Nio recently released a “ optimization and rationalization plan “. The Chinese manufacturer plans to lay off 10% of its employees. The battery and smartphone departments are a priori the most affected.
Two departments are more affected than the others
A plan optimization and streamlining at Nio is expected to reach thousands of people in China. In 2023, the company will have nearly 27,000 full-time employees. Most of Nio’s businesses will likely be subject to layoffs, but not to the same extent. The departments related to batteries and smartphones will be those where the adjustments could be the most important.
Test – Nio EL6: the new premium
This is surprising in the sense that the car manufacturer is seeking to make its charging infrastructure a real differentiator. Nio is developing technology that allows owners of the brand’s electric vehicles to swap their car’s battery in minutes. Rather than recharging it. The system is not yet unanimous, but it is developing quite well.
Still trying to differentiate itself, the Chinese company recently presented its own smartphone. The strong point of this product is its high level of interaction with the brand’s cars. The phone can notably be used as an access key to the vehicle and a special button even allows access to around thirty features linked to the car. Nio is surely one of the only car manufacturers in the world to have developed its own phone.
Revenues down at Nio
Despite this, the brand has just announced its decision to separate 10% of its employees, a good number of whom work on the subject of batteries or smartphones. Within the company, this had been discussed for several months already. The teams have apparently been aware of this since September. A meeting was organized on November 1 at the headquarters in Shanghai. Management stated that “ performance does not match efforts ».
The Nio brand has grown at a very steady pace over the past two years. But the losses are too great. To get out of this, the company believes it is time to make savings. The company reported revenue of 8.77 billion yuan (1.1 billion euros) for the second quarter of 2023, down 14.8% year-on-year and 17% from the first quarter.
According to Nio’s boss, the brand’s sales in Europe are underestimated
Between April and June 2023, Nio’s gross margin was 1%, compared to 13% in 2022 over the same period. It’s time to make a decision. Nio is not calling into question its positioning and intends to continue to deploy its initial strategy. For this to work, we now need to increase the number of deliveries while optimizing the cost structure. Certain investments non-priority » will be postponed.
Sales up 60%
The Chinese brand has still achieved sales records in recent months: 20,462 models sold in July or more recently 16,074 in October, almost 60% more than a year ago. In total, the firm sold 126,067 electric vehicles over the first 10 months of the year (+ 36.3% compared to 2022). But this is not enough. The company’s profitability is suffering. Nio loses money on each model sold, in particular because of the price war in China.
According to the company’s management, the gap is still too large between ” performances achieved and expectations “. Regarding the layoffs, the company assures that it “ is a difficult but necessary decision in the face of fierce competition “. Nio’s future lies beyond China’s borders. To try to accelerate sales on the European market, the manufacturer is considering deploying a network of dealers on the Old Continent.
rewrite this content and keep HTML tags