The short-seller that unraveled Nikola's GM deal says another electric-vehicle startup engaged in fraud

• Hindenburg Research is back with more allegations of fraud.
• The short-seller has accused Kandi motors of fake sales and deceptive accounting practices.
• In September, a Hindenburg report unraveled electric-truck startup Nikola's $2 billion deal with General Motors, with the two companies eventually agreeing to a scaled-down deal instead.

Hindenburg Research is looking for a victory lap.

After single-handedly unraveling Nikola's potential $2 billion deal with General Motors over the summer, the short-selling research firm has a new target: Kandi Motors.

The China-based and Nasdaq-listed electric-car startup has used in-house corporate entities to fake sales and show illegitimate growth, Hindenburg alleged in its report released Monday.

"The company's largest customer, representing ~55% of last twelve months (LTM) sales, shares a phone number with a Kandi subsidiary, and shared an executive with Kandi," the report says. "We visited the 'customer.' It is based in a tiny building right next to Kandi's factory with a sign indicating that it's a Kandi company. The same building housed another entity used by Kandi as part of a separate fake sales scheme to collect illegitimate subsidies from the Chinese government, for which it was fined and sanctioned."

Shares of Kandi have tumbled more than 33% since the report was published Monday.

The company told Business Insider it takes seriously any allegations of impropriety, and it would study Hindenburg's report. "We intend to thoroughly research the accusations, investigate internally as needed, and offer a public response in the near future," a spokesperson said.

Hindenburg alleged that a fake revenue scheme was used as a ploy to raise money on US capital markets, and said the company has raised $160 million from investors since November. It also pointed to past SEC investigations and EPA fines.

"The company will likely issue some sort of press release declaring everything we say false and misleading, as they always do, while ignoring all or the vast majority of the questions we've raised," Hindenburg said, alluding to its fight with electric-truck startup Nikola over the summer.

In September, shortly after General Motors and Nikola announced a partnership potentially worth up to $2 billion, a Hindenburg report caused the startup's stock to plunge, its founder to relinquish his role in the c-suite, and GM to scale back its partnership.

Hindenburg said it's still short Nikola, too, and will "keep calling it out as we see it."