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What changed in Microvast Holdings, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Microvast Holdings, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+516 added−722 removedSource: 10-K (2026-03-16) vs 10-K (2025-03-31)

Top changes in Microvast Holdings, Inc.'s 2025 10-K

516 paragraphs added · 722 removed · 242 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

1 edited+147 added−377 removed0 unchanged
Biggest changeOn July 23, 2021 (the “Closing Date”), Microvast, Inc. and Tuscan Holdings Corp.(“Tuscan”) consummated the previously announced merger (the “Merger” or the "Business Combination"), pursuant to the Agreement and Plan of Merger (the “Merger Agreement”) dated February 1, 2021, between Tuscan, Microvast, Inc. and TSCN Merger Sub Inc., a Delaware corporation (“Merger Sub”).
Biggest change("Tuscan") a Delaware corporation established in November 2018 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or 11 Table of Contents similar business combination with one or more businesses, consummated the acquisition of Microvast, Inc. pursuant to an Agreement and Plan of Merger dated February 1, 2021, between Tuscan, Microvast, Inc. and TSCN Merger Sub Inc.
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Report of Independent Registered Public Accounting Firm F - 2 Consolidated Balance Sheets as of December 31, 2024 and 2023 F- 5 Consolidated Statements of Operations for the Years Ended December 31, 2024, 2023 and 2022 F- 7 Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2024, 2023 and 2022 F- 8 Consolidated Statements of Changes in Shareholders’ (Deficit)/Equity for the Years Ended December 31, 2024, 2023 and 2022 F- 9 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022 F- 12 Notes to Consolidated Financial Statements F- 14 F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors of Microvast Holdings, Inc.
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ITEM 1. BUSINESS Business Overview Founded in 2006 and headquartered in Stafford, Texas, Microvast Holdings, Inc. (NASDAQ: MVST) is a global leader in advanced specialized battery technologies. Since our public listing in 2021, we have focused on delivering high-performance lithium-ion battery solutions for the next generation of commercial and industrial electrification.
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Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Microvast Holdings, Inc. and its subsidiaries (the “ Company ”) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, changes in shareholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes and the schedule listed in Schedule I (collectively referred to as the “ financial statements ”).
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We specialize in the design, development, and manufacturing of battery components and systems primarily for electric commercial vehicles and energy storage systems (“ESS”). Our guiding principle is to innovate lithium-ion battery designs from the ground up without relying on legacy technologies. We believe that this approach allows us to create purpose-built solutions for new markets, rather than repurposing existing ones.
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In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
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Our mission is to become a leader in U.S. domestic battery production, reducing reliance on overseas suppliers, and strengthening national energy independence.
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We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 31, 2025, expressed an adverse opinion on the Company’s internal control over financial reporting because of a material weakness identified.
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We believe that this mission, along with our engineering expertise, vertically integrated business model, and our focus on continuous investment in our research and development and operations, differentiates us from competitors and positions us for long-term revenue and income growth. We employ a vertically integrated approach, which we believe provides a competitive advantage in optimizing performance and cost.
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Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits.
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Our proprietary technology stack spans the entire battery system, including core cell materials (cathode, anode, electrolyte, and separator), cells, modules, packs, thermal management systems, and intelligent battery management systems. This end-to-end expertise has driven critical advancements in ultra-fast charging, high energy density, long cycle life, and safety, all critical factors for commercial transportation and ESS applications.
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We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB.
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With significant in-house capabilities in design, testing, and R&D, we continue to build an industry-leading body of knowledge in battery chemistry and performance. Our Strategy Our objective is to drive long-term stakeholder value by scaling our proprietary battery technologies across high-growth sectors.
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Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
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Since 2008, our research and development efforts have been dedicated to pioneering cutting-edge battery technologies that offer ultra-fast charging, extended cycle life, high energy density, and enhanced safety. Our commitment to innovation has well positioned us developing the next-generation lithium-ion batteries. We are focused on designing battery technologies for electric commercial vehicles and ESS.
