The Right Path and the Besieged City: A Former NIO Employee's Observations on the New-Energy Vehicle Industry

As a former NIO employee who regretfully left after less than three years, I’ve never stopped paying attention to this company and this industry. Over the years I’ve scattered a lot of fragmented comments and opinions across various places; here I’m trying to weave them into a complete piece, to lay out systematically how I see NIO, the new-energy vehicle (NEV) industry, and the consumer market.

I may not be right—but this is what I genuinely think.

I. What Actually Constitutes a Moat

There’s a point I keep coming back to: innovation at the framework level is very hard to dethrone.

Look across the industry’s giants and you’ll find they all defined some paradigm, while the competitors within the industry mostly compete on single-point differentiation inside that paradigm. Tesla defined what an electric car should be; Apple defined what a smartphone should be. Within their frameworks, competing by piling on specs and configurations rarely breaks the siege. This is precisely why these two companies have been declared doomed countless times online, yet remain evergreen in the real consumer market—not until a new innovator breaks the besieged city do new rules and a new order get established.

Conversely, any single-feature experiential advantage, if it can’t be folded into a sufficiently stable and sustainable system, is fragile and limited in value. Consumers aren’t fools. Flashy specs can attract people for a moment, but what truly retains consumers and builds reputation is always the experience. And specs do not equal experience—the completeness and forward-looking design of hardware and software, paired with continuously upgradeable ecosystem capabilities and an extremely long usable lifespan, together constitute the experience that actually matters.

What NIO is doing, fundamentally, is trying to become the definer of the next framework.

II. NIO’s Experience Commitment

Many people say NIO is expensive. NIO is indeed expensive, but it’s expensive in experience—and experience is grounded in how the product itself is defined.

An analogy: if you buy a phone and only look at core specs—flagship chip, big battery, fast charging—you can get that for a little over two thousand yuan. But if you also want quality, design, and ecosystem experience, you need at least a five-thousand-plus flagship. The two-thousand-yuan phone’s specs might not lose to the five-thousand one, but specs are not a commitment to experience. These are two different things.

The iPhone is the best illustration. The iPhone 12 series, five years ago, already defined UWB and MagSafe, and to this day it can enjoy the entire Find My ecosystem and the MagSafe ecosystem on equal footing with the latest iPhones—that is a high commitment to experience. Apple achieved a long maintenance cycle for system software and treats old and new models equally in ecosystem capability. Few people question whether the growing number of iPhone models will become hard to maintain, because the complexity is hidden from the user.

NIO is doing the same thing. The first-generation ES8 has been delivered for over seven years now, the first-generation ES6 for six, and they’re still running on the road today with fresh batteries, with software continuously maintained—I have no doubt they’ll last more than ten years. The first-generation platform still has a sizable installed base overall, while same-era pure-electric models from other new-energy brands have nearly vanished. From what I’ve seen, the NEVs delivered more than five years ago that still have a meaningful installed base can be counted on one hand—Tesla Model S, Model 3, NIO’s first-gen ES8 and ES6, basically that’s it.

When hardware isn’t the weak link, software matters far more than hardware. NIO’s entire energy-replenishment service system and its continuously upgraded, maintained software are its experiential moat, and the foundation of its models’ long lifecycle. NIO’s design level, materials, and safety standards were aimed at a service life of more than ten years from the start. Time will force every model built on gimmicks and low prices to expose enough quality problems. A car that can still take to the road in good condition ten years after delivery is the one with real foresight.

For models within the battery-swap system, whether some spec is the very best available right now matters far less than many assume. Just as the iPhone 13’s 5nm chip is inferior to the iPhone 17’s 3nm, under Apple’s ecosystem capabilities the experience gap is nowhere near as large as the spec gap, because the product definition itself is sufficiently forward-looking and the product roadmap is planned for the long term. This is vividly reflected in NIO’s models as well.

III. Battery Swap: The Art of Hiding Complexity

The most absurd criticism leveled at NIO is the demand that all batteries share a universal physical spec, regardless of model.

