SINGAPORE, Oct 16 — Singaporean sovereign wealth fund, GIC, has sued Chinese electric vehicle maker Nio Inc in a US court, accusing the company and its top executives of violating securities laws by artificially inflating revenues.
The lawsuit, filed in the Southern District of New York, names Nio, its CEO Li Bin, and its former CFO Feng Wei as defendants. Following the news, Nio’s shares plunged as much as 10 per cent in Hong Kong and 9.8 per cent in Singapore today, Bloomberg reported.
GIC alleges that Nio made “materially false and/or misleading statements” about its relationship with an affiliated battery company, Weineng.
The suit contends that Nio improperly booked revenue by selling batteries upfront to Weineng, even though end-users were paying for them gradually through a subscription service.
This accounting practice, GIC argues, allowed Nio to recognize the full revenue from battery sales immediately instead of over time, which artificially inflated the value of Nio’s securities and caused GIC to suffer “significant losses.”
Nio, once seen as a major rival to Tesla, is known for its innovative battery-swap technology, where customers can buy a car without the battery and pay a monthly subscription to swap depleted batteries for fully charged ones at dedicated stations.
The lawsuit mirrors allegations first raised in a 2022 report by New York-based short-seller Grizzly Research.
That report prompted Nio’s share price to plunge and led to a separate class-action lawsuit filed against the company in 2022. According to a court filing, a judge has temporarily stayed the GIC case because it is similar to the earlier suit.
In its filing, GIC is seeking compensation for all losses related to Nio’s alleged wrongdoing, as well as reimbursement for its legal costs.
Nio did not immediately respond to a request for comment, and GIC declined to comment on the lawsuit.
