Shanghai-based electric vehicle (EV) giant Nio is set to embark on a significant restructuring initiative, revealing plans to slash its workforce by one-third by 2027 while concurrently increasing automation. The move comes on the heels of the recent 10% reduction in its workforce, part of Nio’s strategy to enhance efficiency and stay competitive in the fiercely contested electric vehicle market.
Ji Huaqiang, Nio’s Vice President of Manufacturing, Logistics, and Operations, outlined the company’s vision, stating, “If 80 percent of our decisions [in manufacturing] can be made by AI, it will enable us to reduce 50 percent of our managerial positions in 2025.” Industrial robots are expected to play a pivotal role in achieving a 30% reduction in human labor on production lines between 2025 and 2027.
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Despite delivering 126,067 vehicles in the first 10 months of 2023, reflecting a robust 36.3% year-on-year growth, Nio has yet to turn a profit since its inception in 2014. Facing escalating competition in the world’s largest EV market, China, from both established players and new entrants like Xiaomi and Baidu, the company is intensifying efforts to optimize operations and cut costs.
The company’s second plant, situated near Hefei Xinqiao airport, already boasts 756 robots contributing to a fully automated manufacturing process. Nio envisions transforming this facility into the world’s smartest, leveraging advanced equipment, flexible processes, and efficient supply-chain management.
With a current workforce of about 7,000 employees, Nio’s decision to streamline operations and embrace automation reflects broader industry trends. The competitive landscape, characterized by approximately 200 players, has prompted major EV manufacturers like Nio to focus on efficiency and cost-cutting measures to navigate the challenges of overcapacity and maintain a leading position in the rapidly evolving EV sector.
