Written by Cláudio Afonso | LinkedIn | X
Electric vehicle (EV) maker Nio has been restructuring its operations as competition in China, its main market, continues increasing. Over the next few months, the company will launch several refreshed versions under the Nio brand while adding new models to the lineup of the three brands Nio, Onvo, and Firefly.
In the third quarter of 2024, Nio reported an operating loss of 5.24 billion yuan ($746.4 million), an increase of 8.1% from the same period of 2023 and 0.5% higher than the previous quarter.
The company said earlier this week that it will release its fourth-quarter 2024 financial results on March 21. Shareholders and Wall Street analysts are looking for updates on its path to profitability, progress toward its annual sales target of over 440,000 vehicles, cost cutting measures, and globalization plan.
The Shanghai-based company aims to achieve single-quarter profitability in the fourth quarter, founder and CEO William Li told employees in an internal meeting, local media outlet 21jingji reported last December.
Earlier this week, Nio confirmed a report that revealed the introduction of a new operational framework called the Cell Business Unit (CBU) mechanism, shifting from a budget-driven model to a performance-oriented structure.
Under this system, departments must calculate return on investment (ROI) metrics, manage individual budgets, and be accountable for financial performance.
As reported earlier this month, EV learned that Nio has integrated the delivery channels of its main brand and sub-brand Onvo as part of its restructure aimed to reduce operational costs.
China Cuts
In recent weeks, Nio has carried out job reductions affecting employees across its regional companies in China.
According to a new report from the local media outlet Leiphone, the latest round of reductions affected the UR Fellow after-sales customer service division, Nio House (the brand’s showrooms) operations, after-sales stores, and sales teams.
The scale of the reductions varied by department, with affected employees offered compensation packages and reassignment options. Sources familiar with the matter indicated that approximately 10% of staff were affected, though the percentage differed across regions, according to the report.
In Shanghai, the UR Fellow team saw a 10% reduction, while in Shenzhen, the same division experienced a 50% cut, the report said.
EU and US Offices
Nio has also reduced headcount across multiple departments in Europe and in the United States, multiple sources told EV.
The reduction of positions impacted teams at both the country and regional levels in Europe, with the number of affected employees varying by team and project. While some positions were cut, other employees — who joined one of the Nio offices in Europe last year — saw their contract terminated after the 6-month probation period ended.
In February, Nio brand sold 73 vehicles across its five European markets, data from local automotive associations and the data platform EU-EVs shows.
The EV maker registered 32 in Norway (-53% year on year), 25 vehicles in Germany (-7%), 12 in the Netherlands (-40%), 4 in Sweden (-75%) and none in Denmark.
In the U.S., where Nio has operated an innovation center since 2016, the company has also downsized teams over the past few months.
Chinese media outlet LatePost reported last December that personnel cuts affected several key positions across Nio’s smart driving delivery team and end-to-end technology team.
The company initially leased an 8,000-square-meter office building in San Jose. In January 2022, Nio expanded by leasing a nearby building for then years, more than doubling its office space to 18,500 square meters.
Sales Performance
Nio delivered 9,143 electric vehicles under its main brand last month. While figures of the main brand increased 12.4% from the 8,132 units registered a year ago, its sub-brand Onvo saw its deliveries fallling 31.5% to 4,049 units.
Nio Group deliveries increased 62% year over year to 13,192 vehicles.
To fulfill its target and double last year’s sales, Nio needs to deliver nearly 413,000 vehicles over the next ten months — an average of 41,300 units. In December, the company reached a new monthly record with over 31,000 EVs delivered.
As of the time of writing, Nio shares are trading 1.7% lower at $5.13 following a 17% surge on Tuesday. Other Chinese carmakers, such as XPeng and Zeekr, have also posted double digit gains on Tuesday jumping 15% and 18%, respectively.
