William Li, CEO of Nio Inc, has warned that China's auto sales could drop by 15% to 20% this year due to a saturated market and increased competition. Despite this, he expects Nio to achieve sales growth of 40% to 50%. Nio's recent deliveries from January to May showed a 68.7% year-on-year growth, and the company reported significant profits in the last quarter. Li highlighted the challenging market conditions, as the domestic auto retail market fell by 19.5% during the first five months of the year. Nio continues to invest heavily in technology and infrastructure, with a multi-brand strategy successfully gaining market share. The overall trend towards electric vehicles is seen as irreversible, driven by improved infrastructure and consumer preferences.

Nio's William Li warns of China auto sales drop while backing own growth

Phate Zhang•Jun 14, 2026, 9:05 PM GMT-4

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A Nio ET5 on display at the Beijing Auto Show in April 2026. Credit: CnEVPost

William Li expects domestic retail sales in China's auto industry to fall by 15% to 20% this year.

He also reaffirmed expectations of Nio achieving a 40% to 50% annual sales growth this year.

William Li, founder, chairman and CEO of Nio Inc (NYSE: NIO), issued a stark warning that domestic retail sales in China's auto industry could fall by 15% to 20% this year. At the same time, he reaffirmed expectations for the company to achieve strong growth against the broader market trend.

Speaking at the China Auto Chongqing Summit on June 13, Li painted a grim macroeconomic picture for attendees. He noted that China's auto industry has entered the most brutal final stage of competition starting this year. The entire market is undergoing a fundamental shift from an era of incremental expansion to a saturated market driven by replacement demand.

Despite the challenging macroeconomic environment, the Chinese EV maker remains highly optimistic about its own growth.

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Li reaffirmed that Nio Inc expects to achieve an annual sales growth of 40% to 50% this year. This target aligns with the expectations set by the company when it reached the milestone of its one millionth production vehicle rolling off the assembly line in January this year.

The latest delivery data demonstrates the company's recent strong business momentum. Between January and May this year, Nio Inc delivered a cumulative total of 150,526 new vehicles, achieving a year-on-year growth rate of 68.70%.

In terms of financial performance, the company has also reached a significant turning point. Nio Inc posted an operating profit of 1.25 billion yuan ($184.8 million) in the fourth quarter of last year. In the first quarter of this year, the company sustained its profitability, recording an operating profit of 68 million yuan.

Regarding the overall domestic market, Li pointed out that any illusions within the industry about a sales rebound should be completely shattered. In the first five months of this year, the domestic auto retail market fell by 19.5% year-on-year.

Entering June, the decline widened further, with the drop in the first few days even exceeding 22%, he noted.

Li emphasized that the auto industry is a marathon on a muddy road. During this challenging transition period, there are no miracles or shortcuts to quick victories. Companies must build solid foundational skills and carry out company-wide operational transformations centered around creating user value.

To survive and win in this brutal knockout stage, the company continues to invest heavily in core technologies.

Li highlighted that over the past 11 years, Nio's cumulative research and development investment has exceeded 68.8 billion yuan, and its investment in infrastructure such as charging and battery swap networks has also surpassed 20 billion yuan.

Nio Inc's multi-brand strategy is currently playing a positive role in the market. In addition to the main brand, its mass-market sub-brand Onvo and premium compact car brand Firefly are also performing well.

Firefly's sales in the premium compact car market have exceeded the combined total of Mini and Smart, and it has essentially been the sales champion in this segment since its launch, Li said.

From the start of deliveries last April to today, Firefly has consistently been in a state where demand slightly outpaces supply. If customers order a Firefly now, they will still have to wait a bit for delivery, he said.

Furthermore, the company's flagship ES8 model has been the sales champion in the large SUV segment for six consecutive months. The Onvo brand's L90 and L60 models have also garnered strong market demand, and these product lines are helping the company rapidly expand its overall market share.

Li also highlighted the accelerating upward trend in the penetration rate of the pure electric market. In May this year, China's NEV penetration rate reached 62.9%. Among them, the penetration rate of pure electric models in the overall powertrain market has climbed to 42.2%.

Month	2024	2025	2026
January	32.8%	41.5%	38.6%
February	35.8%	49.5%	44.9%
March	41.6%	51.1%	51.5%
April	43.7%	51.5%	61.4%
May	47%	52.9%	62.9%
June	48.4%	53.3%
July	51.1%	54%
August	53.9%	55.2%
September	53.3%	57.8%
October	52.9%	57.2%
November	52.3%	59.3%
December	49.4%	59.1%

China Passenger NEV Penetration at Retail 2024-2026

China passenger NEV penetration at retail

2024 2025 2026

70%

60%

50%

40%

30%

20%

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

He believes this trend of transitioning to pure electric vehicles is irreversible. With the rapid popularization of charging and battery swap infrastructure, the experiential benefits of pure electric models are significantly improving.

Automakers' share in China's NEV market in May: BYD ranks first with 21.8%, Tesla returns to top five - CnEVPost

Tesla's retail sales in China rebounded sharply to 47,281 units in May, returning to the top 10 NEV list and entering the top 10 in the overall passenger car market.

BYD

Jun 10, 2026

($1 = 6.7634 yuan)

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Nio's William Li warns of China auto sales drop while backing own growth

Nio's William Li warns of China auto sales drop while backing own growth

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Phate Zhang

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