NIO to trim workforce by 10% amid ‘fierce competition’ in the EV market
Chinese EV startup NIO revealed it will trim staff positions by 10% this month to improve profitability. NIO’s CEO, William Li, announced the news in an internal memo Friday, citing “fierce competition” in the EV market.
According to the memo, reviewed by Bloomberg, NIO will trim its staff by 10% in November. Li said “duplicate” and other “inefficient” roles will be cut.
In addition, any projects that aren’t expected to generate earnings within the next three years will be put off or cut altogether.
The news comes as the EV price war in China intensifies. Market leaders in China, including BYD and Tesla, have slashed prices all year, pressuring others to do the same.
NIO cut prices by $4,200 (30,000 yuan) in June to keep pace in the world’s largest EV market.
The move came after NIO faced falling vehicle deliveries, margins, and profits as losses swelled in the second quarter. NIO’s losses widened to $835 million in Q2, up 119% compared to last year. Gross margins also fell to 1% compared to 13% in 2022.
NIO continues rolling out new products (like a smartphone) while expanding into new markets, which is driving up costs. With the launch of the new ES6 and EC6 this year, all NIO models have now transitioned to its next-gen 2.0 platform.
NIO to trim staff amid intensifying EV competition
“This is a tough but necessary decision against fierce competition,” Li explained in the memo Friday. He said, “Our journey is a marathon on a muddy track.”
Li apologized to the staff affected, saying to “qualify for the next round of competition,” the company needs to become more efficient.
NIO has delivered 126,067 vehicles YTD (+36% YOY), accounting for roughly 2.1% of China’s new energy vehicle market (including hybrids).
Meanwhile, BYD sold over 165,000 EVs this past month alone. The market leader posted record profits of $1.42 billion in the third quarter despite the ongoing price war in China.
After announcing a $1 billion convertible debt offering in September, NIO said it would use the funds to “further strengthen its balance sheet as well as for general purposes.” At the end of June, NIO had around $1.9 billion in cash and equivalents.
NIO stock has been stuck in a downtrend since peaking in January 2021. NIO shares are up 5% following the news Friday but are still down 20% over the past 12 months.
Electrek’s Take
The pressure in the world’s largest EV market is building as market leaders BYD and Tesla squeeze rivals out of the segment.
China has already claimed several victims as lower-priced EVs make it tough for other automakers to keep pace. BYD started as a battery company, giving it a significant advantage as it expands the brand globally.
Smaller automakers, including NIO, are adapting to the changing market conditions. The next few months will be critical as EV makers look to establish their place in the market.
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GreenPower Motor Company says it’s received three orders for 11 of its BEAST electric Type D school buses for western state school districts in Arizona, California, and Oregon.
GreenPower hasn’t made the sort of headline-grabbing promises or big-money commitments that companies like Nikola and Lion Electric have, but while those companies are floundering GPM seems to be plugging away, taking orders where it can and actually delivering buses to schools. Late last year, the company scored 11 more orders for its flagship BEAST electric school bus.
As far as these latest orders go, the breakdown is:
- seven to Los Banos Unified School District in Los Banos, California
- two for the Hood River County School District in Hood River, Oregon
- two for the Casa Grande Elementary School District in Casa Grande, Arizona
Those two BEAST electric school buses for Arizona will join another 90-passenger BEAST that was delivered to Phoenix Elementary School District #1, which operates 15 schools in the center of Phoenix, late last year.
“As school districts continue to make the change from NOx emitting diesel school buses to a cleaner, healthier means of transporting students, school district transportation departments are pursuing the gold standard of the industry – the GreenPower all-electric, purpose-built (BEAST) school buses,” said Paul Start, GreenPower’s Vice President of Sales, School Bus Group. “(The) GreenPower school bus order pipeline and production schedule are both at record levels with sales projections for (2025) set to eclipse the 2024 calendar year.”
GreenPower moved into an 80,000-square-foot production facility in South Charleston, West Virigina in August 2022, and delivered its first buses to that state the following year.
