Chinese EV startup NIO has sold the majority stake in its Formula E all-electric racing series team, according to longtime motorsports journalist Sam Smith. The company will remain a sponsor, a person familiar with the sale tells The Verge, but Chinese motorsports promotion company Lisheng Racing bought the stake and will run the team’s operations from here on out. NIO has been looking to sell its entry since at least April, according to two people familiar with the sale, who were granted anonymity because they were not authorized to speak about it.

The young automaker is the second EV startup to scale back operations in the five-year-old motorsport, which now features powerhouse manufacturers like Audi, BMW, and soon, Mercedes-Benz and Porsche. The first was Faraday Future, which backed out of the series in 2017 as the EV startup began a serious flirtation with bankruptcy.

Just five years in, Formula E features powerhouse automakers

A NIO spokesperson confirmed to Quartz that the Formula E team has “new strategic investors who are beneficial to [its] long-term development.” The company has repeatedly declined to comment on “the ongoing speculation around the NIO Formula E team” when asked by The Verge over the last three months. Representatives for Lisheng Racing did not respond to requests for comment, nor did NIO’s team manager Gerry Hughes.

Formula E is the first global all-electric racing series, and it’s governed by the same organization that oversees Formula One. NIO began sponsoring a team in Formula E during the inaugural 2014–2015 season, when the automaker was still called NextEV. The company found early success, too: NextEV finished fourth out of the 10 teams that competed in the first season, and one of its drivers won the inaugural drivers’ championship.

Since then, though, NIO has struggled. NIO finished last out of nine teams in season 2, sixth out of 10 teams in season 3, eighth out of 10 teams in season 4, and last again — this time out of 11 teams — in season 5, which wrapped up in July. The team hasn’t won a race since the first season.

NIO has struggled since the launch of its first car last year

The sale of the stake in the Formula E team is the latest in a recent series of cost-cutting moves by the startup, which has had a rough financial start to 2019 thanks to a number of internal and external factors. NIO abandoned plans to build its own factory in Shanghai in March, and announced layoffs in both China and the US at the beginning of May. Also in May, the company indefinitely postponed what was supposed to be its third production car, an electric sedan known as the ET7.

The company recently told The Verge it is focused on “optimizing management efficiency” in 2019 as it comes off of four years of “rapid growth,” during which NIO created an all-electric supercar, designed and delivered its first production vehicle, and went public on the New York Stock Exchange. The cuts don’t seem to be stopping, either, as more are reportedly happening in China right now.

NIO started off well enough in Formula E, but it has struggled mightily since season 1

Formula E isn’t as expensive as other major motorsports thanks to cost control measures put in place by the series’s organizers. But NIO’s tab for competing in the series is still millions of dollars per year, and it has likely only gone up as Formula E switched to newer, faster cars and started reaching a bigger audience.

NIO never disclosed exactly how much it spent on the sport, but a financial filing with the Securities and Exchange Commission shows the company spent $168.5 million in 2018 on “marketing and promotional expenses,” a category it says “primarily consist[s] of marketing and advertising costs, sponsorship fees and racing costs related to our Formula E team.” That was more than double the year prior when NIO spent $77.7 million on the same category. A UK subsidiary of the company that does work on the Formula E team posted a loss of £14,135,918 in 2017 (about $19 million at the time) in the most recent data available at the Companies House registry.

NIO almost certainly didn’t spend all that money on its Formula E team, one of the people familiar with the sale says. Jaguar, for instance, spent around $16 million getting its Formula E team off the ground in 2017 and about $40 million through March 2018.

Selling the slot in the series won’t do much to help NIO’s bottom line, and sponsoring the team will also likely cost NIO millions of dollars, the person said. But the entry itself does command something of a premium. Formula E founder and CEO Alejandro Agag was reportedly asking €25 million (nearly $28 million) for the 12th slot that was added for season 6, which went to Porsche.