This is imagining physical structures out of thin air—a shallow understanding of automotive manufacturing and even less understanding of the swap system. The “unified battery” many netizens imagine is a false proposition. Swap technology has never pursued “one battery universal to all models,” but rather “limited unification” according to model and platform. Insisting everything must have one grand unified standard is unrealistic; standardization has boundaries, and in industry you have to distinguish operating conditions.

Even dry-cell batteries come in roughly ten physical specifications. Fantasizing that the ES8 and the Firefly share one battery is like expecting the AA in your mouse, the AAA in your remote, and the button cell in your watch to all be unified—not theoretically impossible, but pointless. That’s not the right answer.

What has already been unified is the protocol, not the physical dimensions. Multiple battery types are exactly what allow flexible adaptation to different brands and models, and the swap station hides the complexity—the owner doesn’t need to worry about battery scheduling, they just place an order and swap. It’s like swiping a card: you don’t need to know how many card types the POS terminal supports, you just need it to accept the UnionPay card in your hand.

I think the public’s skepticism toward NIO’s swap system is, at its core, a trust problem. We’ve developed too fast; we’ve never tried trusting a complex, long-term engineering system that comes out of a Chinese company. On top of that, experience from the planned economy and from national projects like high-speed rail biases our engineering intuition toward “grand unification.” But systematization is precisely not grand unification—it’s maintaining a consistent experience across diversity. iPhone models keep proliferating, with growing differences in screen size and memory, yet Apple pushes system updates to all models in unison, the complexity hidden from the user—unlike Android, which offloads part of the system-maintenance complexity onto the user. NIO is doing the same thing—as long as it can keep operating over the long term, it will earn the trust of more and more consumers, and by then how many battery types there are won’t matter.

And what battery swap actually solves at its core is this: the battery, the durability weak point among an EV’s components, is backstopped for the user by NIO’s swap system. The battery inspection and repair items that a non-swap car has to return to the factory for are, for a swap car, completed automatically with every swap. Battery swap is not the opposite of pure-electric; it’s a systematized solution built on top of pure-electric.

IV. The Endgame for Range-Extenders: A Transitional Product Shouldn’t Be a Cash Cow

Range-extenders (EREVs) are, for now, the meta answer—but the endgame of range-extension is definitely pure-electric.

The underlying logic of this judgment is simple: a transitional technology path can only compensate for a new technology’s immaturity during its development stage and ease anxiety while user perception hasn’t caught up. Once the information gap is closed and the new technology matures, the transitional path gets eliminated outright. In the era of full touchscreen phones, only on full touchscreen phones could the functional and interaction revolution of phones be driven forward; you can’t, just because users were used to keyboard phones, go and push a slide-out-keyboard touchscreen phone as a transitional product.

The qualitative leap for pure-electric is coming. The information gap is gradually turning into a generational technology gap—through step-by-step mass-production iteration, pure-electric’s high-integration advantage is already something range-extenders can’t catch up to or paper over by other technical means. In experiential terms: pure-electric cars are lighter and smaller than range-extenders yet have more space, more advanced electrical architecture, lower whole-vehicle system latency, and higher performance floors and ceilings across cockpit, powertrain, and chassis. Range-extenders, meanwhile, carry too heavy a dual-system burden—a small battery that needs frequent charging, plus the user having to worry about battery, fuel tank, and engine all at once. They’ve collected the downsides of both EVs and gas cars.

A large fraction of EREV users, frankly, never figured out their own needs. They pin the “just-in-case anxiety” their minds conjured onto a generator, only to find that in daily life they’re both reluctant to burn fuel and that the “just-in-case” never materializes—they’re just hauling a fuel tank around, charging a small battery, using it, charging it again.

Today’s big-battery range-extender is, fundamentally, tactical diligence (piling on batteries) papering over strategic laziness (the absence of an energy-replenishment system). To solve the extreme refueling scenarios that make up a vanishingly small share of the year, you make the user haul hundreds of kilograms of generator and fuel tank around empty across all their usage scenarios—in engineering terms that’s inefficiency and waste. The sense of security the fuel tank provides is only temporary psychological comfort; an efficient pure-electric charging network is the endgame.

