Nio, the Chinese electric vehicle manufacturer listed on the NYSE, is currently undergoing a significant organizational restructuring aimed at enhancing cost control. This restructuring is centered around the implementation of a management mechanism called the Cell Business Unit (CBU).
In a recent internal speech delivered by William Li, the founder, chairman, and CEO of Nio, he emphasized the importance of efficiency and achieving business goals. Li urged employees to abandon past practices that were deemed unjustifiable and instead focus on delivering results.
Nio currently operates with 12 CBUs, with significant expenditures in areas such as research and development, marketing, and staffing costs. Li highlighted the need to evaluate the effectiveness of these investments and make strategic decisions on where to allocate resources more effectively.
Acknowledging that Nio had missed its operating targets for the 2022-2024 cycle, Li emphasized the importance of making efficient investments while cutting down on inefficient ones. He stressed the need for improved efficiencies and stronger management within the CBUs.
Furthermore, Li highlighted the necessity of adapting to changing market environments and discontinuing projects that are no longer viable. He also mentioned the importance of financial viability in decision-making processes, stating that even his own proposals would be scrutinized for their return on investment.
In line with the company’s goal of achieving profitability in the fourth quarter, Li emphasized the need for rational cost control, resource allocation, and priority setting. Nio has implemented measures such as tracking work hours in the R&D team to optimize staffing costs, which account for a significant portion of R&D investments.
Li also addressed the importance of continuous improvement in management practices and expressed openness to constructive feedback. He stressed the need for Nio to regain its dignity in management and operational efficiency.
Overall, Nio’s organizational restructuring under the CBU mechanism reflects a strategic shift towards greater efficiency, cost control, and goal-oriented decision-making. With a focus on delivering profitability and optimizing resource allocation, Nio is poised to navigate the competitive landscape of the electric vehicle industry.
