Nio’s ET5 stands on display at the Central China International Auto Show on May 25, 2023, in Wuhan, China.
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Chinese electric carmaker Nio plans to cut 10% of its workforce amid “fierce competition,” CEO William Li said Friday.
The job cuts will be completed by November.
“The coming two years will witness the most intense competition during the transformation of the automotive industry in an environment full of uncertainty,” Li told employees in a letter seen by CNBC.
He added that Nio has been analyzing its two-year operating plan over the past two months, and that over the last two weeks, the company “identified the business priorities and developed a detailed plan for organizational and business optimization.”
The company is focusing on investing in tech, cutting projects that don’t contribute to the financial performance in three years and ensuring the Nio’s core products are released on time, Li said.
“I’m sorry to colleagues who may be impacted by the adjustments. This is a tough but necessary decision against the fierce competition.”
Like many Chinese electric vehicle startups, Nio has been hit by weak consumer sentiment in the world’s second-largest economy, stiff competition and a price war kicked off by Elon Musk’s Tesla.
Musk’s automaker began cutting the prices of its cars in China last year to stoke demand, forcing rivals to do the same. Nio first resisted any price declines, but ultimately carried one out in June.
Xpeng, another Chinese EV startup, has restructured its operations, including cutting jobs.
While still loss-making, Nio has managed to rapidly grow its vehicle deliveries. It said it delivered 16,074 cars in October, up slightly on the prior month and 60% higher than the same period last year.
Li penned a rallying cry at the end of his letter to employees. “Our journey is a marathon on a muddy track. Please stay focused on efficient execution and improvement of system capabilities. Power up.”