Shares of Chinese electric vehicle maker Nio (NIO 0.95%) plummeted Thursday. While many names in the EV sector were also dropping in the market session, Nio shares were leading the declines. As of 12:20 p.m. ET, the stock was at session lows down 7.5%. And there was some company-specific news that could help explain the move.
Chinese media outlet 36Kr reported on Thursday that a high-ranking executive for Nio's autonomous driving unit was leaving the company. But the departure of Zhang Jianyong, Nio associate vice president of autonomous driving, may actually be a career move that ends up benefiting Nio, too.
Zhang started with Nio in 2015 and most recently reported directly to Nio CEO William Li. He helped to create the company's autonomous driving program and ran the autopilot system team that consisted of approximately 400 staffers. But Zhang won't be heading to a competitor.
According to Beijing-based media company Pandaily, Zhang plans to establish a computer chip business, and CEO Li has expressed a specific interest in investing. In the short term, the departure will likely shake up the structure of Nio's autonomous driving group. It currently consists of four separate teams, with Zhang overseeing one of them. Zhang's team was involved in system integration, sensor and camera development, and algorithms, among other things. The reports say the four teams will now become more integrated.
The segment should still report directly to Li, and his investment in Zhang's new business could result in a tie to Nio's business. While no one can tell how that will evolve, it should be comforting to Nio investors that Zhang is departing on good terms with the company and its CEO and not just jumping to the competition. But that's not how investors seem to be viewing it today.