SHANGHAI -- China's Nio plans to trim its workforce by 10 percent this month as it moves to improve efficiency and reduce costs in the face of growing competition, the electric vehicle maker said.
Demand for EVs has weakened in China as consumers favor more economical plug-in hybrids, sales of which rose 85 percent in the first nine months of the year, helping carmakers such as Li Auto and BYD gain market share.
Nio has told staff the reductions would be completed in November, it said in a statement to Reuters.
"We still have a gap between our overall performance and expectations," it told staff in an email, adding that it needed to improve efficiency and ensure adequate resources.
"This is a tough but necessary decision against the fierce competition."
A price war started by U.S. auto maker Tesla at the beginning of the year is dragging down profitability of pure EV makers, which have stepped up efforts to prune costs and build partnerships to survive the consolidating competition.
Nio, which rebounded from a sales slump in the first half, delivered 109,993 EVs in the first nine months this year, up 33 percent on the year-earlier period to outpace growth of 18 percent in China's EV sector overall.
Apart from the layoffs, Nio said it would defer or cut long-term project investments that would not contribute to financial performance within three years.
Nio, which sells cars in China and Europe through its self-owned stores, is also considering building a dealer network in Europe to speed sales growth, Reuters reported last month, to ease cash pressure on the loss-making company.