Li Bin's Latest Internal Speech: NIO to Focus on Core Business, Premium Segment, and Key Markets Over the Next 3 Years

China's auto industry is undergoing a rare contraction. Data from the China Passenger Car Association (CPCA) shows that cumulative retail sales in the passenger vehicle market fell by more than 20% year-over-year, and Li Bin describes the current intensity of competition as "the most brutal stage of the finals." Yet in the same internal speech, his strategic answer for NIO is surprisingly restrained—not expansion, but a contraction to three keywords.

A Counter-Trend Case in an Industry Winter

According to exclusive information obtained by Leiphone, Li Bin delivered an internal speech to all employees lasting over an hour. At that point, only a few hours had passed since the CPCA released its latest sales data. Against the backdrop of an industry-wide decline of over 20% year-over-year, NIO delivered 262,893 vehicles from January to August, a year-over-year increase of 57.9%, with all three brands hitting record highs.

This set of contrasting data forms the premise for understanding the entire speech. Li Bin did not shy away from the brutality of the industry; he reminded the team that "the squeeze from much of the competition will also be transmitted over, so we must be fully mentally prepared." But he also emphasized that NIO has entered the "third phase of high-quality development" since the second half of last year, with deliveries, revenue, operating profit, gross margin, operational quality, and brand all needing to improve in tandem.

From a financial perspective, this judgment is supported by data: three consecutive quarters of profitability, vehicle gross margin maintained at around 18.5%, and non-vehicle business gross margin between 17% and 20%. At the brand level, the NIO brand ranks first in the market above 400,000 yuan, with an average selling price of nearly 440,000 yuan in July; Onvo's average price reaches 240,000 yuan; and Firefly holds nearly 70% of the premium small car market.

CPCA (China Passenger Car Association) is one of the most frequently cited sources of sales data in China's auto industry. Its weekly and monthly retail and wholesale data are regarded as core indicators for observing the temperature of the domestic passenger vehicle market. Its statistical scope mainly covers narrow passenger vehicles (sedans, SUVs, MPVs), excluding commercial vehicles such as microvans, so it is often directly referred to by the media as the "auto market overall."

Understanding the phrase "year-over-year decline of more than 20%" requires distinguishing between wholesale volume and retail volume: the former is the volume manufacturers send to dealers, while the latter is the volume actually sold to consumers at the terminal. A year-over-year decline in retail better reflects the real contraction on the demand side, and it is also the data basis for Li Bin's repeated reminders to the team in the internal speech that "competitive squeeze will be transmitted over."

Three Focuses: A Restrained Version of the Three-Year Strategy

When asked about the strategic goals for the next three years, Li Bin's answer was just one sentence: "Focus on the core business, focus on premium, focus on core markets."

Behind these three focuses is a clear line of logical deduction. Li Bin revealed in the speech that NIO's share of China's auto market is only a little over 2%, and even in the mid-to-high-end market it is only 4% to 5%, leaving enormous room for growth. He took regional markets as an example: in the first half of this year, NIO ranked first in passenger vehicle sales in Shanghai, with about 8% market share, and also ranked first in cities such as Hefei. If the whole country could reach Shanghai's share level, there would still be 3 to 4 times the growth space in sales; even if it only reached the level of the Yangtze River Delta, it could support several years of 40% to 50% growth.

One detail: this focus is not passive contraction, but active choice. Li Bin mentioned that in past years the company took detours in product definition—the product definition and planning of second-generation products did not meet expectations. After a deep review in 2023, it established a target market analysis framework, and "do some things, not others" became a new product principle.

The direct results of this approach are the ES8 and ES9. Li Bin revealed that the all-new ES8 is estimated to deliver more than 150,000 units a year, with an average price of over 400,000 yuan; orders for the ES9 are already backed up to the point where customers need to wait three months. He attributed this to the implementation of the 6P framework—adding people (frontline fellows) and platform (productized marketing tools) to the traditional 4Ps, forming NIO's own business operating system.

