Monday Nov 6 2023 14:34
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Shares of Chinese EV maker Nio Inc. posted a close to 9.5% rise last week following reports that the Chinese electric vehicle company is planning to reduce its workforce by 10% this month. The move aims to enhance efficiency and cut costs in response to intensifying competition, according to a Reuters report citing an email sent to Nio staff.
“We still have a gap between our overall performance and expectations,” said the email, adding that it needed to improve efficiency and ensure adequate resources. “This is a tough but necessary decision against the fierce competition.”
As of December 31, 2022, Nio had 26,763 full-time employees, as stated in its annual report filed with the SEC.
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Earlier in the week, Shanghai-based Nio reported a nearly 60% increase in vehicle deliveries for October compared to the previous year. In October, Nio delivered 16,074 electric vehicles, marking a 59.8% rise from the 10,079 vehicles delivered during the same period in 2022. Year-to-date, the company has delivered 126,067 electric vehicles — a 36.3% increase compared to the same period last year.
Nio’s competitors, however, are surging ahead. As noted by Barron’s, BYD BEV sales are up roughly 75% so far this year compared with 2022. Tesla‘s Chinese sales are up about 45%.
Robust delivery numbers in China have alleviated recent investor concerns about a potential slowdown in the global electric vehicle industry. These concerns were not unwarranted, as illustrated by the recent guidance from ON Semiconductor, a key supplier of auto chips, which projected a close to 10% decline in Q4 revenue compared to Q3.
ON Semiconductor's guidance had a negative impact on the Tesla stock price, causing it to drop by nearly 5% last Monday and close below $200 for the first time since late May. Nevertheless, Tesla's stock rebounded significantly during the week, surging by over 11% between Monday and Friday, partly driven by robust delivery performance in China.
At the time of writing on Monday, Nio American Depositary Receipts (ADR) were at around $8.24 in after-hours trading. The Nio stock price remains 15.6% down year-to-date despite the recent surge.
Tesla stock closed at $219.96 on Friday, and is currently up by close to 78.6% year-to-date, as per MarketWatch data.
When considering shares for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.
Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.
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