Electrek’s Take
Since the first horseless carriage companies started operating 100 years ago (give or take), at least 1,900 different companies have been formed in the US, producing over 3,000 brands of American automobiles. By the mid 1980s, that had distilled down to “the big 3.”
All of which is to say: don’t let the recent round of bankruptcies fool you – startups in the car and truck industry is business as usual, but some of these companies will stick around. If you’re wondering which ones, look to the ones that are making units, not promises.
SOURCE | IMAGES: GreenPower Motors.
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While some recent high-profile bankruptcies have cast doubt on the EV startup space recently, medium-duty electric truck maker Harbinger got a shot of credibility this week with a massive $100 million Series B funding round co-led by Capricorn’s Technology Impact Fund.
It’s been a rough couple of weeks for fledgling EV brands like Lion Electric and Canoo, but box van builder Harbinger is bucking the trend, fueling its latest funding round with an order book of 4,690 vehicles that’s valued at nearly $500 million. Some of the company’s more notable customers including Bimbo Bakeries (which owns brands like Sara Lee, Thomas’, and Entenmann’s) and THOR Industries (Airstream, Jayco, Thor), which is also one of the investors in the Series B.
Other prominent investors include Tiger Global, the Coca-Cola System Sustainability Fund, and ArcTern Ventures.
As for what makes Harbinger such an attractive investment prospect, Dipender Saluja, Managing Partner of Capricorn Investment Group’s Technology Impact Fund explains that, “Harbinger has demonstrated a remarkable ability to reach significant milestones far quicker than other EV companies … the market has been impressed by their ability to develop large portions of the vehicle in-house to drive down unit costs, while remaining capital efficient.”
The company plans to use the funds to ramp up to higher-volume production capacity and deliver on existing orders, as well as build-out of the company’s sales, customer support, and service operations.
“Harbinger is entering a rapid growth phase where we are focused on scaling production of our customer-ready platform,” said John Harris, co-founder and CEO. “These funds catalyze significant revenue generation. We’ve developed a vehicle for a segment that is ripe for electrification, and there is a strong product/market fit that will help fuel our upward trajectory through 2025 and beyond.”
The company has raised $200 million since its inception in 2021.
SOURCE | IMAGES: Harbinger.
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There is no state more associated with cars and car culture than Michigan – and the state that’s home to the Motor City has just taken a huge step into the future with the deployment of its first-ever all electric police vehicle.
The 2024 Ford Mustang Mach-E patrol vehicle is assigned to the Michigan State Police State Security Operations Section, and will be to be used by armed, uniformed members of the MSP specializing in general law enforcement and security services at state-owned facilities in the Lansing, MI area.
“This is an exciting opportunity for us to research, in real time, how a battery electric vehicle performs on patrol,” says Col. James F. Grady II, director of the MSP. “Our state properties security officers patrol a substantially smaller number of miles per day than our troopers and motor carrier officers, within city limits and at lower speeds, coupled with the availability of charging infrastructure in downtown Lansing, making this the ideal environment to test the capabilities of a police-package battery electric vehicle.”
The MSP’s Precision Driving Unit is nationally renowned for its annual Police Vehicle Evaluation, which our own Scooter Doll participated in last year, driving the then-new Chevy Blazer EV Police Pursuit Vehicles in a game of “cops and robbers.”
In those tests, the EVs have impressed – but the MSP has been hesitant to commit to a BEV until now. “We began testing battery electric vehicles in 2022, but up until now hybrids were the only alternative fuel vehicle in our fleet,” said Lt. Nicholas Darlington, commander of the Precision Driving Unit. “Adding this battery electric vehicle to our patrol fleet will allow us to study the vehicle’s performance long-term to determine if there is a potential for cost savings and broader applicability within our fleet.”
Michigan joins other states like Wisconsin and California in deploying electric patrol cars and saving big money on fuel and maintenance, with many more out there and many more to come.
SOURCE | IMAGES: Michigan State Police.
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