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NIO's Shares Slide as Top Engineer Prepares to Leave

By John Rosevear – Apr 2, 2020 at 3:57PM

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Amid questions about NIO's dwindling cash, the leader of its powertrain unit is headed out the door.

What happened

Shares of Chinese electric-vehicle maker NIO (NIO -7.92%) were falling on Thursday, after a Chinese media outlet reported that the leader of its electric-drivetrain engineering team is leaving the company. 

As of 3:30 p.m. EDT, NIO's American depositary shares were down about 11.3% from Wednesday's closing price.

A gray NIO SUV

A NIO ES8, an upscale seven-passenger electric SUV. Image source: NIO.

So what

Chinese business-media outlet 36Kr reported that Charles Huang, the senior executive who has led NIO's electric-drivetrain development efforts since 2015, will leave the company on June 30. 

Huang is a key figure at NIO. He oversees over 200 employees charged with developing the company's battery-control systems, motors, and vehicle-control hardware and software -- all critical components of an electric vehicle. 

According to 36Kr's report, the department is being reorganized and many of its employees are being reassigned.

It's the latest in a series of signs that NIO is in turmoil amid a scramble to raise new cash. 

Now what

NIO has been struggling to stay afloat. It said on March 18 that it lost $406 million in the fourth quarter of 2019. NIO was very close to running out of cash at the end of the year; it has since raised about $435 million, but it needs a larger investment to get out of survival mode. 

NIO has been negotiating a larger financing deal with a city government in China. But nothing is signed as of now. If Chinese electric-car sales don't pick up soon, NIO -- and its investors -- may run out of luck. 

John Rosevear has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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