Why Chinese Automaker NIO is Betting on its In-House Chips

Chinese EV maker NIO is developing its own custom AI chips to reduce dependence on suppliers like NVIDIA. 

The company is building its chips for EVs under a subsidiary company Shenji, NIO CEO William Li said according to Reuters.

Shenji received an additional US$330m in funding from Chinese investors earlier this year. 

NIO’s custom chips are used in its EV models on technology like advanced vehicle assistance, with NIO’s NX9031 chip set to launch in the Onvo L90.

NIO’s custom chips

NIO has been investing in developing its in-house R&D capabilities of smart hardware, such as advanced chips, high-performance sensors, smart domain controllers and other core components.

Speaking to Reuters, William said that in-house chip development would sharpen the company’s “technological edge” and improve profitability. 

He ​said NIO's nanometer-scale ​automotive-grade ⁠chips and whole-vehicle operating system would be central to its long-term ​global competitiveness.

William told Reuters that the rise of China's electric ​vehicle ⁠makers presents a "significant opportunity" to redefine the high-end and luxury car market, opening ⁠doors ​for NIO to become "a ​global premium marque".

Reducing dependence on NVIDIA

According to GasGoo, NIO relied on NVIDIA chips in previous years, hitting a peak spend of US$300m annually. NVIDIA is the world's largest company with a market cap of US$5.09tn. 

William told Reuters 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.

NIO’s subsidiary Shenji received US$330m for its intelligent-driving chip related business in February of 2026 from a group of investors in China. 

There has been ongoing uncertainty around US restrictions on AI chip exports to China, with the Council on Foreign Relations describing the situation as "strategically incoherent" in January of 2026. China is reportedly blocking imports of some NVIDIA chips as it pushes for domestic production. 

How the NIO's chips are used

William told Reuters that 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.

NIO has established a smart driving R&D system spanning platforms, architecture, engineering, algorithms and operations. 

The smart driving system is enabled by NIO’s proprietary AI models, as well as individual and collective intelligence. NIO says on its website that Assisted & Intelligent Driving is available for battery swapping, parking, highways and urban roads.

NIO’s technology includes mass-produced proprietary technologies such as the NX9031 smart driving chip.

Gasgoo reported in April 2026 that the Onvo L90, a subsidiary brand of NIO, would feature the automotive-grade computing chip, the NX9031.

Chinese Luxury EVs

NIO’s smart features are used in its vehicles like the ET9, a 650 km of range luxury EV, which features the NIO Cedar Smart System featuring an AI agent and advanced driver assistance. 

The company is currently strengthening its global reach having expanded into Singapore, Uzbekistan and Costa Rica over 2025 and 2026 through partnerships with local distributors.

A McKinsey survey people who had made or were considering a purchase of a luxury car showed that 71% were unwilling or very unlikely to consider buying a Chinese luxury brand as their next vehicle. The respondents were from Asia, Europe, the Middle East as well as North and South America.

However, the data suggested that willingness to consider the purchase of a Chinese luxury car was highest for innovation seekers at 46%.