Chinese Tesla rival Nio cuts 10% of workforce as CEO predicts ‘intense competition’

Chinese electric car manufacturer Nio is set to reduce its workforce by 10% in response to what CEO William Li described as “fierce competition.” These job cuts are expected to be completed by November. Li conveyed this decision to the company’s employees in a letter, where he highlighted the intense competitive landscape in the automotive industry and the uncertain environment it currently faces.

Nio has been rigorously evaluating its two-year operating plan over the past couple of months, and in the last two weeks, the company has identified its business priorities and developed a comprehensive plan for organizational and business optimization. This strategy includes a focus on investing in technology, discontinuing projects that do not contribute to financial performance within a three-year horizon, and ensuring that Nio’s core products are released on schedule.

William Li expressed his regret for the impact this decision would have on affected colleagues, acknowledging that it is a challenging but necessary step in response to the formidable competition in the market.

Similar to many other Chinese electric vehicle startups, Nio has faced challenges, including a downturn in consumer sentiment within China, intense competition, and a price war initiated by Elon Musk’s Tesla. In response to Tesla’s price reductions in China last year, Nio initially resisted lowering its prices but eventually did so in June.

Another Chinese electric vehicle startup, Xpeng, has also undergone operational restructuring and job cuts in response to market dynamics.

Despite facing losses, Nio has made significant progress in terms of vehicle deliveries. In October, the company reported the delivery of 16,074 cars, marking a slight increase from the previous month and a substantial 60% growth compared to the same period in the previous year.

William Li concluded his letter to Nio’s employees with an inspirational message, likening the company’s journey to a “marathon on a muddy track” and urging them to maintain their focus on efficient execution and the enhancement of system capabilities.