Electric vehicle (EV) maker Nio reportedly plans to raise cash by spinning off its autonomous driving business while cutting an additional 100 jobs at its Silicon Valley office.
Why it matters: The recent developments renew concerns about the fate of the Chinese young EV maker, as Nio takes more drastic measures to keep the company afloat until new investment comes in.
- Nio founder and CEO William Li on August 16 responded to the rumors about layoffs for the first time, saying the Chinese auto market has cooled and the company will enhance the efficiency of its business operations to develop next-generation products.
Details: Nio is reportedly looking to split off its autonomous driving business and combine it with Didi’s self-driving unit, which itself was recently made into a separate business. The two companies have held several rounds of negotiations, according to Chinese media reports.
- Both Nio and Didi denied the claims when reached by TechNode on Tuesday.
- Nio is also rumored to have scaled back its overseas business by cutting another 100 jobs at the company’s US offices, while also planning to list on Shanghai’s newly launched high-tech board.
- The Chinese EV maker on Monday denied the claims that it plans to list in mainland China and close its US headquarters, adding it continues to focus on “optimizing management efficiency.”
- Nio this year laid off 70 employees at its two Silicon Valley offices, one of which was closed in May.
- The company’s US headquarters is one of its R&D bases for driverless technologies and employed more than 600 employees at its peak.
Context: Consolidation in China’s autonomous driving sector is expected as the hype surrounding the industry begins to wear off.
- Chinese search giant Baidu is also reportedly looking for external investors to spin off its costly driverless vehicle project. In May, the search giant reported its first quarterly loss since listing in 2005. The latest rumors suggest that the company will announce the spin-off next month.