NIO Co-founder and Former VP Resigns from the Company
The co-founder and former vice president of Chinese electric automaker NIO has resigned from the company, the Financial Times has reported. NIO is one of China's top electric car startups and once considered to be a formidable challenger to Tesla in China.
Jack Cheng left the company on Wednesday, according to an internal memo. Mr Cheng is a Taiwanese former Ford executive who often served as the company's international face.
In an internal memo to NIO employees that was viewed by the Financial Times, the company wrote that Mr Cheng had retired from the company "due to his age".
Nio said Mr Cheng had been responsible for vehicle development, supply chain management, and manufacturing. "We thank him for his long-term hard work and dedication," it added.
Mr Cheng's exit follows a series of high-level departures from Nio. Li Zhang, the company's former head of software, and Angelika Sodian, who headed Nio's operations in Britain left the company in June. US chief executive Padmasree Warrior left at the end of last year.
Nio is among a new crop of electric vehicle start-ups that raised billions as China became the world's largest market for electric and hybrid vehicles. However, growth of the EV market in China has slowed this year as the government cut subsidies for purchases, which hit NIO especially hard.
NIO's share price declined 54% this year and its vehicle deliveries halved in the most recent quarter to 3,984 from the previous quarter. The company was forced to cut its staff and sell assets this year due to mounting losses, which amounted to $390 million in the most recent quarter.
The financial pressures led to NIO cutting about 10% of its workforce. Nio said in a May filing that it had laid off 70 employees across two Silicon Valley offices, one of which had closed.
Nio also said this month it had sold its racing team, which helped establish the company's reputation by winning the FIA Formula E championship in its inaugural 2015 season.
NIO has been compared to Tesla because of its focus on selling premium electric cars. The company raised $3.9 billion in venture-capital funding in addition to proceeds from its IPO. The electric automaker raised $1 billion in a New York IPO in Sept 2018, becoming the first Chinese electric automaker to debut on Wall Street.
In June, NIO was forced to recall nearly 5,000 of its flagship ES8 SUV due to a problem with the vehicle's battery pack, which caused at least one vehicle to catch fire. The NIO inspectors, along with the supplier of the battery pack, concluded there was a vulnerability in the design of the battery pack that could cause a short circuit.
After the fire, China ordered companies manufacturing electric cars to check for potential safety hazards that could lead to fire or inhibit someone's ability extinguish a fire. China is requiring automakers to inspect their battery packs, high-voltage wiring harnesses, waterproof protection, and on-board charging devices.
Also in June, NIO announced it started deliveries of its second mass-market electric crossover to customers in China. The ES6 is a smaller version of the automaker's flagship ES8 full-size electric SUV. The automaker said it delivered the first ES6 Premier Edition models to customers in Beijing, Shanghai and Guangzhou.
Analysts and investors say some aspects of Nio's business strategy have created problems in addition to the general slowdown in EV sales growth and greater competition from established automakers who are moving into EVs.
NIO built modern social gathering spots for owners along with "NIO Power" stations to swap batteries for drivers when they run out of charge instead of having to wait and recharge a vehicle's battery.
The company earlier this year sold equity to raise $1.5 billion from the Beijing city government.
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