[ad_1]
NEW YORK – Chinese electric vehicle manufacturer NIO announced Tuesday that it was going to lay off 1,000 additional employees, after recording heavy losses, compounding the growing uncertainty about the future of the startup.
The new series of restructurings of the company listed in New York will take place by the end of the third quarter. The Shanghai-based start-up had already reduced its workforce from 9,100 in January to about 8,800 in August and closed an office in Silicon Valley.
The company has canceled its call for results scheduled for Tuesday. It announced a worse-than-expected net loss of 3.29 billion yuan ($ 478 million) for the second quarter of 2019, a loss of 83.1 percent deeper over the year and 25.2 percent. % deeper than in the first quarter.
NIO shares plunged more than 25% Tuesday morning on the New York Stock Exchange.
In the midst of the haemorrhage, the automaker announced that it would collect $ 200 million in convertible notes from major shareholder, Tencent Holdings, and NIO's chief executive officer, William Li, although the amount is less than the Company's cash consumption rate.
NIO's revenues increased from 1.63 billion yuan in the previous quarter to 1.51 billion yuan, with total shipments falling 10 percent to 3,553 yuan.
"In response to generally temperate market conditions, we are also working tirelessly to optimize the performance of our resources and have implemented comprehensive measures of efficiency and cost control across the board. organization, "Li said in a statement.
The company recalled 4,803 of its ES8 vehicles in July. But NIO's problems also come from China's phasing out of subsidies that have contributed to the lightning boom of the electric vehicle industry and have supported its growth.
Subsidies for the ES8 model have been reduced from 67,500 yuan in 2018 to 11,500 yuan – about $ 1,600 – consumers are now paying nearly $ 8,000 more for the vehicle than a year ago.
Beyond its internal challenges, NIO is facing increased competition from US electric vehicle manufacturer Tesla, which is expected to begin production of its Shanghai Gigafactory this year to deliver locally manufactured cars to Chinese customers.
NIO is betting on a new capital injection from the state, Beijing E-Town Capital, while the automaker has incorporated a new entity into the city's economic and technological development sector. The company said it would receive up to $ 1.5 billion in E-Town investment, according to a framework agreement announced in May.
[ad_2]
Source link