Nio Responds to Allegations of ‘Accounting Games’ and Inflating Revenue
2022.06.29 21:51
Nio (NIO) Responds to Allegations of ‘Accounting Games’ and Inflating Revenue
By Michael Elkins
Nio (NYSE:NIO) released a statement today, responding to a short-seller report released late Tuesday accusing the electric vehicle company of exaggerating revenue and profitability.
The report released by Grizzly Research alleges that Nio created Wuhan Weineng, Nio’s battery asset manager, and used the company to generate “billions in revenue” for the company through “accounting games.” For the nine months ended September 2021, Grizzly believes Nio “inflated its revenue and net income by ~10% and 95%, respectively.”
Nio claims, in its response, that “The report is without merit and contains numerous errors, unsupported speculations and misleading conclusions and interpretations.”
Nio’s board of directors, including the audit committee, is reviewing the allegations. The Company will make additional disclosures consistent with the requirements of applicable rules and regulations.
Wuhan Weineng was formed in 2020 as a joint venture between Nio and Contemporary Amperex Technology. Weineng collects Nio’s monthly subscription revenue for the company’s battery swap system and Battery-as-a-Service (BaaS) strategy. Nio is the “only major Chinese EV company” to have these features, which differentiates it from competitors.