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Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
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Our solutions empower industries to transition to cleaner, more efficient power sources, unlocking new levels of performance, longevity, and cost efficiency. Historically, demand for electric commercial vehicle batteries was concentrated in the Asia & Pacific regions. We are now working towards a balanced global strategy throughout EMEA and North America.
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Critical Audit Matters The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
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As customer demand for our products and services has grown in Europe and the U.S., we have expanded to meet these growth opportunities. We continue to invest in our operations in Asia-Pacific to capitalize on regional growth. This provides a balanced global strategy while maintaining strong partnerships with OEMs in high-demand markets.
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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
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We have primarily supplied our battery solutions to OEMs for use in electric commercial and specialty vehicles. We are continuously advancing our battery technologies to improve performance, efficiency, and reliability in commercial applications. We believe the energy storage industry is positioned for continued expansion.
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Going concern – refer to Note 2 of the Financial Statements Critical Audit Matter Description As discussed in Note 2 to the financial statements, there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern.
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In 2025, third-party industry data shows that global power capacity grew by approximately 90 gigawatts, an estimated 23% increase from the previous year. Industry projections indicate expected further expansion, with an average CAGR in deployed gigawatts of 23% between 2025 and 2035.
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Management's plans including generation of cash inflows from operations and refinancing of short-term bank borrowings in the next twelve months since the date of issuance of the financial statements to alleviate the substantial doubt are also described in Note 2.
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The U.S. and China are expected to lead this growth, with U.S. power capacity projected to increase from approximately 45 gigawatts in 2025 to approximately 125 gigawatts by 2030.
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We identified the evaluation of the Company's assessment of its ability to continue as a going concern as a critical audit matter because a high degree of auditor judgment was required to evaluate the reasonableness of management’s estimates and assumptions related to the Company’s cash flow forecast used in its going concern analysis.
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By refining our technology, we aim to advance our ESS solutions to meet the evolving demand of power sector and complement existing resources in meeting growing global demand for reliable and flexible power. We are leveraging many of the component-level technologies from our commercial vehicle segment to develop our energy storage products.
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F-2 Table of Contents How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the Company’s going concern included the following, among others: • We tested the effectiveness of internal controls over the Company's going concern assessment and forecasted cash flows. • We performed a retrospective review to compare the Company's historical forecasted cash flows to actual results to assess the Company's ability to accurately forecast. • We assessed the reasonableness of the underlying data and assumptions included in management's forecasted cash flows. • We performed sensitivity analyses to assess the impact of changes in the key assumptions such as revenue growth rate and gross margin ratio. • We inspected the terms of loan agreements to determine whether any covenants have been breached and whether the repayment within the next twelve months are properly included in the forecast. • We evaluated the reasonableness of the Company’s assessment that the management plans are probable to alleviate the substantial doubt. • We reviewed subsequent events to identify those that represent additional conditions and events to be considered in aggregate and whether any contradictory evidence exists.
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Our Products and Services We believe the commercial vehicle market represents a continued growth opportunity. Our technology is currently deployed across a wide variety of platforms, including buses, heavy-duty trucks, port equipment, and heavy mining equipment. We have supported the deployment of the IVECO eDaily and various bus platforms (Citybus, Intercity, and Crossway).
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Impairment of Long-lived assets – refer to Note 2 and Note 6 of the Financial Statements.
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We also maintain active collaborations with leading OEMs including BAIC Truck, Higer Bus, and JBM Electric Vehicles. In the port and mining sectors, we have supplied Kalmar Corp., XCMG, and LGMG. 1 Table of Contents In November 5, 2025 we announced a partnership with Škoda Group to develop “Made in Europe” battery systems.
