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NIO's phone: ¥500m a year for an accessory nobody asked for
NIO spent ¥500m a year building a phone for its car owners; by 2025 the team was cut, the software folded into the cockpit unit, and it became an accessory.
NIO · 2025-03-10
What happened
On 21 September 2023 NIO unveiled the NIO Phone at its Innovation Day: three versions from ¥6,499 to ¥7,499, built on a Snapdragon 8 Gen 2, with UWB car-key and 30+ in-car controls. Founder Li Bin said it was 'built for Nio owners' and 'not meant to compete with Huawei or Xiaomi' — a phone whose job was to sell cars, priced like a flagship.
The economics never worked. NIO ran a 500-person phone team spending roughly ¥500 million a year — a second business with its own supply chain, sales and after-sales — while Li Bin's own success bar was that half of NIO owners buy one, a rate the phone never approached.
From December 2024 NIO reshuffled the phone business: the mobile software team was merged into the digital cockpit unit and duplicated positions were cut. By March 2025 the phone had been downgraded from an independent business to an ecosystem component — built to sell cars, now run like a car part.
Why it happened
- NIO built a flagship phone as a defensive accessory: the goal was a better car experience, not a phone business — which meant a ¥500m-a-year cost centre with no revenue target it could hit.
- The 'half of owners buy one' bar ignored that most owners already owned a phone — UWB key fobs and in-car controls were features, not reasons to spend ¥6,499 on a second phone.
- The phone needed its own supply chain, sales and after-sales teams — the same cost structure as a phone maker — while its only job was to make cars sell, so every quarter the ROI check failed.
The lesson
NIO spent ¥500 million a year on a phone that was supposed to sell cars; by 2025 it was folded into the cockpit unit. An accessory that costs like a flagship is a donation, not a strategy.
Aftermath
The NIO Phone continued as a low-key accessory line — the software team reporting to the cockpit division, headcount trimmed from around 500 — while company-wide cost controls (the CBU mechanism) reshaped how NIO ran every side business. Li Bin's 'half of owners' ambition was quietly retired, and the phone's job description became: sell cars.
Sources
- CnEVPost — Nio launches 1st smartphone: Starts at $890, connects deeply with cars, 21 September 2023 (three versions ¥6,499–7,499; Snapdragon 8 Gen 2; UWB; 30+ car controls; Li Bin quotes)
- CnEVPost — Nio making organizational changes to focus more on cost control, report says, 10 March 2025 (phone reshuffle since December 2024; mobile software team merged into digital cockpit; duplicate roles cut)
- Sina Finance — 蔚来手机业务收缩 新款宣传图流出 战略方向要变？7 May 2026 (500-person R&D team; ~¥500m annual spend; software team folded into digital cockpit; ROI did not match; phone repositioned as ecosystem component)
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