nio challenges nvidia with in-house chip, aims for ev self-sufficiency

2025-03-31 nvidia

shanghai, Monday, 31 March 2025.
nio is making strides in electric vehicle technology. The company is actively reducing its reliance on nvidia. nio is using its own automotive-grade 5 nanometer chip. nio’s chip entered mass production faster than nvidia’s next-gen product. the new chip promises significant savings. nio’s ceo, li bin, mentioned that the investment in one nio chip equals the cost of deploying 1,000 battery swap stations. this highlights nio’s commitment to innovation and cost efficiency in the ev sector.

nio’s chip details and market impact

NIO’s ET9 model features the self-developed NS9031 chip, a 5nm automotive-grade processor [2][4]. Li Bin, NIO’s CEO, stated that this chip’s performance equals or exceeds that of four NVIDIA Orin X chips [2][6]. This advancement allows NIO to reduce its reliance on NVIDIA, potentially impacting NVIDIA’s revenue stream from the Chinese electric vehicle market [1][7]. Yang Yuxin, CMO of Black Sesame Technologies, suggests that while car companies are developing their own chips for software investment savings and differentiation, third-party chip suppliers will continue to exist for a long time [8].

cost savings and competitive advantage

The adoption of NIO’s in-house chip is projected to yield significant cost savings [1]. NIO previously spent over $300 million on NVIDIA Orin X chips annually [7]. The transition to self-developed chips in the ‘5566’ models is expected to increase the gross profit margin by several percentage points in 2025 [7]. This move provides NIO with a competitive edge. The company gains greater control over its technology and supply chain [7]. An industry analyst described NIO’s move as bold but necessary in the current market [7].

nvidia’s market position and future prospects

NIO’s shift towards self-sufficiency poses a challenge to NVIDIA’s market position in the automotive sector [7]. NVIDIA faces increasing competition from companies developing in-house solutions [8]. Simultaneously, NVIDIA is also working on future technologies. Huang Renxun revealed that adopting GAA transistor technology could improve NVIDIA’s new GPU performance by 20% in 2028 [5]. These advancements could help NVIDIA maintain its competitive edge despite challenges from companies like NIO [5].

nio’s strategic vision and investment

NIO’s investment in chip development is substantial. Li Bin compared the cost of developing one chip to the cost of building 1,000 battery swap stations [2][4]. NIO’s research and development investments totaled 13 billion yuan in 2024, following 13.4 billion yuan in 2023 [1][7]. NIO aims to fully transition to its own chips by the end of 2026, demonstrating a long-term commitment to self-sufficiency [8]. NIO’s strategic vision includes opening its chip technology and operating systems to industry peers [7].

Bronnen

chip development competitive advantage