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Critical Audit Matter Description As discussed in Note 2 and 6 to the financial statements, during the year ended December 31, 2024, the Company paused the construction of the battery plant in Clarksville, Tennessee, the United States, until additional funding for the remaining capital expenditure is secured.
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The current solution under development utilizes Microvast's 37Ah LTO cell platform. This platform provides an energy density of approximately 95 Wh/kg at the cell level and is designed for high-rate charge and discharge capability. Under defined test conditions, the cell platform has demonstrated cycle life durability exceeding 20,000 cycles with approximately 80% capacity retention.
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As of December 31, 2024, the Company’s net value of the building and auxiliary equipment in Clarksville (“Clarksville Property”) is approximately $140 million. The Company assessed and concluded that the undiscounted cash flows indicate that the carrying value of Clarksville Property will not be recoverable.
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The LTO chemistry is recognized for its rapid charge acceptance, long cycle life characteristics, and strong thermal stability, making it suitable for heavy-duty and high-cycle rail applications. The first prototype vehicles integrating the jointly developed battery electric multiple units are expected to be completed by the end of 2026 and are anticipated to be deployed starting in 2027.
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As a result, the Company utilized the residual method to estimate its fair value, with the assistance of an independent valuer. The Company recognized $57 million impairment of the Clarksville Property equaling the excess of the Clarksville Property’s carrying amount over its estimated fair value for the year ended December 31, 2024.
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We provide service and repairs to our customers, including under warranty where applicable. We generally provide manufacturer's limited warranties with our products and offer certain extended limited warranties that are available at the time of product purchase.
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Auditing the Company's impairment assessment was complex due to the significant estimation and judgement required to evaluate the market and economic conditions as well as the degree of subjectivity involved in determining the indicative market value of the asset group. The Company developed its significant assumptions such as gross development value, indirect cost, development profit.
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Battery Solutions for Electric Commercial Vehicles We design, develop, and manufacture high-performance battery solutions for light, medium, and heavy-duty trucks, buses, trains, mining trucks, marine and port vehicles, automated guided vehicles, and specialty vehicles. Our advanced lithium-ion battery systems integrate ultra-fast charging, high energy density, improved cycle life, and industry-exceeding safety standards.
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How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the impairment of property, plant and equipment included the following, among others: • We tested the effectiveness of the key controls over the impairment assessment of this property, plant and equipment. • We evaluated the independent valuer’s objectivity, competence and capabilities. • With the involvement of our fair value specialists, we performed the following: i.
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Our battery technology can achieve rapid charging from 10% to 80% in just 10 to 30 minutes under suitable conditions, significantly reducing vehicle downtime. This ultra-fast charging capability is critical for industries requiring continuous fleet operation, such as logistics, ports, warehouses, and mass transit systems, where substantial downtime is not an option.
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Assessed the appropriateness of the valuation methodology and significant assumptions, such as gross development value, indirect cost, development profit. ii. Tested the accuracy of mathematical calculation. • We assessed the reasonableness of the underlying data used by the Company such as remaining capital expenditure to complete the construction.
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Microvast batteries are engineered to align with the operational lifespan of commercial vehicles. They are designed for high durability and longevity, with performance validated for extended service life in the field. Our advanced cell chemistry and proprietary thermal management system can allow for a longer product lifespan than many other competing products.
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F-3 Table of Contents /s/ Deloitte Touche Tohmatsu Certified Public Accountants LLP Beijing, the People’s Republic of China March 31, 2025 We have served as the Company’s auditor since 2011. F-4 Table of Contents MICROVAST HOLDINGS, INC.
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The extended cycle life of Microvast battery solutions, as compared to our competitors, can translate into lower long-term costs for fleet operators, reducing the frequency of battery replacements and minimizing total system expenditures. This advantage can be particularly significant in applications where high energy throughput and continuous operation are required, such as public transportation, heavy-duty trucking, and port electrification.
