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Nio (NIO) stock has gained as much as 5% on Friday morning after reporting that increased competition in the Chinese electric vehicle (EV) market had forced the Shanghai-based company to lay off 10% of its workforce and trim some of its investments.NIO stock has broken above its 21-day Simple Moving Average (SMA) as the automaker said it was considering spinning off some of its segments to streamline the firm and save money.The US equity market has reacted fondly to a light Nonfarm Payrolls report for October that showed US employment growing at a slower pace that is more in line with the soft landing narrative. The US Federal Reserve is much less likely to raise interest rates with this news.Additionally, US Treasury yields have collapsed, another boon to equity prices. The 2, 5, 10 and 30-year bonds all saw yields retreat more than 2%, and the 5-year bond saw its yield fall more than 3%.
Nio stock news: CEO says company will focus on efficiency
Nio management seems to have come to terms with the fact that it is not the future EV leader in the Chinese market that it was once thought destined to become. Data from the China Passenger Car Association shows in the year through September Nio was ranked 9th among EV and hybrid sales in mainland China, bagging a little over 2% of market share.BYD (BYDDY) and, to a lesser extent, Tesla (TSLA) have been locking up a larger share of the market in 2023 as they engage in a hyper-competitive price war that has been hurting smaller players like Nio. Bloomberg obtained a letter sent to employees on Friday explaining that the layoffs were necessary due to mounting profit losses and the company’s struggle with growth.”This is a tough but necessary decision against the fierce competition. We still have a gap between our overall performance and expectations,” said CEO William Li in a statement to Reuters. The chief executive added that investments that would not make a real difference to the company’s financial performance within three years would also be given the axe.Nio released October delivery data on Wednesday showing that the EV company delivered 16,074 vehicles in the month, which was a 60% increase from a year ago but just a 3% gain from September. At just 126K deliveries so far in 2023, Nio is a long way away from its goal at the beginning of the year to deliver 250K vehicles.In mid-October, Nio said it was considering selling through a dealer network in Europe rather than its direct sales model. Reports emerged that the company was hiring extensively in Hungary, France, Switzerland, Austria and Italy. More By This Author:USD/CAD Price Analysis: Remains On Backfoot Ahead Of US/Canada Employment data
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