NIO’s Shen Fei is completely right: rolling out a big-battery range-extender product is exploiting user habits—skimming one more round of profit in the twilight of the range-extender era—which only hinders the industry’s progress and slows product revolution. Consumer perception lags, and habits are hard to change; this is not the consumer’s fault. But if a major industry player only exploits the information gap to pander to short-sighted consumers and make quick money, it’s straight-up doing harm.

My judgment—and I may be wrong—is that the qualitative turning point arrives within three years. The manufacturers that tilt their limited resources heavily toward range-extenders for more short-term profit, while underinvesting in pure-electric, not only slow the pace of pure-electric technology iteration but artificially prolong the transition period, ultimately leaving consumers with fewer good options. The brands pushing range-extenders for quick money are going to get washed up on the beach soon.

One more factual note: NIO happens to be one of the carmakers in the Chinese market that has opened the most charging stalls to outside brands—over 80% of its charging stalls serve non-NIO EVs. Anyone who claims NIO only cares about swapping and ignores charging should check the facts first.

V. The Price War: Consumers Can’t Stand Apart From It

I voiced the view early on that consumers should be wary of the NEV price war. Sadly, many people just delight in watching manufacturers drive prices down, without realizing the cost behind it.

“What I least want to see is a price war that ends in terrible quality.” Even this point eludes a lot of people—they don’t even think of it when buying a car, waving the flag for the price war and feeling smug about scoring “value for money” at the expense of quality.

The essence of a price war is low quality at low prices. Don’t assume that as a consumer, cheering for the price war means you come out ahead—it’s a vicious cycle: carmakers and the supply chain can’t make money, industry development is constrained, product quality keeps breaking through to the downside, and consumers lose access to good products. Cutting prices is easy—just cut configurations. Do you really think “value for money” is a good thing? Safety standards and quality control are hard-cost domains. Some products look like great value but are really just a cost-allocation scheme: dazzling specs and an affordable price inevitably come with hidden compromises.

For some models the battery isn’t even the durability weak point—other components fail before the battery does. These models were never designed for a service life beyond ten years; whether they make it five years without a major problem is anyone’s guess.

The kind of consumers you have determines the kind of products you get; consumers can’t stand apart from it. If most consumers only stare at price, the market will fill up with low-quality, low-price products. This market doesn’t lack value-for-money offerings, and value-for-money isn’t the only viable business logic in the world. Demand is diverse, and a market this large can accommodate all kinds of products. The quality NIO insists on building is something other brands haven’t taken it upon themselves to do.

Innovation inevitably comes with heavy investment. The companies that stay in their comfort zone doing low-level redundant construction by riding the trend, and the companies that wage price wars by cutting cost and quality without limit—those are the ones wasting society’s resources. When such companies thrive, the industry pays a painful price.

VI. The Value of Design and the Choices Consumers Make

“Taste” alone makes it hard for me to choose Xiaomi. Xiaomi may fit the public’s demand for practical products better, but I can’t overlook its shortcomings in design. I’m willing to pay for the value of design—I’d rather spend more than compromise.

Why does the public find the SU7 handsome yet not particularly mind the copied design? Because what the public wants is merely “a sense of luxury,” not “real luxury.” Names like Porsche, McLaren, Ferrari are meant as compliments, not insults—getting a similar design at a lower price is satisfaction enough. Design itself is part of the cost, and at this stage of a market dominated by practicality, many consumers are unwilling to pay a premium for design itself: it’s not that people don’t know original design is good, they just feel it’s nice-to-have but unnecessary—design can be a bit worse as long as it’s cheap and plentiful.

The same logic explains why some people use “bare-shell apartment” to disparage Tesla’s design—consumers with insufficient aesthetic sense judge a design language that exceeds their framework using their own limited aesthetic framework, and can only arrive at the conclusion that it’s “ugly.”

Pragmatism and efficiency produce affordable products; heavy investment and innovation produce industry paradigms. The public chose the former and curses the latter. So in a market dominated by practicality and value-for-money, stop asking why there’s no premium or originality—where would all this wanting-it-both-ways come from? Wanting it cheap and with design character. Dream on.

VII. CarPlay: An Overrated Patch

Demanding that EVs support CarPlay is like demanding a laptop come with an optical drive.

