Grizzly Research, an investment consulting firm, released a detailed report on June 28, claiming that Chinese EV maker NIO (Chinese: 蔚来汽车）is playing "Valeant-Esque accounting games" to inflate revenue and boost net income margins to meet targets."

Grizzly mainly accuses NIO of using its unconsolidated affiliated party, Wuhan Weineng Battery Assets Company (Chinese: 武汉蔚能电池资产有限公司), to exaggerate revenue and profit margin.

Wuhan Weineng, acting as NIO's battery asset management provider, was established in 2020 as a joint venture between NIO and Contemporary Amperex Technology (CATL)(Chinese: 宁德时代). Weineng collects NIO's monthly subscription revenue for the company's battery system and battery-as-a-service (BaaS) strategy.

According to Grizzly Research, Weineng has 19,000 subscribers and 40,053 batteries in inventory on September 30, 2021. This discrepancy revealed that NIO had oversupplied Weineng by up to 21,053 batteries. Grizzly suggests NIO has manipulated numbers to inflate its revenue and boost net income margins.

In response to this matter, NIO claimed that the report conducted by Grizzly research is full of false statements and misinterpretations of the company's disclosure.

NIO has pulled forward over CNY 1.147 billion (USD: 171 million) in revenue, leading to an equivalent improvement in the first quarter of FY2021. According to Grizzly Research, it is estimated that NIO's actual net income for the period to be a loss of CNY 3.02 billion.

Shares of the Chinese electric car maker Nio sharply declined in New York, Singapore, and Hong Kong trading after the report's introduction, with an overall market value of USD 37.353 billion.

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