Upstart Chinese electric vehicle (EV) maker Nio is betting that its technological sophistication will give it a competitive advantage over rivals like Tesla.

Nio’s entry into the smartphone industry a little over a year ago was initially perplexing given the company’s success in EV manufacturing. However, recent developments have shed light on Nio’s strategy.

In August, Nio’s Android smartphones were granted approval by Chinese authorities for internet access and connectivity. This enables Nio to integrate their smartphones with vehicles using ultra-wideband (UWB) technology. Only a limited number of Android phones currently have access to UWB technology.

UWB technology, renowned for its precise positioning capabilities, adds an extra dimension to Nio’s smartphones. In addition to standard Bluetooth connectivity, UWB equips the smartphones with location recognition capabilities.

Nio’s foray into UWB technology aligns with a similar move by Huawei. On August 4, Huawei announced new short-range wireless connectivity technology called NearLink.

NearLink leverages the strengths of traditional wireless technologies like Bluetooth and Wi-Fi. It’s suitable for various connectivity scenarios across consumer electronics, EVs, and industrial automation.

How digital car keys work

Strong connectivity and precise positioning are essential requirements for automakers seeking to use smartphones as digital car keys.

While current smartphone-based digital car keys rely on Bluetooth Low Energy (BLE) for stable connectivity, they often lack the ability to accurately determine user positions. Although they can unlock vehicles when nearby, their positioning accuracy is limited.

Luxury car companies like Nio aim to enhance the connection between vehicles and smartphones by incorporating features like positioning and identification. This integration is expected to provide users with a smoother and more convenient experience.

Experts in the industry suggest that Nio’s UWB technology and Huawei’s NearLink are capable of recognizing drivers, co-drivers, and rear-seat passengers. This information can improve vehicle settings and enhance hospitality features.

In addition, Nio has joined the Car Connectivity Consortium (CCC) to establish industry standards. The CCC oversees the adoption of BLE, UWB, and other connectivity technology.

Standardization across the industry could pave the way for digital car keys to become a significant market segment.

However, digital car keys remain controversial. Privacy experts warn that digital car keys are vulnerable to hacking. This could lead to the theft of vehicles and personal information.


Developing digital car keys poses challenges for vehicle manufacturers.

Implementing these keys on the Android platform requires not only Bluetooth communication but also integration with a car control app. The Android system’s features, such as background app closure, can cause stability issues for car control apps.

Some automakers have sought to address this issue by paying smartphone manufacturers to keep their car control apps active. However, this approach may not always be effective. Automakers may be reluctant to overpay, and smartphone manufacturers may not fully cooperate.

For Nio, the challenge extends beyond solving connectivity issues. The company must also persuade iPhone users who own Nio vehicles to switch to Android phones.

Apple has specific Bluetooth protocols in place that provide developers with independent privileges upon registration. This enables iPhones to function as digital car keys even after the car control app is deleted.

However, as companies aim to go beyond Bluetooth and use UWB technology for digital car keys, Apple’s closed ecosystem becomes a hurdle. While both Nio vehicles and Apple smartphones are equipped with UWB modules, Apple restricts access to its development interfaces. This makes it difficult for car manufacturers.

To date, BMW appears to be the only automaker with the rights to develop UWB technology using Apple’s interface. This likely influenced Nio’s decision to venture into smartphone development.

According to KrASIA, Nio is expected to invest billions of dollars into its smartphone technology each year. This could eventually cause Nio’s smartphones to gain additional unique features.