The EV Tipping Point Theory: Breaking Through in Penetration Rate Is Only a Matter of Time

Li Bin spent considerable time in this speech arguing for a trend judgment: the tipping point for battery electric vehicles has arrived.

The data he provided: in August, new energy vehicle penetration reached 65.2%, BEV penetration in the new car market was 45.3%, making it the only powertrain still growing. Pure fuel vehicles fell 45% that month, and both extended-range and plug-in hybrids also declined. BEV sales were 8.6 times those of extended-range vehicles. Battery-swapping BEVs grew by nearly 60% year-over-year.

Supporting this trend is the increasing density of infrastructure. NIO has built more than 4,000 battery swap stations, with more than 5 million public charging piles nationwide and about 25 million including private piles, making the charging and swapping network effect increasingly strong. Li Bin's judgment is that in the fourth quarter of this year, new energy penetration may exceed 70%, and before the end of the year, monthly BEV penetration has a chance to exceed 50%. In the longer term, by 2030, 90% of new car sales will be new energy vehicles, and 90% of those will be BEVs.

This judgment is directly related to NIO's product layout. Li Bin's tipping point theory proposed last year—"the golden age of extended-range large three-row SUVs has passed, and the era of battery electric large three-row SUVs is arriving"—has now been validated by the market performance of the ES8, ES9, Onvo L90, and L80. He attributed this to an essential rule: the experiential benefits that BEVs bring to users have already far exceeded the experiential losses caused by charging and swapping inconvenience.

Penetration rate refers to the proportion of a certain type of product in overall new car sales, and is a key indicator for judging the pace of technological route replacement. Two levels need to be distinguished: first, "new energy penetration rate," covering all electrified models including BEVs, extended-range, and plug-in hybrids; second, "BEV penetration rate," counting only battery electric vehicles. The tipping point Li Bin discusses is precisely the second structural change after new energy penetration has already become high: BEVs continuing to squeeze the share of extended-range and plug-in hybrids within new energy vehicles.

Extended-range and plug-in hybrids are often grouped together as the "oil-and-electric" route: the engine of an extended-range vehicle does not directly drive the wheels and is used only for power generation; the engine of a plug-in hybrid can drive directly and has a more complex structure. Both were regarded as transitional solutions when charging facilities were insufficient, and their declining share is often interpreted as a signal that charging network density is already sufficient to support daily BEV use.

From Product Competition to System Competition

A recurring concept in the speech is "system competitiveness." Li Bin believes that the auto industry has never been an industry of single-point competition, and in a long-distance industry, single-point competition makes it hard to sustain leadership.

This philosophy is reflected at multiple levels. On the brand dimension, he cited McKinsey survey data saying that when users buy new energy vehicles, the brand factor has risen from fifth place to second place. NIO, Onvo, and Firefly each target different groups: NIO anchors the upgrade and repurchase needs of BBA users, Onvo attracts former Toyota and Volkswagen high-end product users, and Firefly enters the premium small car market with 9 airbags and a first-place crash test result.

In intelligent driving, Li Bin revealed that after the full release of a new version to 700,000 users on the second- and third-generation platforms on June 18, user satisfaction and usage rates increased significantly. Currently, nearly 20% of used-car users pay to subscribe to the assisted driving system. He expects that in the visible future of five years or even longer, the embodied intelligent agent with the highest single-unit value and the largest industry scale will be the intelligent electric vehicle, and the company will continue to increase investment in core talent incentives and computing power.

Embodied AI refers to intelligent systems that have a body in the physical world, can perceive the environment, and act autonomously, with humanoid robots being the most typical carrier. Li Bin classifies intelligent electric vehicles into this category because the vehicle itself has a complete closed loop of perception (sensors), decision-making (computing power and models), and execution (chassis, motors), and has already achieved large-scale mass production and real data feedback, so in both single-unit value and industry scale it far exceeds humanoid robots still in their early stages.

This judgment also explains NIO's attitude toward embodied intelligence—it does not build the body itself, but concentrates resources on intelligent vehicles that already have scale effects, while maintaining contact with frontier directions through strategic investment and cooperation.

