Nio's William Li urges more focus on battery life as warranties expire on nearly 20 million NEVs over next 8 years

William Li, founder, chairman and CEO of Nio, called for more focus on long-life batteries and for the entire industry to work toward the goal at an electric vehicle (EV) industry forum.

Based on a technical standard introduced in China in April 2015, EV makers generally offer an eight-year or 120,000-kilometre warranty for power batteries, Li said in a Mar 16 presentation at the China EV 100 Forum in Beijing.

That warranty standard has a major factor in promoting the purchase of new energy vehicles (NEVs) by private consumers, who have gradually risen since 2016, reducing the share of operational vehicles to a very small fraction, Li said.

Cumulative insurance registrations of NEVs with eight-year warranties have amounted to 19.41 million units over the past eight years, but starting this year, their warranties will begin to expire, he said.

In the absence of a warranty, consumers will have to bear high costs when replacing battery packs, Li said, giving some examples:

1. For a plug-in hybrid electric vehicle (PHEV) with a 30-kWh battery pack, after-sales service costs RMB 58,000 yuan (USD8,060).

2. For a 40-kWh pack used in an extended-range electric vehicle (EREV), it's 86,000 yuan.

3. For a battery electric vehicle (BEV), the cost would be even higher.

Under current warranty standards, most car companies require that the battery's usable capacity fall below 70% during the warranty period in order to qualify for a warranty, Li noted.

If the usable capacity of the battery pack falls below 70%, there will be safety issues and the car-using experience will be greatly affected, he said.

In the past few years, China's EV players have addressed issues including battery safety, range, charging efficiency, and cost, but the country's standards have not improved further when it comes to battery life, Li said.

For the nearly 20 million NEVs that will lose their warranties over the next eight years, if each vehicle requires consumers to pay RMB 60,000 to resolve subsequent issues, that totals more than RMB 1 trillion, Li noted.

At the same time, these batteries are not suitable as energy storage batteries and can only be recycled, he said.

"China contributes 60% of global NEV sales, so we are facing this problem first. From my point of view, it's urgent to solve the battery life issue," Li said.

At the long-life battery strategy communication, Nio had already set out the company's goal of having batteries last 15 years and have no less than 85% of usable capacity at end-of-life, Li said in the China EV 100 Forum presentation, adding that 15 years is a reasonable lifespan for a vehicle.

"It's technically feasible, it's just that we have to set that target, we have to define that thing," Li emphasized.

These efforts will be beneficial to users and will have long-term societal benefits, but will require the entire industry to move forward together, he said.