Chinese Tesla rival Nio cuts 10% of workforce

Chinese electric car maker NIO plans to lay off 10% of its workforce due to “fierce competition,” Chief Executive Li Bin said on Friday.

The layoffs will be completed in November.

“The next two years will witness the fiercest competition in the transformation process of the automobile industry in an environment full of uncertainty,” Li told employees in a letter seen by CNBC.

He added that Nio has been analyzing its two-year operating plan for the past two months, and in the past two weeks, the company “identified business priorities and developed detailed plans for organizational and business optimization.”

Li said the company is focusing on technology investments, cutting projects that do not contribute to financial performance within three years and ensuring Nio’s core products are released on time.

“I’m sorry to my colleagues who may be affected by the adjustment. In fierce competition, this is a difficult but necessary decision.”

Like many Chinese electric vehicle startups, NIO has been hit by weak consumer confidence in the world’s second-largest economy, fierce competition and a price war sparked by Elon Musk’s Tesla.

Musk’s automaker began lowering vehicle prices in China last year to spur demand, forcing rivals to follow suit. NIO initially resisted any price cuts, but eventually implemented them in June.

Xpeng Motors, another Chinese electric vehicle startup, has restructured its operations, including laying off employees.

Although still in a state of loss, Nioh It has successfully achieved rapid growth in vehicle delivery volume.it says 16,074 vehicles delivered in Octobera slight increase from last month and a 60% increase from the same period last year.

Lee concluded his letter to employees with a rallying cry. “Our journey is a marathon on a muddy track. Please focus on efficient execution and system capability improvement, and work hard.”