GIC Sues Nio Over Battery Revenue Claims as Shares Slide and US Case Is Put on Hold

A Battery Business at the Center of a Securities Dispute

Singapore's sovereign wealth fund GIC has sued Chinese electric vehicle maker Nio, alleging that it improperly recognized more than $600 million in immediate revenue through its battery leasing affiliate, Weineng. The lawsuit, filed in August in the US District Court for the Southern District of New York, names Nio, its cofounder and chief executive William Li, and former chief financial officer Feng Wei as defendants.

Nio shares fell as much as about 13 percent in Hong Kong and nearly 10 percent during Singapore trading on Thursday, October 16, 2025, as news of the filing hit investor confidence. At the Singapore session low near $6, the decline erased about $2.4 billion from the company's market value, according to price and volume data for the session.

GIC alleges that Nio used sales to Weineng, formally known as Nio Battery Asset Co. and also called Mirattery, to record battery revenue immediately while drivers paid for access through monthly subscriptions. The fund also says Nio controlled the affiliate closely enough that its financial results should have been combined with Nio's accounts.

The case is already on hold. On October 3, a judge stayed GIC's lawsuit in favor of an earlier investor class action filed in 2022 that raises similar accounting questions. Nio does not have to respond to GIC's complaint while that pause remains in place.

GIC's decision to sue is a rare step for the sovereign investor, which manages one of the world's largest pools of capital and invests over long periods in technology, infrastructure and other sectors. Its complaint brings renewed scrutiny to a financing structure behind one of Nio's defining products.

What GIC Says Investors Were Told

GIC alleges that Nio issued false statements and withheld important information about its relationship with Weineng and the timing and nature of revenue from the battery program. The complaint identifies 14 instances of statements it calls materially false or misleading between August 2020 and June 2022.

GIC says it purchased more than 54 million American depositary shares between August 2020 and July 2022. Those securities are the form in which investors hold Nio shares on the US market. The purchases covered a period when Nio's stock rose sharply and later retreated.

The fund argues that the alleged misstatements pushed the securities above their proper value, exposing it to losses when doubts about the accounting emerged. GIC's complaint describes the alleged effect on its investment:

GIC's complaint says the defendants' statements artificially inflated the value of Nio's securities, and when the truth emerged, Nio's securities plunged, causing GIC to suffer tremendous losses.

GIC seeks compensation for losses it attributes to buying securities at allegedly inflated prices, along with reimbursement of legal costs. It has also requested a jury trial.

How Drivers Pay for Nio Batteries

Nio, which has been listed in the United States since 2018, built its brand around premium electric cars and a network of battery swap stations. Drivers can exchange a depleted battery for another pack in a few minutes instead of waiting for the depleted pack to recharge.

The company's Battery as a Service program, known as BaaS, lets customers buy a vehicle without purchasing its battery. They then pay a recurring fee for battery access and use of the swap network. Batteries often account for 30 to 40 percent of an electric vehicle's price, so separating that expense reduces the initial amount a buyer must pay.

Nio's model spreads the customer's battery cost over time, but running it requires substantial investment. The company needs swap stations and a large pool of batteries that can move between vehicles. Money is tied up in those assets before customers finish making their subscription payments.

Nio and its partners established Weineng in August 2020 to own battery assets and manage leases in support of BaaS. Its partners included battery maker CATL, Guotai Junan and Hubei Science Technology Investment. GIC's complaint challenges both the accounting for Nio's battery sales to that company and the degree of independence Weineng had from Nio.

Why the Timing of Revenue Matters

GIC's central allegation concerns when Nio recorded income. According to the complaint, Weineng bought batteries from Nio upfront, allowing the automaker to recognize the full sale immediately even though drivers paid for battery access over many months.

Revenue recognition is the accounting process for deciding when a sale belongs in a company's financial results. Recording the whole value at once produces a different picture from recognizing income gradually as a service is provided. GIC argues that Nio should have recognized the disputed battery income over time.

The fund says Weineng was created to help Nio bring forward revenue from leased batteries while moving depreciation and financing costs away from Nio's balance sheet. Depreciation records the cost of an asset as it is used over time. Financing costs arise from obtaining the money needed to acquire or hold those assets.

GIC alleges that recognizing more than $600 million immediately unlawfully boosted Nio's reported sales and margins in the short term. It says this gave investors a stronger impression of the company during 2020 and 2021, when its stock climbed above $60.

Nio had faced liquidity pressure before Weineng was established. Battery rentals and swapping required cash for batteries and station infrastructure. After the affiliate's formation, Nio reported a sharp increase in revenue late in 2020, which critics attributed in part to upfront recognition of battery sales to Weineng.

Who Controlled Weineng?

GIC's second major argument is that Weineng was not truly independent. The fund alleges that Nio funded, directed and economically controlled the affiliate, held a controlling financial interest in it and was its primary beneficiary.

Under US accounting rules, a company must consolidate another entity when it is the primary beneficiary of a variable interest entity. In practical terms, that assessment considers who has power over the activities that matter most and who bears the main financial risks or receives the main financial benefits.

Consolidation means combining the entities' financial results. If Nio were required to consolidate Weineng, battery sales between the two would be removed from the combined accounts because a group cannot generate outside revenue by selling something to itself. Under the treatment GIC argues was required, revenue would instead be recognized as end customers made payments.

GIC says Nio failed to disclose fully how much control it exercised over Weineng. The complaint therefore challenges the substance of the relationship as well as the timing of individual sales. The court filing also refers to questions from the US Securities and Exchange Commission about whether Weineng should be treated as a variable interest entity.

How the Dispute Developed

Nio's battery structure has been under public scrutiny since 2022. A short seller's allegations that June focused on whether the battery asset company had been used to exaggerate revenue and margins. Nio rejected those claims and appointed an independent committee to examine them.