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CONSOLIDATED BALANCE SHEETS (In thousands of U.S. dollars, except share and per share data, or as otherwise noted) December 31, 2024 December 31, 2023 Assets Current assets: Cash and cash equivalents $ 73,007 $ 44,541 Restricted cash, current 36,572 37,477 Short-term investments — 5,634 Accounts receivable (net of allowance for credit losses of $5,090 and $4,571 as of December 31, 2024 and 2023, respectively) 120,626 138,717 Notes receivable 7,579 23,736 Inventories, net 143,327 149,749 Prepaid expenses and other current assets 27,019 25,752 Assets held for sale 19,896 — Total Current Assets 428,026 425,606 Restricted cash, non-current 22 6,171 Property, plant and equipment, net 478,189 620,667 Land use rights, net 11,371 11,984 Acquired intangible assets, net 2,607 3,136 Operating lease right-of-use assets 17,628 19,507 Other non-current assets 14,024 9,661 Total Assets $ 951,867 $ 1,096,732 Liabilities Current liabilities: Accounts payable $ 64,940 $ 112,618 Notes payable 51,756 63,374 Accrued expenses and other current liabilities 98,456 148,284 Advance from customers 43,678 43,087 Amounts due to related parties 5 — Short-term bank borrowings 70,666 35,392 Income tax payables 652 655 Total Current Liabilities 330,153 403,410 Long-term bank borrowings 41,062 43,761 Long-term bonds payable 43,157 43,157 Warrant liability 290 67 Share-based compensation liability 98 199 Convertible loan with shareholder measured at fair value 104,613 — Operating lease liabilities 14,596 17,087 Other non-current liabilities 30,003 24,861 Total Liabilities $ 563,972 $ 532,542 Commitments and contingencies (Note 28) Shareholders’ Equity F-5 Table of Contents MICROVAST HOLDINGS, INC.
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For commercial EV customers, total cost of ownership ( “ TCO ” ) is an important criterion.
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CONSOLIDATED BALANCE SHEETS - continued (In thousands of U.S. dollars, except share and per share data, or as otherwise noted) December 31, 2024 December 31, 2023 Common Stock (par value of US$0.0001 per share, 750,000,000 shares authorized as of December 31, 2024 and 2023; 324,831,634 and 316,694,442 shares issued, and 323,144,134 and 315,006,942 shares outstanding as of December 31, 2024 and 2023) $ 33 $ 32 Additional paid-in capital 1,512,982 1,481,241 Statutory reserves 6,032 6,032 Accumulated deficit (1,092,958) (897,501) Accumulated other comprehensive loss (38,194) (25,614) Total Equity $ 387,895 $ 564,190 Total Liabilities and Equity $ 951,867 $ 1,096,732 The accompanying notes are an integral part of these consolidated financial statements.
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To remain competitive, Microvast is committed to: • Investing in R&D to continuously improve battery technology and lower costs. • Developing new battery cells and modules with higher energy densities to enhance efficiency. • Integrating advanced materials and next-generation designs to optimize performance, durability, and cost-effectiveness. • Strengthening our focus on material innovation, so that improvements in base components translate to benefits across all battery solutions.
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CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands of U.S. dollars, except share and per share data, or as otherwise noted) Year Ended December 31, 2024 2023 2022 Revenues $ 379,801 $ 306,617 $ 204,495 Cost of revenues (260,249) (249,390) (195,422) Gross profit 119,552 57,227 9,073 Operating expenses: General and administrative expenses (81,486) (96,787) (102,774) Research and development expenses (41,065) (45,004) (43,508) Selling and marketing expenses (22,576) (23,614) (22,611) Impairment loss of long-lived assets (93,173) (504) (1,798) Total operating expenses (238,300) (165,909) (170,691) Subsidy income 2,658 1,953 1,672 Loss from operations (116,090) (106,729) (159,946) Other income and expenses: Interest income 742 3,609 3,179 Interest expense (9,711) (2,628) (3,323) Changes in fair value of warrant liability and convertible loan (79,960) 59 979 Gain on debt restructuring 9,406 — — Other income (expense), net 156 (713) 944 Loss before provision for income tax (195,457) (106,402) (158,167) Income tax expense — (10) (33) Net loss $ (195,457) $ (106,412) $ (158,200) Less: Net loss attributable to noncontrolling interest — (76) — Net loss attributable to Microvast Holdings, Inc. $ (195,457) $ (106,336) $ (158,200) Net loss per share attributable to common stock shareholders of Microvast Holdings, Inc.
