China’s Auto Market Saturated as Golden Era Ends: NIO CEO William Li

China’s automotive industry has likely moved past its "golden era" due to market saturation and a prolonged downturn in domestic car sales, NIO Chief Executive William Li stated on Thursday.

Speaking to reporters in Beijing, Li noted that a sustainable rebound in the world's largest auto market has yet to materialize, despite the country's continued export strength. With total vehicle ownership in China hitting 370 million, Li described the domestic landscape as a mature, saturated market rather than a high-growth one.

Industry data supports this cautious outlook, with forecasts showing flat domestic car sales for 2026 and a clear slowdown in electric and plug-in hybrid vehicle growth following years of rapid, aggressive expansion.

Despite the domestic slowdown, Li emphasized that the premium electric vehicle (EV) manufacturer will keep its strategic focus firmly on China rather than aggressive overseas expansion.

While NIO began exporting vehicles to Norway in 2021, its overseas shipments have remained negligible. Li explained that China remains the most capital-efficient environment for pure electric vehicle investments, noting that deploying similar capital abroad would yield slower, highly uncertain returns. He added that internal combustion engines and plug-in hybrids are currently better suited for global markets, whereas NIO deals exclusively in pure EVs powered by its signature battery-swapping technology.

To navigate intensifying domestic competition, Chinese EV makers are betting heavily on advanced driver-assistance systems, in-house software, and broader model lineups to defend their market share.

As part of this survival strategy, NIO plans to increase its spending on computing resources for smart-driving development fivefold this year compared to 2025. High-profile rollouts, such as the launch of NIO’s luxury flagship ES9 SUV this week, are becoming vital tools for carmakers trying to safeguard their profit margins.

Following the strategic announcements, NIO's Hong Kong-listed shares bucked the broader market trend, jumping 10.5% to close at HK$46.08, marking its largest single-day gain since mid-March.