Huang Chendong, senior vice president of NIO in charge of the electric power engineering team, leaves for a term until June 30, even as NIO Power Engineering Dept. faces reorganization with over 200 employees diverted into different business lines.
One of the company’s senior executives, Huang Chengdong joined NIO in March 2015 coming in from the new energy business department of SAIC where he served as deputy general manager. At NIO, he was in charge of the core businesses: vehicle development, independent intelligent driving technology research and development; and electric power engineering. He was promoted to senior vice president last October.
A recent announcement stated that the various lines of the electric engineering department will be reorganized and integrated, a move that was rumored to have prompted Huang Chendong’s exit. The reorganization calls for battery system business to directly report to Li Bin; the transfer of motor R & D to XPT (Weiran Power Company), NIO’s Power Parts Company; and the integration of vehicle control and chassis control teams in vehicle development.
NIO thanked Huang Chengdong for his contributions to the company but said “We have made adjustments… the business is proceeding normally and will not be affected in any way.” Reports from inside the company said that there were no layoffs as of the present among the over 250 employees comprising the different business lines.
NIO has historically made rounds of reorganizations with most focused on user operations and product departments. This marks the first time that EIC and the entire vehicle business were involved. Insiders said that the adjustment was aimed at reducing research and development costs. Transferring the R & D to XPT will reduce financial pressure on the company as well as help the independent company is open to orders from outside NIO. Under the previous structure, NIO owns the intellectual property rights to motor technology while XPT was responsible for manufacture. In line with development trends, the independent company is bound to develop its own comprehensive R & D and engineering capabilities.
Insiders expressed that NIO should follow the model of SAIC’s Huayu Automotive, an independent auto parts company owned by SAIC, manufacturing complete motors, gearboxes, motor controllers, among other R & D capabilities, providing product solutions to the entire industry.
NIO has been implementing cost reduction and efficiency measures including layoffs and sale of non-core businesses since last year. The company has also announced the introduction of external investors for NIO Power, its energy business arm now also actively expanding its external business. Likewise, an insider reported that XPT is also actively getting in touch with external investors. High valuation reaching RMB 6-7 billion in 2018 prompted external financing measures.
Heavy investments in R & D and services have led to NIO funding problems in 2019 and consequent radical cost reduction measures. Li Bin publicly expressed that the company will continue to adjust the business to reduce costs and improve operational efficiency. These moves have prompted the exit of company executives, the most recent one being the imminent departure of Wei Jiang, vice president of user development, who announced his resignation this coming May.