Auto Chips

Several Chinese investors will inject RMB 2.257 billion ($330 million) into Nio's chip business, valuing the operation at about RMB 8.27 billion.

This brings the post-investment valuation of Nio's chip unit to nearly RMB 10 billion.

If all cost increases are borne by automakers, they could completely erode profit margins, UBS said.

"Potential cost pressures this year are quite significant. The biggest cost pressure isn't raw materials, but memory chips," said William Li.

Li Auto will begin commercializing its M100 chip next year, hoping it will deliver a significant upgrade to the user experience of its products.

Nio has begun external supply of its Shenji NX9031 chip technology, licensing it to an automotive chip company, according to LatePost.

The chip is expected to be delivered within the next 3-5 years, with a single-chip computing power of about 500 to 700 TOPS.

When running tasks for large language models, one Li Auto M100 chip delivers effective computing power equivalent to two Nvidia Thor-U chips.

Nio will take orders from other automakers after spinning off its chip business, according to a local media report.

Nio plans to cede a small stake to strategic investors and will retain control over its chip project, according to local media.