Nio is implementing a new organizational restructuring aimed at tighter cost control, with founder, chairman, and CEO William Li taking a more hands-on role in supply chain management, local media outlet 36kr reported on Monday.
The Chinese electric vehicle (EV) manufacturer has introduced an internal management framework known as the Cell Business Unit (CBU), which is expected to be fully operational in the second quarter. The system divides Nio’s operations into distinct, non-overlapping units, each assigned specific return-on-investment (ROI) targets and a performance-based incentive structure, the report said.
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“The new mechanism requires every penny invested to be heard back,” a source close to Nio’s management told 36kr. Under the CBU model, Nio’s divisions will separately track expenses and anticipated costs for various projects, ensuring greater financial transparency and accountability.
With an increased focus on cost efficiency, Li has become more involved in procurement, personally reviewing key component costs and participating in price negotiations for batteries and other essential parts, according to the report. The CEO is also overseeing supply chain cost-reduction efforts, working closely with procurement teams to adjust pricing strategies based on weekly sales data.
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The restructuring extends to supplier relations, as Nio has integrated suppliers into the CBU framework, making cost structures more transparent. This shift has already yielded savings, with the cost of seats on its latest vehicle platform dropping by 10%, the report noted. The company is also increasing part-sharing across its models, including the soon-to-be-delivered ET9 and upcoming refreshed versions of the ES6, EC6, ET5, and ET5 Touring.
Further cost-cutting measures include relocating a major 40,000-square-meter after-sales service warehouse to a lower-rent location, reducing warehouse logistics and operating expenses by over RMB 200 million ($27.6 million), according to the report.
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Nio is also reevaluating business segments, including its phone division, where it has streamlined operations by merging its mobile software team with its digital cockpit team and reducing redundant positions. Additional restructuring is expected in other business clusters, including the sub-brand Onvo, 36kr reported.
The company has consolidated the delivery channels for Nio and Onvo, while in remote regions such as Harbin, Yinchuan, Urumqi, and Xining, Onvo’s sales operations are now overseen by Nio’s regional general managers, the report added.