Finance
Chinese Ev Maker Nio Bets on In-House Chips to Cut Reliance on Nvidia
Published by Global Banking & Finance Review®
Posted on April 24, 2026
2 min readLast updated: April 24, 2026
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NIO is developing its own in‑house Shenji chips to better align with its AI and sensor systems, cut costs linked to Nvidia’s high margins, and boost long‑term profitability. The newly spun‑off chip unit is also seeking external customers to expand its tech reach.
NIO Invests in In-House Chip Technology to Cut Nvidia Dependence and Raise Profits
NIO's Strategic Shift Towards In-House Chip Development
Reducing Reliance on External Suppliers
BEIJING, April 24 (Reuters) - NIO is betting that in-house chip development will sharpen its technological edge and improve profitability, Chief Executive William Li said on Friday, as the Chinese premium EV brand pushes to reduce reliance on suppliers such as Nvidia.
Custom Silicon for Enhanced AI Capabilities
Li said NIO developed its own silicon so its chips could better match the company's algorithms and sensor layout, particularly for AI functions such as advanced driver-assistance.
Profitability and Cost Considerations
He told Reuters in an interview that Nvidia's automotive chips have "very high gross margin," and that by making its own chips NIO could eventually lift its overall profit, despite higher upfront research-and-development costs.
Expansion and Market Competitiveness
Spinning Off Shenji as an Independent Chip Unit
Nio has spun off its chip unit, Shenji, into an independent company, which Li said is open to supplying chips to external customers.
Long-Term Global Competitiveness
Li said NIO's nanometer-scale automotive-grade chips and whole-vehicle operating system would be central to its long-term global competitiveness.
Opportunities in the High-End EV Market
The rise of China's electric vehicle makers presents a "significant opportunity" to redefine the high-end and luxury car market, Li added, opening doors for NIO to become a global premium marque.
(Reporting by Ju-min Park, Zhang Yan and Qiaoyi Li; Editing by David Dolan, Kirsten Donovan)
Key Takeaways
- •NIO’s Shenji NX9031 5‑nm chip delivers computing power equivalent to four Nvidia Drive Orin X units, aiding performance and cost savings (ic-pcb.com)
- •Shenji has been spun off as independent GeniTech, raising over ¥2.2 billion (~$318 million) at a valuation near ¥10 billion; NIO retains a controlling 62.7 % stake (caixinglobal.com)
- •Total production of in‑house chips (Shenji NX9031 and Yangjian LiDAR chip) has exceeded 550,000 units, delivering significant per‑vehicle cost reductions (cnevpost.com)
References
Frequently Asked Questions about Chinese EV maker NIO bets on in-house chips to cut reliance on Nvidia
1Why is NIO developing in-house chips?
NIO is developing in-house chips to better match its algorithms and sensor layout, particularly for AI functions, and to reduce reliance on suppliers like Nvidia.
2How will in-house chips impact NIO's profitability?
NIO expects that producing its own chips will eventually improve overall profitability, despite higher initial R&D costs, by lowering supplier margins.
3What is the role of NIO’s spun-off chip unit, Shenji?
Shenji has been spun off as an independent company and is open to supplying chips to external customers.
4How does NIO see its position in the global EV market?
NIO sees the rise of China's electric vehicle makers as a significant opportunity to redefine the luxury car market and boost global competitiveness.