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Fleet operators prioritize total cost of ownership metrics when evaluating battery solutions as an alternative to internal combustion engines (“ICE”). Our combination of ultra-fast charging, extended cycle life, and high energy density can provide a significant TCO advantage compared to traditional batteries.
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Basic and diluted $ (0.61) $ (0.34) $ (0.52) Weighted average shares used in calculating net loss per share of common stock: Basic and diluted 318,462,843 310,909,379 303,279,188 The accompanying notes are an integral part of these consolidated financial statements. F-7 Table of Contents MICROVAST HOLDINGS, INC.
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By reducing charging downtime, replacement cycles, and overall maintenance costs, Microvast batteries can enable fleet operators to achieve a lower cost per mile compared to both ICE vehicles and traditional lithium-ion battery solutions. This operational advantage positions Microvast battery systems as a strategic long-term investment for commercial fleets transitioning to electrification.
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In thousands of U.S. dollars, except share and per share data, or as otherwise noted) Year Ended December 31, 2024 2023 2022 Net loss $ (195,457) $ (106,412) $ (158,200) Foreign currency translation adjustment (12,580) (7,621) (24,782) Comprehensive loss $ (208,037) $ (114,033) $ (182,982) Comprehensive loss attributable to noncontrolling interests — (164) — Total comprehensive loss attributable to Microvast Holdings, Inc. $ (208,037) $ (113,869) $ (182,982) The accompanying notes are an integral part of these consolidated financial statements.
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We internally develop our own BMS technology to control, design, optimize battery performance, improve safety, and enhance longevity. The latest BMS 5.0 platform meets ISO 26262 functional safety and ISO 21434 cybersecurity standards, integrating digital twin technology to better optimize the batteries for real-time monitoring and predictive diagnostics.
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F-8 Table of Contents MICROVAST HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (In thousands of U.S. dollars, except share and per share data, or otherwise noted) Year Ended December 31, 2024 Common Stock Additional paid-in capital Accumulated deficit Accumulated other Comprehensive (loss) /income Statutory reserves Total Microvast Holdings, Inc.
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Our BMS technology enhances operational efficiency by: 2 Table of Contents • Optimizing battery performance through advanced cell balancing algorithms • Identifying and addressing safety risks, including thermal runaway detection and mitigation • Providing predictive analytics to extend battery cycle life and minimize unplanned downtime Energy Storage Systems We believe energy storage is now a critical component of grid infrastructure.
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Shareholders’ Equity Shares Amount Balance as of December 31, 2023 315,006,942 $ 32 $ 1,481,241 $ (897,501) $ (25,614) $ 6,032 $ 564,190 Net loss — — — (195,457) — — (195,457) Issuance of common stock in connection with vesting of share-based awards 8,137,192 1 (1) — — — — Share-based compensation(Note 21) — — 30,963 — — — 30,963 Issuance of warrants(Note 26) — — 779 — — — 779 Foreign currency translation adjustments — — — — (12,580) — (12,580) Balance as of December 31, 2024 323,144,134 $ 33 $ 1,512,982 $ (1,092,958) $ (38,194) $ 6,032 $ 387,895 The accompanying notes are an integral part of these consolidated financial statements.
