NIO’s Co-Founder Abruptly Leaves Struggling Chinese EV Startup

One of the co-founders of Chinese electric vehicle startup NIO has departed amid what is proving to be a rather difficult year for the startup.

Jack Cheng spent nearly 30 years running Ford’s Chinese operation before leaving to found NIO alongside William Li and Lihong Qin. An internal memo seen by The Financial Times says Cheng retired “due to his age.”

Things looked to be going very well for NIO last year. Not only was it listed on the New York Stock Exchange in a move that generated about $1 billion, it also ramped up production and deliveries of its first mass-production model, the ES8 SUV. By the end of 2018, it had managed to deliver a total of 10,000 vehicles.

Also Read: Li Xiang One vs. NIO ES8 – Modern Electrified Chinese SUVs Face Off

However, The Verge reports that the slowdown in the Chinese economy, and in particular its automotive sector, as well as the expiration of certain Chinese government subsidies, has seen the company struggle through 2019. NIO deliveries are slipping and, in July, it only shifted 164 examples of the ES8. It’s hardly a surprise then that NIO shares have plummeted from a high of $10.06 on the 1st of March, 2019 to just $3.00 at the time of writing.

NIO has been prompted to respond with cost-cutting measures that include abandoning its plans to build a large factory outside of Shanghai, instead opting to continue having its vehicles built by a state-owned contract manufacturer. Additionally, they closed an office in Silicon Valley in May and recently began laying off at least 3 per cent of its workforce in China.

“We would like to thank Jack for his support contributions to NIO. After his honorable retirement, Jack will continue to be William’s personal advisor, and will support the company in supply chain and partnership,” NIO communications director JoAnn Yamani said.

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  • Paulbe

    Too many companies in a rapidly saturating market. A big shakeout must come.

    • Ogden Lafaye

      The market is not being saturated…it is in a state of insatiable thirst. The industry is being shook out by the government. Once the dust settles the Chinese government will support those left standing. China is racing towards an ICE free country.

      Coal power plants are next except for those small plants being built in intractable areas.

  • JqC

    You’re right, @disqus_B4eDvxrzgT:disqus, and all this BEFORE Tesla opens its factory and starts selling its vehicles in China either at the same price with much higher margin, or at lower prices with the same. I like the product from Nio, but I am not sure that they have the staying power in the coming conflagration. As a matter of fact, I’m sure they don’t. Let’s see how the shares open today.

    • HD

      Shares won’t be affected. This news is more than a week old..

  • Mr. EP9

    That is not a good sign. I do hope this isn’t a sign of impending bankruptcy but I won’t be surprised if it happens.

  • driv3r

    Well I was quite hopeful about this EV-start-up since they seem to have gotten many things right with the ES8. Even critical German car journalists where impressed recently by the overall quality the car delivers.

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