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.
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.