Nio’s Stock Plunges as Revenue Inflation Allegations Surface

Nio's stock is trading sharply lower today following allegations that the Chinese electric vehicle manufacturer misled investors with inflated revenue figures. The news has triggered a sell-off, raising concerns about the company's financial transparency and governance.

The stock is currently down 8.5% in pre-market trading, reacting to a lawsuit filed by Singapore's sovereign wealth fund, GIC. The fund accuses Nio and its top executives of violating securities laws by artificially inflating revenues through improper accounting practices related to its battery subscription service.

The core of the allegation centers around Nio's relationship with Weineng Battery Asset Co., Ltd. (Weineng), an affiliated battery company. GIC claims Nio improperly recognized revenue by selling batteries upfront to Weineng, despite end-users paying for them gradually through a subscription model.

This practice allegedly allowed Nio to recognize the full revenue from battery sales immediately, rather than over time, thereby artificially inflating the company's financial performance.

Market Reaction and Stock Performance

The lawsuit, filed in the Southern District of New York, has already had a tangible impact on Nio's stock performance across multiple markets. In Hong Kong, the stock experienced a significant decline, plummeting as much as 13.8% to reach its lowest point since September 11, 2025 before closing down 8.99%.

Notably, these allegations are not entirely new. In 2022, a report by New York-based short-seller Grizzly Research raised similar concerns, accusing Nio of using an unconsolidated affiliate, Mirattery (another name for Weineng), to inflate revenue and profitability, drawing parallels to the Philidor-Valeant relationship.

While Nio initiated an internal review at the time, concluding that the claims were unfounded, the recent lawsuit by GIC has reignited these concerns, leading to renewed scrutiny of Nio's financial practices.