On October 16, shares of NIO Inc. (NYSE: NIO) experienced sharp fluctuations in the U.S. market. News that Singapore’s sovereign wealth fund GIC (Government of Singapore Investment Corporation) had filed a lawsuit against NIO sent investors into a cautious mood.

At the open, NIO’s share price plunged sharply and at one point dropped to US$6.28, down more than 12% intraday — the largest single-day decline in nearly a month. The stock later stabilized at lower levels and eventually closed at US$6.83, up 0.15%.

(Image Source: uSMART HK app)

Background: GIC Alleges “Inflated Revenue,” NIO Responds Swiftly

According to foreign media reports, GIC has filed a lawsuit with the U.S. District Court for the Southern District of New York, accusing NIO and certain executives — including CEO William Li and the former CFO — of artificially inflating revenue between 2020 and 2022. The complaint alleges that NIO engaged in transactions with its related company Wuhan Weineng Battery Asset Co., prematurely recognizing battery leasing income to boost reported performance and mislead investors.

NIO quickly responded, stating:

“The company firmly denies these allegations. An independent investigation was conducted in 2022, which found no wrongdoing. NIO will actively cooperate with the legal process to safeguard the interests of the company and its shareholders.”

Despite the prompt response, the lawsuit continues to draw attention. Regardless of its eventual outcome, the case could temporarily weigh on NIO’s reputation and financing prospects in overseas capital markets.

Technical Outlook: Holding Support Near US$6.30

From a technical perspective, NIO shares have been trending lower since October 10. The sharp, high-volume sell-off on October 16 formed a classic “event-driven panic” pattern. The US$6.30 level now serves as key short-term support.

If this level holds — accompanied by shrinking trading volumes and easing sentiment — the stock may gradually recover. However, if legal uncertainty intensifies or investor confidence fails to return, further downside toward the US$6.00 mark cannot be ruled out.

Market data also show that NIO’s five-day average turnover rate has risen significantly, suggesting that some short-term traders are bottom-fishing, while long-term investors remain cautious.

Fundamentals: Financing and Product Expansion Continue

While the lawsuit has captured market headlines, NIO continues to advance on both financing and product fronts.

On the capital side, NIO completed an equity financing of about US$1.16 billion in September, strengthening its cash flow and funding for R&D.

On the product front, the company unveiled the 2026 ES8 SUV during its latest NIO Day and simultaneously launched its sub-brand Onvo L90. Analysts estimate that pre-orders for the L90 may have exceeded 30,000 units.

Internationally, NIO is accelerating its European expansion, entering new markets such as Greece and Cyprus, and partnering with local distributors to broaden its sales network.

Overall, these moves demonstrate that NIO is still pursuing its global strategy, optimizing its business structure, and improving liquidity.

Profitability Challenges: Heavy Assets and Fierce Competition

According to NIO’s Q2 financial report, revenue reached approximately RMB 19.01 billion, up more than 20% year-on-year, while net losses widened to US$932 million.

The persistent losses stem mainly from three factors:

Heavy capital investment, as spending on battery swapping networks and R&D continues to grow.Intensified price competition in China’s EV market, driving thinner margins.Rising costs for batteries, chips, and logistics.

Investor View: Rebuilding Trust Is Key

From an investor standpoint, NIO is now in a “trust-rebuilding phase.” If the GIC lawsuit is resolved favorably, the company could gradually restore market confidence, supported by new model deliveries and overseas growth.

However, if legal risks persist and financing pressure mounts, short-term volatility is likely to continue.

How to Buy NIO, Inc on uSMART HK

After logging into the uSMART HK app, click on “Search” at the top right of the page, input the stock code (NIO.US) to access the details page and view transaction details and historical trends. Then click the “Trade” button at the bottom right, select the “Buy/Sell” option, fill in the transaction conditions, and submit your order.

(Image Source: uSMART HK app)