NIO To Slash Jobs After Nearly Half Billion Dollar Losses In Q2

There was a time when Chinese EV startup Nio looked to be the next big thing , but like so many others new automakers, it has fallen on hard times.

According to Autonews, in Q2 2019 the company posted net losses of 3.3 billion yuan ($463 million), an 83 per cent increase over than the same quarter last year. What’s more, these net losses were far higher than the 2.6 billion yuan average that was expected by some analysts.

Also Read: NIO’s Co-Founder Abruptly Leaves Struggling Chinese EV Startup

Nio went public last year, and at one stage its market value reached $11.9 billion. A series of issues including weak sales, recalls and cost overruns have seen shares plummet by 77 per cent. Revenue dropped by 7.5 per cent from the first quarter and it also delivered 11 per cent fewer vehicles in Q2 than in Q1.

The car manufacturer was founded by William Li in 2014 and is backed by Tencent Holdings. It has accumulated about $6 billion in losses in the years since its formation and announced the recall of almost 5000 vehicles back in June due to fire risks. As of the end of May, Nio had sold only 17,550 vehicles.

As part of a restructuring plan to reverse its fortunes, Nio will slash its workforce from a high of 9900 employees in January to 7800 by the end of the third quarter this year and will spin off some non-core businesses by the end of 2019. Nio expects delivery numbers to rebound in Q3, with between 4200-4400 deliveries tipped to be made, triggering a jump in revenue by as much as 10 per cent.