Chinese electric-vehicle maker Nio is implementing measures this month to improve its viability in the face of increasing competition and mounting losses. The Shanghai-based company plans to reduce positions by approximately 10% and cut or delay certain investments, according to an internal letter from founder and CEO William Li seen by Dow Jones Newswires.
In the letter, Li acknowledged that these job cuts were a difficult yet necessary decision to combat the fierce competition. He expressed regret for the gap between the company's overall performance and expectations, stating that the next two years will be marked by intense competition in an uncertain automotive industry landscape.
Nio aims to expand its market share and move towards profitability amidst industry-wide price cuts and growing competition from rivals such as BYD and XPeng. In the second quarter, Nio recorded a net loss of 6.06 billion yuan ($828.4 million), a significant increase from previous quarters.
Although revenue fell in the last quarter, Nio's deliveries in October rose by 60% compared to the previous year, amounting to over 16,000 vehicles. Deliveries during the first 10 months of the year also saw a 36% increase, totaling more than 126,000 units.
Nio remains committed to its core products and will ensure their timely release. However, any project investments that do not contribute to financial performance within three years will be deferred or cut.
By Ben Otto
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