Chinese EV-maker Nio is to axe 10% of its workforce as it buckles under the pressures of increased competition and an ongoing price war in the auto sector.
Demand for EVs has dropped off in China as consumers opt for more economical plug-in hybrids, sales of which rose 84.5% in the first nine months of the year, helping carmakers such as Li Auto and BYD to gain market share.
Nio has told staff the reduction exercise would be completed in November, it said in a statement.
“We still have a gap between our overall performance and expectations,” it told staff in an email, adding that it needed to improve efficiency and ensure adequate resources. “This is a tough but necessary decision against the fierce competition.”
Also on AF: China Allows Ant Group to Release Finance AI Products to Public
A price war started by US auto maker Tesla at the beginning of the year is dragging down the profitability of pure EV makers, like Nio, which have stepped up efforts to prune costs and build partnerships to survive the consolidating competition.
Nio, which rebounded from a sales slump in the first half, delivered 109,993 EVs in the first nine months this year, up 33.4% on the year-earlier period to outpace growth of 18.1% in China’s EV sector overall.
Apart from the layoffs, Nio said it would defer or cut long-term project investments that would not contribute to financial performance within three years.
Nio, which sells cars in China and Europe through its self-owned stores, is also considering building a dealer network in Europe to speed sales growth, it was reported last month, to ease cash pressure on the loss-making company.
- Reuters with additional editing by Sean O’Meara
Read more:
China EV Startup Nio Seen in Tech-For-Cash Talks With Mercedes
Automaker Nio to Include Self-Developed Mobile Phone in EVs
China’s BYD Posts Highest Ever Quarterly Profit With 82% Jump
Nio Cuts Prices, Ditches Free Battery Swapping as Sales Slump
Threat of More Rate Rises Slowing the Shift to Electric Vehicles