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This demand is accelerated by rising electricity consumption from AI, high-performance computing, and data center expansion. To meet this need, we are leveraging our core advancements in performance and reliability to provide capacity support and grid resiliency. We believe the market is positioned for meaningful expansion over the next decade.
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F-9 Table of Contents MICROVAST HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY - Continued (In thousands of U.S. dollars, except share and per share data, or otherwise noted) Year Ended December 31, 2023 Common Stock Additional paid-in capital Accumulated deficit Accumulated other comprehensive income/(loss) Statutory reserve Total Microvast Holdings, Inc.
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Governmental policies, subsidies, and incentives in certain countries are further supporting the development and deployment of energy storage solutions. Battery Components As a vertically integrated battery company, Microvast develops and owns proprietary intellectual property and know-how relating to the design, development, and manufacture of the four critical components of lithium-ion batteries: cathode, anode, electrolyte, and separator.
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Shareholders’ Equity Noncontrolling Interests Total Equity Shares Amount Balance as of December 31, 2022 307,628,511 $ 31 $ 1,416,160 $ (791,165) $ (18,081) $ 6,032 $ 612,977 $ — $ 612,977 Net loss — — — (106,336) — — (106,336) (76) (106,412) Capital contribution from noncontrolling interests — — — — — — — 2,174 2,174 Reduction of noncontrolling interest — — (164) — — — (164) (2,010) (2,174) Issuance of common stock in connection with vesting of share-based awards 7,378,431 1 (1) — — — — — — Share-based compensation(Note 21) — — 65,246 — — — 65,246 — 65,246 Foreign currency translation adjustments — — — — (7,533) — (7,533) (88) (7,621) Balance as of December 31, 2023 315,006,942 $ 32 $ 1,481,241 $ (897,501) $ (25,614) $ 6,032 $ 564,190 $ — $ 564,190 The accompanying notes are an integral part of these consolidated financial statements.
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This vertical integration allows us to use these components in our products and market the individual components to other manufacturers. Our Technologies Our latest innovations in cathode and separator technology represent major advancements in battery performance and safety.
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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY - Continued (In thousands of U.S. dollars, except share and per share data, or as otherwise noted) Year Ended December 31, 2022 Common Stock Additional paid-in capital Accumulated deficit Accumulated other comprehensive income Statutory reserve Total Microvast Holdings, Inc. shareholders’ Equity Shares Amount Balance as of December 31, 2021 298,843,016 $ 30 $ 1,306,034 $ (632,099) $ 6,701 $ 6,032 $ 686,698 Net loss — — — (158,200) — — (158,200) Cumulative effect adjustment related to opening retained earnings for adoption of ASU2016-13 , Financial instruments- Credit losses (Topic 326) — — — (866) — — (866) Issuance of common stock in connection with vesting of share-based awards 8,785,495 1 (1) — — — — Share-based compensation(Note 21) — — 110,127 — — — 110,127 Foreign currency translation adjustments — — — — (24,782) — (24,782) Balance as of December 31, 2022 307,628,511 $ 31 $ 1,416,160 $ (791,165) $ (18,081) $ 6,032 $ 612,977 The accompanying notes are an integral part of these consolidated financial statements.
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We believe that our FCG cathode and polyaramid separator technologies are industry-leading innovations that provide higher energy density, enhanced safety, and longer battery cycle life compared to conventional materials.
