Photo Credit: Nio
Padmasree Warrior, the U.S. chief of EV maker Nio, suddenly resigned last week after a three-year stint at Nio, a company that's widely seen as a potential rival to Tesla.
Warrior resigned for “personal interests” from her role as chief development officer and CEO of Nio U.S., effective December 17, according to a release.
No warning of the executive departure was provided, and a replacement has not been named.
Warrior owns about 1.4 percent of Nio, according to the S-1 document filed in August. A rare woman chief auto executive, she leaves Nio just as it’s on the cusp of volume production and only a few months after raising $1 billion in its IPO.
Prior to Nio, Warrior was CTO at Cisco and CTO at Motorola.
$70K electric SUV vs. $135K Tesla
Nio just started delivering its first volume-built EV in June — an SUV with a driving range of 220 miles. A smaller SUV is slated for delivery in 2019. The initial SUV has a price of approximately $70,000 prior to incentives. A Tesla Model X will cost you $135,000 in China, more or less, depending on the shifting trade tariffs.
Nio is building its cars in an arrangement with JAC, a large state-owned automobile builder in China — so scaling manufacturing volume is less of a challenge than it might be for other startups.
The company uses lithium-ion batteries from a number of suppliers and plans to offer battery swapping options, some measure of autonomous driving and advanced connectivity features.
The EV builder is based in Shanghai, but employs approximately 700 people at its U.S. headquarters in San Jose, California.
Nio Q3 financial update
Nio generated $214 million in revenue in the third quarter of 2018 with a gross margin of negative 7.9 percent. Loss from operations was $409 million, but the company still had more than $1.3 billion in cash and cash equivalents as of September 30.
Nio built a total of 4,206 units in the third quarter, compared with 500 vehicles produced in the previous quarter. As a reference, Tesla is building roughly 5,000 units per week, according to estimates.
This is an early-stage company that is going to lose enormous sums of money over the coming quarters, as well as require massive investments in manufacturing and R&D.
Nio lost $758 million in 2017 and has lost $911 million this year, so far. All of its current business is in China.
Nio issued guidance for the fourth quarter of between 6,700 and 7,000 vehicles delivered and total revenue of between $418 million and $436 million.
Why would Warrior leave Nio now?
China is the world's largest EV market, with 579,000 electric passenger cars sold last year. Nio plans to go after the U.S. EV market after it establishes itself at home.
Nio is setting itself up to ride China's surging growth in vehicle electrification (while Tesla has struggled to access the Chinese auto market due to tariffs, high prices and various self-inflicted wounds).
This is just the beginning of the EV boom and the start of the EV manufacturing wave. It's going to come from Chinese companies like Nio and heavyweight BYD, American companies like Tesla and Proterra, and the European and Japanese automotive incumbents.
Nio’s shares are up from its IPO strike price, driven by big revenue growth and EV optimism — although the stock price declined a few percentage points on news of the CEO departure. The stock stands at $7.71 per share and is up in after-hours trading.
So, with global market tailwinds favoring vehicle electrification, why is Padmasree Warrior leaving this well-financed, well-positioned EV aspirant? It has to be more than “personal interests.”