Nio is losing the head of its electric power engineering division, the company confirmed on Wednesday, as it begins another round of consolidation and headcount trimming in an effort to live up to ambitious profitability goals laid out by its CEO last month.
Why it matters: Nio’s executive departures are speeding up again, signaling the start of another round of restructuring in bid to gain profitability.
Details: Nio’s senior vice president of e-propulsion, Huang Chendong, who oversees research and development in powertrain, battery management systems, and car control, will step down on June 30, Chinese media reported Tuesday citing persons close to the matter.
- Huang’s resignation comes as the company announces an organizational reshuffle for his team, the report said, merging powertain research and development with XPT, a Nio subsidiary that manufactures and supplies powertrains, among other parts, for the EV maker.
- The vehicle dynamics and chassis controls team will integrate with a general car engineering department in the company. The move is expected to combine resources and lower costs, but more importantly, enable XPT to sell components to other automakers, adding another revenue stream.
- Huang is the second key executive in recent weeks to step down. Chinese media last month reported Zhu Jiang, vice president of Nio’s user development, will leave his position in May after more than three years as the head of sales and marketing.
- The Tesla challenger has adopted a user-focused community strategy featuring luxurious clubhouses and a social network crowded with devoted users on its app. Nearly 70% of new orders are currently coming from existing owner referrals, up from 45% as of last year, founder William Li said last month.
- A company representative confirmed the departures to TechNode on Wednesday.
Context: Continuous improvement in operational efficiency has been among the top priorities for the cash-strapped EV maker which recently claimed it has implemented “rigorous measures” in daily operations to fight headwinds from an extended market slump.
- Pressured by the Covid-19 outbreak, Li made ambitious promises during the company’s Q4 earnings call, including 35% reduction in losses in the first three months of this year from a quarter ago and positive gross margin in the second quarter.