The dispute now connects events spanning more than five years:

• August 2020: Nio and partners established Weineng to own battery assets and manage leases. GIC's stated period of share purchases and alleged misleading statements began that month.
• Late 2020: Nio reported a sharp revenue increase after Weineng's creation, which critics linked to immediate recognition of battery sales.
• January 2021: Nio's US shares reached more than $60 after surging during 2020.
• June 2022: A short seller accused Nio of exaggerating revenue and margins through its battery asset company. Nio rejected the allegations and announced an independent review.
• July 2022: The period in which GIC says it bought more than 54 million American depositary shares ended.
• 2022: Investors filed the earlier class action involving similar claims about battery revenue and Weineng.
• August 2025: GIC filed its lawsuit in the Southern District of New York.
• October 3, 2025: A judge stayed GIC's case in favor of the earlier class action.
• October 16, 2025: News of GIC's filing was followed by sharp falls in Nio shares in Hong Kong and Singapore.

Court documents say the Securities and Exchange Commission later requested information about Weineng's accounting status. That regulatory inquiry forms part of the history described in GIC's complaint.

What Nio and GIC Have Said

Nio has not issued a detailed response to GIC's new complaint while the case is stayed. Its public position on the similar allegations raised in 2022 was that they were unsubstantiated.

The company said it completed an internal review overseen by an independent committee and reached that conclusion after examining the earlier claims. GIC has declined to comment beyond its court filing.

Nio continues to promote its battery swap network while developing new models and working to contain costs. The company faces intense competition and persistent losses as it pursues that strategy.

A Share Price Shock During Continued Losses

Nio's Hong Kong shares recovered some ground after falling as much as about 13 percent on October 16. In Singapore, the stock was down close to 10 percent during the session. The roughly $2.4 billion reduction in market value at the Singapore low added pressure to a company that has never reported an annual profit since its founding in 2014.

Nio reported revenue of 19 billion yuan and a net loss of 5 billion yuan for the second quarter of 2025. Vehicle deliveries reached 72,056, an increase of more than 25 percent from the same quarter a year earlier.

Those figures put the quarterly net loss at about 26 percent of revenue: 5 billion yuan divided by 19 billion yuan. Delivering more vehicles therefore remained accompanied by a substantial financial loss.

Nio also recently raised about $1 billion through a share sale to support new models and expand production capacity. The company is seeking money for growth while managing the cost of its existing operations and battery infrastructure.

The stock's longer decline provides another measure of the pressure. Nio's US shares rose above $60 in January 2021 but surrendered most of those gains as losses continued and competition intensified. By October 2025, the shares were trading in the middle of the single digit dollar range.

The reaction to GIC's lawsuit shows how quickly concerns about financial reporting can affect investor confidence. For a business that needs continuing investment in vehicles, batteries and swapping stations, that confidence matters when raising capital.

What Happens While the Lawsuit Is Paused

The October 3 stay means the court will first address the earlier consolidated investor class action. That case challenges Nio's treatment of battery revenue and its relationship with Weineng, placing similar accounting questions before the court.

If the earlier case proceeds, it is likely to examine whether battery sales to Weineng should have been recognized over time and whether the affiliate's results belonged in Nio's consolidated financial statements. No date for resuming GIC's case has been given.

Securities litigation can take years. The process can include requests to dismiss claims, discovery in which the parties exchange evidence, expert analysis and settlement discussions. A trial would require explanations of the battery leasing structure and accounting rules, with both sides expected to rely on accounting and industry experts to help a jury understand them.

A finding that revenue was recognized too early, or that Weineng should have been consolidated, could require Nio to reconsider how it presents the economics of the battery business to investors. GIC is seeking damages for its alleged investment losses, while the earlier class action addresses overlapping claims from other investors.

Why the Battery Structure Matters Beyond the Case

Nio's subscription model links a practical benefit for drivers to a demanding financial structure. Battery swapping reduces charging time and can ease concerns about driving range, while buying a car without a battery lowers the initial purchase price. Providing those benefits requires a deep inventory of battery packs and a network of stations.

Joint ventures and separate asset companies can bring outside partners into financing that infrastructure. The capital burden helps explain why automakers use such structures. GIC's lawsuit focuses on how the resulting relationships should appear in financial statements and when income from them should be recorded.

Investors examining similar businesses will be watching how the court handles control, related party transactions and performance obligations, meaning the promises a company must fulfill under a contract. Those questions affect how investors judge reported revenue, expenses and the resources needed to keep a subscription service operating.

Nio must also contend with price competition that has tightened margins in a crowded electric vehicle market. The litigation adds to its execution challenges, with a possible effect on the cost of capital and the pace of expansion. Its outcome could also influence how other companies structure battery subscriptions and how investors assess transactions with affiliated businesses.

At a Glance

• GIC sued Nio, chief executive William Li and former finance chief Feng Wei in New York in August 2025, alleging misleading statements about battery revenue and Weineng.
• The complaint challenges more than $600 million in immediate revenue recognition and says Weineng should have been consolidated into Nio's accounts.
• GIC says it bought more than 54 million American depositary shares between August 2020 and July 2022 and seeks damages and legal costs.
• Nio shares fell as much as about 13 percent in Hong Kong and nearly 10 percent during Singapore trading on October 16.
• A judge paused GIC's case on October 3 in favor of an earlier investor class action filed in 2022.
• Nio previously said an independent committee's review found similar allegations unsubstantiated.
• Nio reported second quarter revenue of 19 billion yuan, a net loss of 5 billion yuan and 72,056 vehicle deliveries in 2025.
• The automaker recently raised about $1 billion through a share sale for new models and production capacity.