China-based electric vehicle manufacturer Nio Inc is currently managing a significant recall encompassing 246,229 units due to a software-related safety concern. This represents the largest recall ever issued by a domestic EV company in China. The vehicles affected include the ES8, ES6, and EC6 models, manufactured from March 16, 2018, through January 16, 2023.
According to a statement by the State Administration for Market Regulation reported on Monday, the identified software problem can cause a momentary blackout of both the instrument cluster and the central control screen. Such screen blackouts potentially jeopardize vehicle safety by impacting driver awareness and control interface visibility.
To address the issue, Nio plans to offer a two-tiered solution: a remote software update where feasible, complemented by physical upgrades at authorized service centers when necessary. This recall volume represents approximately 75% of the company’s forecasted vehicle sales for 2025, underscoring the significance of the action across Nio’s market footprint.
This recent recall surpasses the scope of a prior recall initiated by Xiaomi Corp, which affected over 115,000 SU7 electric sedans to remedy safety issues related to assisted driving functionalities. In addition to Nio, another Chinese EV manufacturer, Zeekr, announced a recall of 38,277 vehicles due to power battery-related safety defects as per regulatory disclosures.
Despite the current recall challenges, Nio's stock price experienced a surge last Thursday following the release of an encouraging profit alert for Q4 2025. The company anticipates achieving an adjusted operational profit ranging from 0.7 billion to 1.2 billion Chinese yuan (equivalent to roughly $100 million to $172 million USD) in that quarter. Such results represent a marked recovery from a substantial loss of 5.54 billion yuan posted in the same quarter of 2024.
Nio's vehicle deliveries in January 2026 demonstrated robust momentum with a 96.1% year-over-year increase, totaling 27,182 cars. The third-generation ES8 model prominently led these deliveries, comprising almost two-thirds of the total units sold. These delivery figures contributed to Nio surpassing a cumulative milestone of one million vehicles sold since its inception.
Looking forward, Nio is concentrating efforts on advancing smart electric vehicle technology. The company is preparing to launch an updated iteration of its "Nio WorldModel" in January 2026. This upgrade is expected to enhance functionalities including assisted driving capabilities, intelligent parking solutions, and overall vehicle safety features.
To support continued expansion and customer convenience, Nio is also investing in its battery swapping and charging station network. This infrastructure development serves as a foundational element for sustaining future growth and competitiveness in the evolving EV market.
This proactive infrastructure expansion is part of Nio’s broader strategy to maintain market traction amid stiff competition from other Chinese EV makers, such as Li Auto Inc and XPeng Inc, both of which recently reported declines in their delivery volumes.
As of Monday, Nio’s share price declined by 2.68%, trading at $4.91 according to Benzinga Pro data. This price movement reflects investor caution amid the extensive recall actions, despite the positive operational profit report and delivery growth.
Nio’s recall and profitability journey spotlight the complexities facing electric vehicle makers. Navigating software reliability issues while driving strong sales and product innovation remains critical to sustaining long-term viability in a rapidly maturing domestic market competing fiercely with international rivals like Tesla Inc.
Key Points:
- Nio recalls 246,229 units of ES8, ES6, and EC6 models due to a software issue causing screen blackouts, representing China’s largest domestic EV recall.
- The recall vehicles were manufactured between March 2018 and January 2023, affecting roughly three-quarters of Nio’s projected 2025 sales volume.
- Nio expects adjusted operational profit between 0.7 billion and 1.2 billion yuan for Q4 2025, rebounding from a significant loss the prior year.
- The company reported 96.1% year-over-year delivery growth in January 2026, led by the third-generation ES8, surpassing one million cumulative deliveries.
- The safety-related software defect prompting the recall could affect customer perception and sales momentum.
- Recall implementation requires effective software and service interventions, which could impact operational resources.
- Competition intensifies as rivals Li Auto and XPeng experience delivery declines, heightening market pressure on Nio.
- Share price volatility following the recall announcement reflects ongoing investor concerns regarding quality control issues.