NIO recently announced that it would cut about 10% of its workforce, the second time this year that CEO Li Bin has reversed his promise. The company is already under tremendous pressure, especially with the NEV market being highly competitive.
NIO is one of the few high-end new energy vehicle companies in China and has achieved some success in the market. However, price wars and earnings pressures have led to the company getting bogged down. According to the interim report, NIO's cash and cash equivalents remained at 13.72 billion yuan in the first half of the year, compared with 24.51 billion yuan in the same period last year. In addition, NIO's loss in the first half of this year exceeded 6 billion.
In terms of stock price, NIO's market value has fallen by 86%, evaporating more than $100 billion. NIO is also facing competition from other NEV companies, especially in terms of delivery and profitability.
NIO has chosen a more niche battery swap model and has established a large number of battery swap stations. This model differentiates NIO from other car companies, but it also increases the cost burden. The cost of a single battery swap station is about 3 million yuan, and NIO has built 1,700 battery swap stations, which cost 5.1 billion yuan. In addition, NIO has invested heavily in marketing and R&D.
However, NIO is under pressure to turn positive profits, which is also a problem faced by other new energy car companies such as Xpeng Motors. At the beginning of this year, NIO fell into a sales crisis and had to take price reduction promotion measures. Although sales are gradually recovering, there are still risks in a highly competitive market.
NIO's high-end positioning gives it a certain amount of gold in the market, but it is not easy to maintain this position. CEO Li Bin said that the next two years will be the most competitive stage of change in the automotive industry, and in order to gain an advantage in the competition, it is necessary to improve execution efficiency and invest sufficient resources.
In short, NIO is facing layoffs, losses, and declining market capitalization. In the highly competitive new energy vehicle market, NIO needs to solve the problem of profitability and strengthen its competitiveness to survive and grow.