers. The government has previously used standardization mandates to consolidate fragmented industries, the charging connector standard GB/T 20234 is one example, and there is appetite in regulatory circles for a similar approach to batteries and chips.
However, standardization in a competitive market is always a political process as much as a technical one. Companies that have invested heavily in proprietary systems will resist standards that commoditize their advantages. BYD, which has the largest market share and the most vertically integrated supply chain, has the most to lose from battery standardization that levels the playing field. The outcome will depend on whether Beijing chooses to mandate standards or merely encourage them — a distinction that has historically made the difference between successful and failed standardization efforts in Chinese industry.
For Nio specifically, the call for standardization carries a degree of strategic self-interest that warrants acknowledgment. The company’s battery swap network, which requires customers to use Nio-compatible battery packs, is currently a proprietary system that locks users into the Nio ecosystem. If Nio can persuade the industry to adopt its battery form factor as the standard, it transforms a proprietary advantage into an industry-wide infrastructure play, potentially opening its swap network to vehicles from other manufacturers and dramatically expanding the addressable market for its battery-as-a-service business model. The standardization call is therefore not purely altruistic. It is also a bid to make Nio’s existing infrastructure the foundation of the industry’s future.