Nio lays off employees, sells racing team amid cash crunch

(Image
credit: Nio)

Chinese electric car maker Nio is allegedly
Cutting around 40 percent of employees on its payroll focused on the
study and development and advertising teams, although it’s going to also
sell its Formula E staff as it deal with a liquidity crisis.

Why it matters: Nio has taken a string of
Measures to maintain itself afloat and procured RMB 10 billion ($1.5
billion) in funding
from a state-owned investor, after it reported
a sequential revenue decline and falling deliveries in the first
quarter.

The troubled EV startup was hit hard by several battery
fires related to its very initial commercial model, the ES8 SUV. It
issued
that a massive remember to swap out battery packs on over 4,800 affected
automobiles in late June.
Nio has
endured net loss of over RMB 20 billion since it began up in
2016, while
deliveries over halved in two consecutive quarters to hit
3,553 units at the end of June.
The company
expects a further 20-30% quarter-on-quarter drop in earnings for
its second quarter.

Details: The project cuts allegedly
Affect several branches including nationally R&D and
marketing, in addition to overseas units.

Some departments have seen 30% cuts in staffs and the
entire number of employees has fallen 14% to 8,400 roughly.
The company
downsized its abroad footprint in April, cutting 70 employees
from both Silicon Valley offices and one of the two offices in
San Francisco was shut.
Nio President Qin Lihong reacted by stating mass layoff
reports were untrue, though the provider is still beneath a round of
restructuring to “improve business efficiency. ”
It recently sold its Formula E team Nio, formerly known as
NextEV, to Shanghai-based racing company Lisheng to regain funds.
Nio made its title from winning the FIA Formula E championship at its
debut season in 2015.

Context: The Chinese electric car market is
Facing the start of a new age of rivalry since Tesla’s Shanghai
Gigafatory is nearly complete.

The US EV giant
Said last week it is on course to start Model 3 production
In Shanghai at the end of this season. Made-in-China Tesla modesl
Could be at least 50% less expensive than those produced in the US.

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