The Chinese electric vehicle company Nio is planning to trim its workforce by 10% during November 2023 in an attempt to reduce costs and improve company efficiency the carmaker said.

"We still have a gap between our overall performance and expectations," the organization told its staff in an email. "This is a tough but necessary decision against the fierce competition."

According to Reuters, Nio said that it would either defer or entirely cut long-term project investments that would not contribute to the company’s financial performance within the next three years. Nio also said that it's considering building a dealer network in Europe to speed up its sales growth.

Through the first nine months of 2023, Nio delivered 109,993 EVs in China, up 33.4% compared to the same period in 2022.

A price war in the Chinese EV market was started by Tesla earlier this year, dragging down the profitability of other electric vehicle producers who have been forced to cut costs and create new partnerships in order to survive industry consolidation.

Moreover, EV demand in China has weakened recently in favor of plug-in hybrids, which saw sales rise by 84.5% through the first nine months of 2023.