MW Nio's stock is cratering after the EV company was accused of fraud - again

By William Gavin

The Chinese electric-vehicle maker was sued by Singapore's sovereign wealth fund over claims it juiced its numbers

Nio Inc.'s relationship with a battery-asset company is back under scrutiny.

Shares of Chinese electric-vehicle company Nio Inc. are falling Thursday after a lawsuit from Singapore's sovereign wealth fund revived years-old allegations of fraud.

The wealth fund, GIC Private Limited, filed a lawsuit in the Southern District of New York in late August naming the carmaker, as well as its Chief Executive William Li and former Chief Financial Officer Steven Feng, as defendants. The allegations center on Nio's $(NIO)$ relationship with the "superficially independent" battery-asset company Weineng, which was controlled by Nio.

It's the first time that a sovereign wealth fund has sued a Chinese company listed outside the country, according to Chinese media outlet Caixin, which reported the lawsuit this week. Nio's American depositary receipts were down more than 6% in premarket trading Thursday, while shares listed in Singapore and Hong Kong dropped by about 9%.

Nio did not immediately return a request for comment. GIC's lawsuit has been stayed by a judge until a prior class-action lawsuit is resolved.

Weineng was founded in 2020 by the defendants and three investors, including battery supplier Contemporary Amperex Technology Co. (HK:3750), each of which started had close ties to Nio. GIC claims that Nio had a "disproportionately larger economic interest" in Weineng and controlled its revenue, and that Weineng was a "mere facet" of the vehicle maker's business.

"NIO set the terms of the contracts with Weineng, maintained the batteries and services connected with them, guaranteed Weineng's contracts, was liable for defaults by subscribers up to a certain amount and collected revenue for Weineng," the lawsuit states.

Nio operates a subscription model that allows its customers to pay fees to access a network of battery-swap stations, rather than buying batteries for their cars up front. GIC alleges that Nio illegally recognized more than $600 million of leased-battery revenue from Weineng, which purchased its batteries and "superficially" leased them to consumers, allowing Nio to pull forward "years" of revenue.

GIC said it purchased about 54.45 million Nio American depositary shares between August 2020 and July 2022 at prices it claims were artificially inflated, resulting in "tremendous losses" after a report from short seller Grizzly Research spurred a selloff. It argues that that it would not have purchased those shares if it had been aware of the nature of the relationship between Nio and Weineng.

Grizzly's June 2022 report claimed Nio had "juiced its numbers" and likened the Nio-Weineng relationship to that of Philidor and Valeant, which engaged in a multimillion-dollar kickback scheme that resulted in multiple executives being sentenced to prison in 2018. Following Grizzly's report, Nio said it would create an independent committee to investigate the allegations. In August 2022, Nio stated that its internal review found that the accusations were unsubstantiated.

-William Gavin

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October 16, 2025 09:26 ET (13:26 GMT)

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