Core Viewpoint - NIO, a Chinese electric vehicle manufacturer, faces significant stock declines following a lawsuit from Singapore's Government Investment Corporation (GIC), which accuses the company of inflating revenue and profits through its Battery-as-a-Service (BaaS) model [2][3][8]. Group 1: Stock Performance - NIO's stock experienced a sharp decline, with Hong Kong shares dropping by 13%, Singapore shares down by 10.2%, and U.S. night trading falling over 10% [2][3]. Group 2: Lawsuit Details - GIC has filed a lawsuit in a U.S. court, alleging that NIO inflated its financial results, similar to previous accusations made by Grizzly Research in 2022 [7][8][12]. - The lawsuit centers around NIO's BaaS model, which allows customers to purchase vehicles without batteries, leading to concerns about the accuracy of reported revenues [21][22]. Group 3: BaaS Model Controversy - NIO's BaaS model has been criticized for potentially inflating financial data, with reports indicating that 10% of revenue and 95% of net profit in the first nine months of 2021 were attributed to this model [22]. - The establishment of Wuhan Weining, a company that purchases batteries from NIO and rents them to BaaS customers, has raised questions about the legitimacy of NIO's revenue recognition practices [24][28]. Group 4: Financial Implications - GIC's lawsuit claims that NIO's revenue surged from 2.85 billion yuan to 6.64 billion yuan in Q4 2020 due to these accounting practices, which contributed to a peak stock price of $62 [31]. - The lawsuit suggests that NIO's financial reporting may have misled investors, resulting in significant losses for GIC when the stock price subsequently fell [32]. Group 5: Previous Investigations - NIO has previously addressed these concerns, stating that its BaaS revenue recognition complies with GAAP standards, and independent investigations have not found substantial issues with its financial reporting [44][45]. - The ongoing legal situation is complicated by a prior collective lawsuit against NIO related to similar allegations, which is currently on hold pending the resolution of GIC's case [49].