Amid continued losses and lower-than-expected sales numbers, Chinese EV maker NIO (NYSE:NIO) may be planning additional job cuts, according to Bloomberg.
This move, aimed at lowering costs and boosting efficiency, comes shortly after NIO announced a 10% headcount trim. The latest round of layoffs could impact non-core operations or projects that are still some time away from churning out profits. Reportedly, some departments at the company have been asked to come up with reserve layoff lists.
NIO employed over 27,000 people at the end of last year. Amid broader industry woes, some of its global expansion plans are also taking a hit. Earlier this week, NIO reported a 46.6% year-over-year increase in revenue for the third quarter. Still, its net loss per American Depository Share of $0.31 fell short of expectations by $0.05.
While higher selling prices and cost reduction initiatives helped the company improve its vehicle margin to 11% from 6.2% in the second quarter, the figure still lagged the 16.4% mark reached in the year-ago period. Similarly, NIO’s overall gross margin of 8% remained lower than the year-ago figure of 13.3%. Its net loss for the quarter increased by 10.8% year-over-year to $624.6 million.
Separately, NIO is acquiring certain manufacturing equipment and assets from Anhui Jianghuai Automobile Group Corp. (JAC) for RMB 3.16 billion. In addition, a spin-off of its battery manufacturing unit may be in the cards at the end of this year.
What is the Price Target for NIO?
Shares of the company have tanked nearly 42% over the past year. Overall, the Street has a Moderate Buy consensus rating on NIO. The average NIO price target of $11.36 points to a 46.6% potential upside in the stock.
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