Despite stumbling on numerous occasions over the past few years, cash-strapped Chinese electric startup NIO is still up for a fight to make its mark in China's growing electric car market. NIO announced this week that it plans to launch its third fully-electric sports utility vehicle (SUV), which is meant to go head-to-head with similar products offered by its bigger competitors.
The New York-listed company did not immediately disclose the pricing and availability of its new SUV but it did reveal key specifications of the vehicle. NIO revealed that the new model will be an "SUV Coupe" with a panoramic-view window. The vehicle is meant to go against the Mercedes-Benz GLC Coupe and Tesla's latest product, the Telsa Model Y SUV.
NIO currently has three existing models. The company has two fully-electric SUVs, namely the NIO ES8 and the NIO ES6. It also has a fully-electric sports car called the NIO EP9.
The release of yet another SUV is a big risk for the company given its recent struggle to sell its previous products. Analysts have also stated that SUV Coupes typically fall into a very niche market in China and it would be very hard for the company to see large sales number for the particular type of product. If NIO's targets for its new vehicle remain low and it manages to keep costs down, the move could generate profits for the company.
Similar to traditional Chinese carmakers, NIO has been having a hard time coping with China's overall auto sales slump. The company is also facing stiff competition from global players such as Tesla and Daimler, who have doubled down on their investments in the country to push their products to Chinese customers.
Due to its falling sales numbers, NIO had been forced to drastically reduce its workforce. In January, the company cut its workforce from 9,900 employees to 7,800 employees.
Apart from dealing with increasing competition, NIO has also been the subject of scrutiny by its investors as it remains unprofitable. There has also been criticism over how it managed to burn through $5 billion in just four years. Since it listed its shares in New York last year, the company has lost more than 60 percent of the value of its initial IPO pricing.
NIO, which is backed by Chinese tech giant Tencent Holdings, recently tried to raise $200 million in new capital from William Li Bin and Tencent. However, it is not yet clear if the company had managed to get the amount it had asked for from the investors.