The Second Growth Curve: More Than Just Selling Cars

"There is still enormous room for growth in the core business," was Li Bin's opening remark on the question of the second growth curve. But he then gave a growth engine that is easily overlooked—services and community business.

According to Leiphone, NIO's services and community business exceeded 10 billion yuan in full-year revenue for the first time in 2025, with revenue of 5.8 billion yuan in the first half of that year. It has achieved profitability for multiple consecutive quarters, with profits sufficient to cover investment in charging and swapping infrastructure. Li Bin defines it as "a business of installed base," a value other companies do not possess.

The connotation of the second growth curve is still expanding. Battery swap electricity grew from more than 2 billion kWh last year to more than 3 billion kWh this year, and the power and energy business is becoming an independent growth pole; autonomous driving subscriptions are growing along with the installed base business; and NIOLife's GMV in the first half of the year was also considerable.

As for the currently hot embodied intelligence, Li Bin's attitude is relatively calm: NIO may participate through strategic investment for a long time, will not make it a main business, and is more willing to explore through cooperation with startups.

The Key to AI Native Is Organization, Not Tools

When asked how the company's AI strategy can move from "tool application" to "AI Native," Li Bin's answer pointed to the organizational level rather than the technical level. He believes that what matters more for NIO in AI is whether the entire organization can match the development trend of AI. The CBU mechanism the company is promoting is connected to the underlying logic of ontology in enterprise AI applications.

This answer reveals the way NIO understands AI: not treating AI as a tool that can be purchased, but internalizing it as the underlying logic of organizational structure and operating mechanisms. The CBU mechanism essentially breaks down company business into quantifiable, traceable, and optimizable basic units, which indeed has a methodological mapping to the structured knowledge representation required by AI systems.

Li Bin's judgment on the industry's prospects also carries this long-term perspective: "If there really were no room for progress left, that would indeed be boring. But we still have enormous room for progress. We have only been vigorously focusing on operations and management for a year and a half, and we already have so many gains."

He concluded with one sentence summarizing NIO's rhythm—build hard camps, fight dull battles, advance one step each day, and achieve lasting results through sustained effort. At the most brutal stage of the industry, this may be more persuasive than any grand narrative.

ontology in the AI context is not a philosophical concept, but refers to the formal description of entities, attributes, and their interrelationships within a certain domain. It is the foundational structure for knowledge graphs and agents to perform reasoning and invocation. Without a clear ontology, AI systems find it difficult to understand the hierarchy and dependencies among business objects.

CBU is the management mechanism promoted by NIO, whose core is to break down company business into basic operating units that can be independently accounted for and quantitatively assessed, so that each unit can be clearly defined, tracked, and optimized. Li Bin compares it to ontology to illustrate that only when business objects within the organization are clearly defined in a structured way can AI have a semantic foundation for implementation; otherwise, even the strongest model can only remain at the level of scattered tools.

One-line Summary

NIO grows against the trend in an industry winter, and Li Bin offers a restrained strategy focused on the core business, premium segment, and key markets.

Paragraph Summary

In an industry winter where passenger vehicle retail sales fell by more than 20% year-over-year, NIO delivered 262,893 vehicles from January to August, up 57.9% year-over-year, with three consecutive quarters of profitability and vehicle gross margin of about 18.5%. In an internal speech, Li Bin gave the strategic answer for the next three years: focus on the core business, focus on premium, and focus on core markets. Using Shanghai's roughly 8% market share as a reference, he believes there is still 3 to 4 times growth space nationwide. He also argued that the BEV tipping point has arrived, with BEV penetration in new cars reaching 45.3% in August, the only powertrain still growing, and predicted that monthly BEV penetration could exceed 50% before the end of the year. In addition, the services and community business exceeded 10 billion yuan in annual revenue for the first time and continues to be profitable, forming a second growth curve; on embodied intelligence and AI strategy, Li Bin emphasizes organizational mechanisms rather than tools themselves.