DOMESTIC electric vehicle (EV) maker Nio Inc. plans to trim its workforce by 10% this month as it moves to improve efficiency and reduce costs in the face of growing competition.

Demand for EVs has weakened in China as consumers favor more economical plug-in hybrids, sales of which rose 84.5% in the first nine months of the year, helping carmakers such as Li Auto and BYD Co. to gain market share.

Nio has told staff the reduction exercise would be completed in November, it said in a statement last week.

“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. automaker Tesla Inc. at the beginning of the year is dragging down profitability of pure electric vehicle 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 33.4% year on year to outpace growth of 18.1% in China’s EV sector overall. (SD-Agencies)