Deeper reduction of the workforce is expected at NIO as sales are lower than anticipated.
According to a Bloomberg article, black clouds are gathering over the Chinese EV start-up NIO, which in 4 years (since 2014) accumulated $5 billion in losses.
With the expected (soon to be announced) Q2 losses of 2.6 billion yuan ($369 million), the total loss up to date is estimated at $5.7 billion.
For comparison, Tesla clocked $5 billion in losses in about 15 years since inception in 2003, but is now producing and selling cars at much greater scale.
NIO is struggling with sales weaker than expected, a costly recall and scaled back BEV incentives in China, combined with a general weakening of the automotive market. All those things lowered the price of NIO stock from around $10 seven months ago to around $3 today.
The outcome of the situation reportedly will be a further reduction of the workforce by 14% to 7,500 by the end of September. To survive, NIO might be forced to raise more funds.