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| Credit: Nio |
Chinese electric vehicle (EV) maker Nio has unveiled plans to streamline its workforce by 10% this month as part of a strategic move to bolster efficiency and address cost concerns in the face of escalating competition, according to an official statement released on Friday.
The decision comes as demand for pure electric vehicles in China has seen a decline, with consumers increasingly favoring more economically attractive plug-in hybrid models. Sales of plug-in hybrids surged by a significant 84.5% during the first nine months of this year, benefitting car manufacturers such as Li Auto and BYD, who have managed to gain a larger market share.
Nio has informed its employees that the reduction exercise will be completed by the end of November. In an internal email to staff, the company stated, “We still have a gap between our overall performance and expectations,” emphasizing the need to enhance efficiency and allocate resources more effectively. The company acknowledged the difficulty of the decision but stressed its necessity in the face of intense competition.
A price war initiated by U.S. auto giant Tesla at the beginning of the year has had a detrimental impact on the profitability of pure EV manufacturers. In response, these companies have intensified efforts to curtail costs and establish strategic partnerships to thrive in a consolidating competitive landscape.
Nio, which rebounded from a sales slump in the first half of the year, achieved impressive results by delivering 109,993 EVs in the first nine months, representing a notable 33.4% increase over the same period last year. This growth outpaced the sector’s overall performance in China, which saw an 18.1% expansion in the EV market.
In addition to the workforce reductions, Nio has announced its intention to defer or reduce long-term project investments that do not promise a positive financial impact within three years. The company is also contemplating the development of a dealer network in Europe as a means to accelerate sales growth and alleviate financial pressures on the company.
Nio currently sells its electric vehicles in both China and Europe through its self-owned stores, and this potential expansion could open new avenues for the company in the global EV market.
Source: EVMagz