Chinese electric vehicle manufacturer Nio (NIO) has announced plans to spin-off its battery production unit by the end of this year.
According to the Reuters News Agency, Nio is spinning off its battery business in an effort to achieve profitability and reduce costs.
Nio reported a quarterly net loss of $542 million U.S. on Dec. 5.
Nio is aggressively competing against global market leader Tesla (TSLA) within its home market of China, where competition for electric vehicles is fierce.
Executives at Nio said that despite the spin-off, they still have a long-term goal of developing their own electric vehicle batteries, but that they currently buy most of their needed batteries from external sources.
Nio’s stock has declined 23% this year to trade at $7.43 U.S. per share.
