China’s Tesla challenger Nio to cut more jobs, raise cash as losses mount
- The moves show how China’s NEV makers are bracing for a downturn after the government scaled back its subsidy programme
Electric vehicle maker Nio, considered China’s Tesla challenger, is seeking further job reductions and new funding, as it battles with mounting losses.
The Shanghai-based company announced those initiatives at its earnings call on Wednesday after reporting a larger-than-expected loss of 3.3 billion yuan (US$478.6 million) in the second quarter.
“We target to reduce our global headcount to be around 7,800 by the end of the third quarter from over 9,900 in January 2019, and aim to further pursue a leaner operation through additional restructuring and spinning off some noncore businesses by year end,” said Nio founder, chairman and chief executive William Li Bin in a statement.
At the earnings call, Li disclosed that Nio has already spent a total of 20 billion yuan over the past four years to build up its business. The company and the broader car market in China now faces challenging macroeconomic conditions, caused by uncertainties from the trade war with the US and softer demand in the world’s largest car market.
New York-listed Nio has made “significant, positive progress” in its latest fundraising efforts, said chief financial officer Louis Hsieh Tung-jung at the same call, without providing details.