Electric vehicle maker Nio sought to assuage investor concerns after reporting disappointing second-quarter (Q2) results and canceling an earnings call with investors and analysts.
Why it matters: The company rescheduled the call a day after canceling it. Executives took a cautious tone and focused on Nioโs cost-cutting measures and plans to increase its footprint in the worldโs largest EV market during the postponed call on Wednesday.
- Nio has lost a massive RMB 40 billion ($5.6 billion) since 2016, according to figures from the company.
โWe are implementing comprehensive cost control measures across the organization. These measures primarily focus on increasing efficiencies and streamlining operations within our sales and service network and our research and development (R&D) functions, as well as reducing our headcount.โ
โLouis Hsieh, Nio chief financial officer, during the companyโs earnings call on Wednesday
Details: Nio plans open sales offices dubbed Nio Spaces. These showrooms will be smaller and โless capital intensiveโ than the companyโs flagship Nio Housesโessentially showrooms coupled with high-end clubhouses for Nio owners.
- The company plans to open 200 Nio Spaces in 100 Chinese cities by the end of the year as it seeks to strengthen its foothold across the country and increase its visibility.
- Nio will also seek strategic partnerships in technology development, as a means to โprudently manage spendingโ on R&D.
- The company plans to reduce its headcount to around 7,700 by the end of the third quarter, down from almost 10,000 in January. โWe expect further headcount reductions by the end of this year through both restructuring and spinning off some business units,โ Hsieh said.
Context: Nioโs shares have fallen around 25% this week, wiping $650 million from the companyโs market capitalization.
- Nio has seen a continued slowdown in deliveries since the fourth quarter of 2018, attributing the decline to weakness in Chinaโs auto market, government subsidy cuts for buyers, and macroeconomic uncertainty.
