China's Tesla Rival NIO to Lay Off 1,200 Workers After Co-Founder Announces His Retirement
【Summary】Chinese electric automaker NIO plans to reduce its workforce by at least 1,200 by the end of September, William Li, founder, chairman and CEO of the high-profile EV startup revealed yesterday in an internal email to employees.
Chinese electric automaker NIO plans to reduce its workforce by at least 1,200 by the end of September, William Li, founder, chairman and CEO of the high-profile EV startup revealed yesterday in an internal email to employees. The news of the layoff was first reported by auto industry site Gasgoo.
NIO, which is often referred to as the "Tesla of China" will retain roughly 7,500 employees after the cut, said Li. The staff adjustments will be conducted as part of efforts to further control cost and improve the company's operation efficiency so as to concentrate resources on core businesses.
Mr. Li took over as NIO's new CEO last week after co-founder and former VP Jack Cheng annnounced his sudden retirement on Aug 14. In an internal memo to employees, the company wrote that Mr Cheng had retired from the automaker "due to his age".
Growth of the EV market in China has slowed this year as the government cut subsidies for purchases, which hit NIO especially hard.
NIO plans to reduce its headcount in human resources, law and finance. However the layoffs would have little impact on NIO's core operations such as R&D for its vehicles and user services.
NIO announced earlier this month that it delivered 837 new vehicles in July, 2019, versus 1,340 units handed over a month ago. Among vehicles delivered last month, 673 units and 164 units came from the ES6s and the ES8s, the Chinese EV startup said.
As of July 31, combined deliveries of the company's ES8 and ES6 amounted to 19,727 units, of which 8,379 vehicles were handed over in 2019.
NIO stated that its delivery performance in July was negatively impacted by multiple factors, among them is China's slowing auto market and a electrical fire in one of NIO's flagship ES8 SUVs.
In June, NIO was forced to recall 4,803 of its flagship ES8 SUV due to a problem with the vehicle's battery pack, which caused at least one vehicle to catch fire. The NIO inspectors, along with the supplier of the battery pack, concluded there was a vulnerability in the design of the battery that could cause a short circuit.
The recall forced NIO to prioritize battery manufacturing to repair the recalled vehicles, which significantly affected its production and delivery results.
Rumors began to surface stating NIO was ready to pull out of the New York Stock Exchange and was planning to relist on China's new Nasdaq-style stock market focused on science and technology innovation (STAR Market).
NIO debuted on Wall Street on Sept 12, 2018, becoming the first Chinese electric automaker to launch a U.S. IPO. The automaker raised $1 billion in its debut, well short of its target of $2-3 billion.
Last month, rumors surfaced that NIO was going to merge its autonomous driving unit with DiDi Chuxing's self-driving business, although Didi and NIO denied the reports.
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