Another day, another promising car startup with layoffs hitting and a co-founder bouncing out. All that and more for The Morning Shift for Thursday, August 15, 2019.
1st Gear: Nio Cofounder Bounces As Startup Hits Hard Times
I made it out to the Shanghai Auto Show this year and spent a few days wandering the streets of Shanghai, eating jianbing and buying teapots. As you do.
What surprised me most was not the architecture, or the giant prison right in the middle of a neighborhood, or the general atmosphere, but rather hey people actually drive Nio vehicles out here!
Indeed, I never really knew if Nio was, like, an actual company or just handed out press releases to that effect, but I was surprised to see not only a giant stand on the auto show floor, but actual big SUVs in traffic, handsome faces and all. Nio, I figured, was looking legit.
As it turns out, while I did see some real cars actually sold to real people, sales are not all that Nio would like them to be. Figures are disappointing, the Financial Times reports, with layoffs hitting and a co-founder summarily leaving the startup. From the FT:
Nio, China’s top electric car start-up by funding, has been hit by the departure of one of its founders after financial pressures led the company to cut its workforce by 10 per cent and sell its prizewinning racing team.
Company founder and former executive vice-president Jack Cheng left the company on Wednesday, according to an internal memo. Mr Cheng is a Taiwanese former Ford executive who often served as the company’s international face.
Mr Cheng’s exit follows a series of high-level departures from Nio. Li Zhang, the company’s former head of software, and Angelika Sodian, who headed Nio’s operations in Britain left the company in June. US chief executive Padmasree Warrior left at the end of last year.
Nio raised $3.9bn in venture-capital funding in addition to its IPO, but has been forced to cut staff and sell assets this year due to continued losses, which amounted to $390m in the most recent quarter.
The company will cut 1,000 positions worldwide this year or about 10 per cent of its workforce, it confirmed to the FT this month. Nio said in a May filing that it had laid off 70 employees across two Silicon Valley offices, one of which had closed.
The FT cited dropping sales across the board for “new energy” vehicles, as the Chinese government dubs them, but also a fire-related recall for Nio cars in specific. I would also add ditching a factory plan to that fire.
2nd Gear: Working With Elon Musk Sure Seems To Be A High-Turnover Position
This is a fun story to see attached to some degree of expertise. It appears that there’s a lot of turnover among positions that involve working directly with a certain Elon Musk, as Bloomberg notes in a wire report:
Tesla Inc.’s executive turnover is higher than major Silicon Valley-based technology companies and is particularly acute among those reporting to Chief Executive Officer Elon Musk, according to a Bernstein analyst.
About 44% of executives reporting to Musk have changed over annually, [Bernstein analyst Tony] Sacconaghi found, compared with about 9% on average at the other companies, which also include Amazon.com Inc., Uber Technologies Inc. and Facebook Inc.
I find this surprising. Musk seems super chill.
3rd Gear: Yeah So Cities Hate You Parking Your E-Scooters Anywhere You Want
The whole point of e-scooters is you get to use them like fun trash, picking them up and dropping them off wherever. You are a scooter scavenger, the city streets are ripe with succulent mobility solutions.
Well, yeah, so, uh, cities hate that. Berlin in particular is looking to start restricting where exactly you can drop these things off, as German paper Der Spiegel reports:
In Berlin, electric scooters will no longer be parked on the sidewalk in the future. Instead, the city wants to create areas specifically for the parking of rental vehicles and private wheels on the roadside. For this purpose, car parking spaces should be rededicated.
Traffic Senator Regine Günther (Greens) has also announced that rental scooters may no longer be parked at the Brandenburg Gate along with Pariser Platz and the Holocaust Memorial. In the apps of several major rental companies, these areas are already registered as restricted areas.
In Mitte district parking is no longer allowed in all public green areas. District Mayor Stephan von Dassel (Greens) had complained about the amount of e-scooters and numerous violations of the drivers. Citizens complained about the scooters. Affected are above all places where many tourists stayed.
Other cities in Germany are looking at similar proposals, as Der Spiegel notes, and I wouldn’t be surprised to see restrictions clamp down worldwide within a few years.
4th Gear: Schlock Ruining Event, Car Cruise Regulars Lament
The Woodward Dream Cruise is being ruined, local businesses say! What is the problem? Too many LS swaps? Not enough triple-carb Y-blocks? No, it’s chintzy merchandise, as the Detroit News reports:
“Everybody is trying to sell something now. That’s the worst thing I think,” Duggan’s general manager Larry Payne said. “So many T-shirt vendors, people selling license plate signs, anything to do with (the Dream Cruise). It seems like it’s every five feet down Woodward.”
“Back when this started, it was just a cruise. Nobody was really trying to profit on anything,” Payne said. “Obviously, we here at Duggan’s get busier because the crowds and we’re selling our drinks and food, but other than that we don’t get into selling anything outside for the profit.”
Payne complained that the event, a celebration of maybe the most revolutionary consumer product of the industrial age, is too “commercialized.” I feel him.
5th Gear: Huuuuh
The New York Times ran this a few days ago, from an “on background” meeting that it lifted since international creep Jeffery Epstein’s death. In it is a truly bizarre account of trying to run down a rumor that Epstein was advising Musk in the Tesla boss’ 420 Twitter Drama days a year ago.
Tesla denies the whole thing, the NYT reporter didn’t ask any questions of the very young woman who answered the door at the registered sex offender’s Manhattan mansion, it is all very strange.
Reverse: Looks Like A Step Down If You Step Back Far Enough, To Be Honest
Neutral: Who Is Going To Make It Out?
I make it a point not to bet on any particular car startup. You never know how rough things can be under the surface, a lesson we all learned covering Faraday Future, not to mention Tesla. But is there a startup out there that you think is a sure shot?