The reason traditional CarPlay exists is simple: traditional carmakers can’t get the in-car system experience right, and CarPlay is a third-party patch that brings a qualitative leap to that experience. But the new-energy players don’t have this weak point—their in-car systems are functionally and experientially complete, deeply coupled with the smart cockpit. CarPlay is merely an external multimedia-navigation system projected onto the screen, entirely unrelated to the smart cockpit itself. Plenty of Japanese-brand laptops still have built-in optical drives—does that mean the laptop has a good experience because it has an optical drive?

CarPlay 2 tries to partner with carmakers to gain capabilities coupled to the cockpit, but that’s a lovely fantasy—carmakers won’t outsource core functions to Apple. Apple lacks automotive engineering experience and doesn’t have the ability to do it well, much as Kingsoft, a maker of application-layer software, crossing over to develop HyperOS for Xiaomi phones would.

VIII. Hollowed-Out Technology: The Tide Will Go Out

For a carmaker, true integrity and pragmatism mean settling down and carefully honing the driving experience and the safety and quality, iterating steadily rather than fast—not maintaining surface-level prosperity through marketing packaging and cost-and-quality cutting. Wrapping outdated technology in an “intelligent” shell and then going all-out on promotion is naturally a false prosperity—it looks like you’ve captured the consumer’s mind, but in the end you’re sure to hurt others and yourself. When the tide goes out, the result won’t play along with your act.

A car is not a phone. A phone can aggressively force-push silicon-carbon batteries at the cost of battery lifespan to satisfy consumers’ craving for big batteries—worst case, you handle the defects through after-sales. A car is bound tightly to people’s lives. The short-term gains from aggressiveness—autonomous driving, for instance—carry enormous risk.

The new-energy carmakers that stick to genuine forward R&D are the ones whose foundation gets seen when the tide goes out. The carmakers chasing crowd-pleasing gimmicks will, like Smartisan, exit the stage in a sudden death after doing one-shot business. As for which carmakers have long-term aspirations and which are short-term dabblers—let’s wait and see.

IX. NIO’s Three Brands: From Premium to Refined

NIO’s three brands each have a clear positioning. NIO itself is New Money—new luxury, leading with design and taste. Onvo (Ledao) is aimed at families, inheriting NIO’s advanced electrical architecture and emphasizing engineering tuning, delivering an excellent ride without deliberately piling on materials. Firefly is a refined small car built on a high-standard subtractive philosophy, inheriting NIO’s top-tier aesthetics and refined design, with class-leading safety and a sense of quality in its price segment.

Anyone who’s touched a real Firefly knows the car was designed to a high standard—from the paint texture and interior detailing to the top-tier aesthetics of its UI & UX, to its safety configuration and spatial layout, it leads its price segment outright. It’s the result of subtraction starting from the standard of a sweet-spot price model—like a “2,000-yuan iPhone 16e,” whose chip, software, and industrial design are built to flagship quality. A “2,000-yuan Redmi” like the ID.3, or a “1,500-yuan Redmi” like the Dolphin, simply doesn’t have this quality—it’s an entirely different thing.

NIO’s initial service style was closer to that of a traditional luxury carmaker, serving a top-down clientele, so being out of touch with the grassroots was inevitable. The style should have shifted once Onvo launched; only after Shen Fei took over did it gradually adapt to the market’s rhythm.

Conclusion

NIO—a high-value-added new-energy brand trying to keep cultivating technology and design deeply—being hated by its own countrymen is rather remarkable. There are plenty of “clever people,” which is why NIO is unpopular in public opinion and “goes bankrupt” every year. But if every new-energy player did only what netizens wish for—value-for-money and practical products—and earned itself the label of “pragmatic” or “listens to advice,” that would look like praise but is in fact short-sighted, and the market would fill up with homogeneous brands doing low-level redundant construction.

Pragmatism and efficiency can produce affordable products; heavy investment and innovation can produce industry paradigms. NIO belongs to the latter, and being doubted in today’s market—one that chases practicality and value-for-money—is inevitable.

I’ve always believed NIO walks the right path, doing the hard but correct thing. Among NEV companies it’s one of the few with vision and persistence, with the temperament and potential to become a world-class company. Not until a new innovator breaks the besieged city of the previous innovator do new rules and a new order get established.

I believe NIO will be the next successful innovator.