Nio Shrugs Off Old Lawsuit, Says Operations Remain Unaffected

Nio Inc. (NYSE:NIO) fell in Friday premarket trading after investors digested legal headlines tied to Singapore’s sovereign wealth fund and a years-old short-seller report.

The move came despite the Chinese EV maker’s swift statement pushing back on the allegations and stressing that the matter does not involve current operations.

Legal Backdrop

GIC Private Limited, Singapore’s state investor, has filed a lawsuit that revived questions first raised by short-seller Grizzly Research LLC in June 2022.

Also Read: US-China Trade Fight Hits Chinese Tech Stocks

In its response to CnEVPost, Nio stated that the issue was not new or related to its recent operations and claimed the short-seller report was filled with errors and misleading claims.

Nio emphasized that an independent board committee—assisted by international law firms and forensic accounting specialists—completed a review in August 2022.

The company reiterated to CnEV Post that the committee found the allegations had no factual basis, framing the current legal action as a continuation of issues first aired more than three years ago.

The lawsuit headlines weighed on sentiment early Friday, pressuring NIO shares before the opening bell.

Traders may have focused on potential legal overhang even as the company underscored that the dispute pertains to historical claims rather than present-day revenue recognition or delivery performance.

Broader EV Industry Developments: BYD Recall

In a separate development, electric vehicle-giant BYD Co. Ltd. (OTC:BYDDY) initiated a recall of more than 115,000 vehicles in China, including Tang and Yuan Pro models.

According to the country’s regulator, the State Administration for Market Regulation, Tang vehicles produced between March 2015 and July 2017 face risks tied to component design choices that could damage a circuit board.

Certain Yuan Pro models built from February 2021 through August 2022 will be repaired due to battery sealing issues. The campaigns encompass software updates and hardware remedies to address potential safety hazards.

Price Action: NIO shares are trading lower by 3.66% to $6.58 premarket at last check Friday.

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