NIO Inc. (NIO) Accused of Inflating Company’s Outlook Amid Decreasing Demand and Disappointing Sales

According to the complaint against NIO Inc. (NYSE: NIO) for alleged violations of the Securities and Exchange Act of 1934 between September 12, 2018 and March 5, 2019, defendants represented that sales of NIO's ES8 were significantly growing, reaching 11,348 vehicles for the year ended December 13, 2018, and that the company experienced "solid ramp-up in production and delivery in 2018, which demonstrated our execution capabilities" and represented that demand for the ES8 and ES6 were strong. On February 24, 2019, in a 60 Minutes segment, NIO's Chairman and CEO represented that NIO had exceeded its goal of delivering 10,000 cars in 2018 and was "ramping up production."

Then, on March 5, 2019, defendants disclosed the truth - that sales were declining and material negative trends would negatively impact Nio's sales and revenues through at least the second quarter 2019. NIO had delivered just 1,805 ES8 vehicles in January 2019, a 45% decline from December 2018, and just 811 ES8 vehicles in February 2019, a 55% decline from January 2019.  Over two days of trading, NIO's ADSs declined over 30% to close at just $7.09 on March 7, 2019, and continue to decline.  As a result, at least one analyst lowered their rating of NIO from neutral to underperform.