What happened
Shares of Chinese manufacturer of electric cars NIO (NYSE: NIO) were traded higher Monday after a report that the company had hired a new leader for its self-propelled technology unit.
As of 2:15 a.m. EDT, U.S. shareholders of NIO were up about 6.1% above Friday’s closing price.
So what
TechNode reported that NIO has hired Shaoqing Ren, a computer vision expert who co-founded Chinese self-driving startup Momenta, to lead its self-drive efforts. NIO is an investor in Momenta like the business parent of Mercedes-Benz Daimler.
Ren replaces earlier Tesla (NASDAQ: TSLA) engineer Jamie Carlson, who led NIO’s autonomous auto-technology efforts from 2016 until he left in June.
According to the TechNode report, Ren will report directly to NIO CEO William Bin Li.
NIO’s Pilot Driver Assist system does not sell as well as Tesla’s Autopilot, something the company would like to change. Image Source: NIO.
During NIO’s call in the second quarter last week, Li said that only about 25% of NIO buyers order the advanced driver package, much lower than the roughly 68% of Tesla buyers who opt for Autopilot.
It is reasonable to expect that Ren will be commissioned in the full term to improve the package, NIO Pilot, in order to increase that percentage as soon as possible.
Well what
More broadly, Ren will now take the lead on NIO’s efforts to stay competitive with Tesla, which makes inroads in China, and with other rivals, including the soon-to-be-public Xpeng Motors. Xpeng is an emerging electric car manufacturer that has made great strides with its own advanced driving assistance systems.
NIOs self-driving research and development efforts slowed down amid the company’s cash crisis in the second half of 2019 and early 2020. Now, with nearly $ 1 billion in new funding secured, the company can secure Ren and its new team enough resources to resume development.
In China’s super-competitive car market, that’s Bullish news for the car investors holding NIOs’ stock.
