NIO (NYSE:NIO) is on watch on Thursday after Singapore sovereign wealth fund GIC filed a major lawsuit against the Chinese electric vehicle company, accusing it of inflating revenue by over $600 million through deceptive accounting methods related to its battery-leasing operations.
GIC was established in 1981 to manage Singapore’s foreign reserves with a long-term focus on achieving returns above global inflation over a 20-year horizon. The fund currently manages an estimated $850 billion in assets, which makes it one of the largest sovereign wealth funds globally and gives it a powerful voice.
The lawsuit, which was filed in the U.S. District Court for the Southern District of New York, claims that NIO (NYSE:NIO), CEO William Li, and former CFO Feng Wei violated U.S. securities laws by issuing false and misleading statements about the company’s financials.
The complaint centers on Weineng Battery Asset Company, a battery-leasing affiliate established in 2020 with NIO’s (NIO) suppliers and financial partners, including CATL and Guotai Junan International Holdings. Plaintiff GIC argues that NIO (NIO) improperly recognized immediate revenue from selling leased EV batteries to Weineng, even though customers made payments monthly under battery-subscription plans. Since Weineng was allegedly controlled by NIO (NIO), the lawsuit indicates the automaker should have consolidated its financial results instead of recognizing hundreds of millions of dollars in advance revenue.
GIC claims it bought roughly 54.5 million NIO (NIO) shares during the alleged misstatement period and suffered “tremendous losses” when the truth emerged and the stock slumped.
Shares of NIO (NIO) fell 9% in Hong Kong trading. The U.S.-traded ADRs showed a 6.9% decline in the premarket session to $6.35. NIO (NIO) traded at a 2025 high of $8.02 earlier in the month. XPeng (XPEV) and Li Auto (LI) showed modest declines in the early session.