- The adjustments focus on Onvo, which remains a sub-brand but will operate as a first-tier division of Nio.
- Nio is also reducing management compensation costs.
The consolidation of Nio Inc's (NYSE: NIO) three brands continues in an effort to reduce costs, according to a local media report.
The electric vehicle (EV) maker made an internal announcement this afternoon, with sub-brands Onvo and Firefly seeing a number of organizational changes, according to a report in 36kr today.
The Onvo brand is the focus of this round of restructuring, which involves product development, user services, and model marketing, according to the report.
Nio's product design and development cluster (PD&D) will have a new Onvo product design and development tier one department, which reports to Nio founder, chairman, and CEO William Li, 36kr said, citing the internal announcement.
Product experience, program management, design, and vehicle engineering from the former Onvo business unit will be transferred to this new department. Meanwhile, a new Onvo product line division was created.
Nio's user services and experience cluster (UE) has created a new Onvo user services tier one department headed by Shen Fei, who reports to the company's president, Qin Lihong.
This tier one division encompasses the former Onvo departments of planning and operations, regional sales strategy, and regional sales management.
Onvo's marketing campaign planning department and regional sales companies have all been merged into this UE cluster, which continues as a second-tier department with the same reporting relationship.
"This is like merging the sales of the Nio and Onvo brands," 36kr quoted a Nio employee as saying.
The Firefly business unit was moved into the PD&D cluster, but more details were not released, the report noted.
In other words, the original Onvo and Firefly business units were scrapped, 36kr said.
The Onvo brand was launched in May 2024 and its first model, the L60, went on sale last September.
After the L60 saw a weaker-than-expected performance, Onvo's former president Alan Ai resigned last month and Shen took his place.
Onvo previously had a relatively independent vehicle development team that was up to 2,000 people in size, 36kr's report said.
Many insiders say Onvo should have been merged into the Nio system long ago, according to the report.
Now, Onvo is more radically under the Nio brand, from management, product development, marketing, and regional sales, to user relations and brand communications, the report said.
In other words, Onvo, while still a sub-brand, will operate as a first-tier division of Nio, 36kr noted.
In addition, Nio is also reducing the cost of compensation for its management.
Nio previously notified employees at the P4 level and above that more than 20 percent of their monthly salary will be converted into equity incentives, 36kr cited an insider as saying.
Last week, another local media outlet, Sina Tech, reported that sales of Nio and Onvo brands began to be handled by the same person in several cities.
The series of adjustments is aimed at improving Nio Inc's overall operations. The company is aiming for a single-quarter profit in the fourth quarter of this year, Li has said several times this year.
Starting in the second quarter, Nio's financial statements should see improvements in cost and expense control, Li said on a March 21 earnings call.
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