The era of the 'killer feature' in China’s electric vehicle (EV) market is coming to an end. William Li, the founder and CEO of NIO, argues that the industry is transitioning from a period of chaotic fragmentation into what he calls a 'clarification phase.' In this new reality, consumers no longer purchase a vehicle based on a single impressive specification, such as range or acceleration. Instead, they are increasingly likely to reject a brand based on a single perceived weakness in its ecosystem or service network.
As technical specifications across the industry begin to converge, competition is shifting from isolated engineering feats to 'systematic competition.' Li suggests that brand identity and long-term operational resilience will determine the survivors of this shakeout. This shift marks a maturing market where the novelty of electrification has worn off, and the reliability of the underlying business model becomes the primary differentiator for car buyers.
NIO is positioning itself for this transition through an aggressive multi-brand strategy designed to capture diverse market segments. The company’s core NIO brand remains focused on the premium sector, while the newly launched Onvo (Ledao) and Firefly (Yinghuochong) brands target the mass and entry-level markets, respectively. Li’s long-term vision projects Onvo as the primary volume driver, expected to contribute 55% of the company's total sales, while the flagship NIO brand focuses on higher margins at 35%.
Despite the growth of these sub-brands, Li admits that reaching the mass market requires more than just a lower price point. For Onvo to succeed, NIO must significantly expand its physical footprint beyond China’s Tier-1 and Tier-2 cities. Current sales are limited by a showroom network that is still heavily concentrated in wealthy urban hubs, necessitating a massive 'channel down-sinking' effort into the Chinese interior to reach the next wave of consumers.
In a surprising move for an EV advocate, Li is also calling for a fundamental reform of China's automotive tax structure. He argues that the traditional consumption tax, which is tied to internal combustion engine (ICE) fuel consumption, is becoming obsolete as EVs dominate the roads. To ensure stable funding for road maintenance as gas tax revenues dwindle, Li proposes a new taxation model based on vehicle weight and displacement.
This proposal addresses the growing physical burden that heavy, battery-laden EVs place on public infrastructure. NIO’s leadership team cautioned against taxing vehicles based on energy consumption alone, noting that for hybrid and extended-range vehicles, it is technically difficult to verify the ratio of electricity to fuel used. Instead, a weight-based tax provides a simpler, more transparent mechanism that acknowledges the environmental and structural impact of the modern, larger-scale electric fleet.