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CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands of U.S. dollars, except share and per share data, or as otherwise noted) Year Ended December 31, 2024 2023 2022 Cash flows from operating activities Net loss $ (195,457) $ (106,412) $ (158,200) Adjustments to reconcile net loss to net cash used in operating activities: Loss /(gain) on disposal of property, plant and equipment 844 1,947 (14) Gain on debt restructuring (9,406) — — Interest expense 2,248 — — Depreciation of property, plant and equipment 30,057 22,141 19,811 Amortization of land use rights and intangible assets 775 787 554 Noncash lease expenses 2,686 2,764 2,214 Share-based compensation 30,840 64,971 90,808 Changes in fair value of warrant liability and convertible loan 79,960 (59) (979) Allowance of credit losses 3,743 236 1,640 Write-down for obsolete inventories 3,286 3,613 4,789 Impairment loss from long-lived assets 93,173 504 1,798 Product warranty 12,826 12,688 14,097 Changes in operating assets and liabilities: Notes receivable 6,488 (25,338) 3,187 Accounts receivable 8,791 (21,759) (38,924) Inventories (546) (74,406) (43,694) Prepaid expenses and other current assets 3,289 (14,291) 3,628 Amounts due from/to related parties 5 — 85 Operating lease right-of-use assets (1,780) (5,446) (19,375) Other non-current assets (973) (547) (282) Notes payable (9,911) (3,507) 13,490 Accounts payable (44,523) 68,576 7,146 Advance from customers 836 (10,949) 53,022 Accrued expenses and other liabilities (16,486) 6,602 (24,674) Operating lease liabilities (1,607) 2,266 14,999 Other non-current liabilities 3,656 316 946 Net cash generated from (used in) operating activities 2,814 (75,303) (53,928) Cash flows from investing activities Purchases of property, plant and equipment (27,721) (186,788) (150,880) Proceeds on disposal of property, plant and equipment 10,005 1,649 5 Purchase of short-term investments — (5,966) (25,070) Proceeds from maturity of short-term investments 5,564 25,500 — Net cash used in investing activities (12,152) (165,605) (175,945) Cash flows from financing activities Proceeds from bank borrowings 101,517 47,852 58,708 F-12 Table of Contents MICROVAST HOLDINGS, INC.
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Below are key highlights from our technology portfolio: Battery Cell Materials • Polyaramid Separator: Our proprietary polyaramid separator is designed for safety and durability, offering improved thermal stability and mechanical strength compared to traditional polyethylene or polypropylene separators.
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CONSOLIDATED STATEMENTS OF CASH FLOWS - continued (In thousands of U.S. dollars, except share and per share data, or as otherwise noted) Year Ended December 31, 2024 2023 2022 Repayment of bonds payable — (692) (29,259) Repayment of bank borrowings (66,248) (14,119) (24,482) Convertible loan borrowed from a shareholder 25,000 — — Payment for debt issue costs (525) — — Deferred payment related to purchases of property, plant and equipment (22,155) — — Net cash generated from financing activities 37,589 33,041 4,967 Effect of exchange rate changes (6,839) (6,561) (8,586) Increase/ (decrease) in cash, cash equivalents and restricted cash 21,412 (214,428) (233,492) Cash, cash equivalents and restricted cash at beginning of the year 88,189 302,617 536,109 Cash, cash equivalents and restricted cash at end of the year $ 109,601 $ 88,189 $ 302,617 Reconciliation to amounts on consolidated balance sheets Cash and cash equivalents $ 73,007 $ 44,541 $ 231,420 Restricted cash 36,594 43,648 71,197 Total cash, cash equivalents and restricted cash $ 109,601 $ 88,189 $ 302,617 Supplemental disclosure of cash flow information Interest paid $ 7,440 $ 4,373 $ 5,135 Income tax paid $ — $ — $ — Non-cash investing and financing activities Payable for purchase of property, plant and equipment $ 45,983 $ 96,350 $ 29,183 The accompanying notes are an integral part of these consolidated financial statements.
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Made from polyaramid, the same high-performance material used in bulletproof vests, it provides exceptional chemical, electrochemical, and thermal resistance, and is intended to provide long-term reliability. Unlike conventional separators that can melt around 138°C (280°F), our polyaramid separator maintains its structural integrity at temperatures up to 300°C (572°F), significantly enhancing battery safety.
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F-13 Table of Contents MICROVAST HOLDINGS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022 (In thousands of U.S. dollars, except share and per share data, or as otherwise noted) 1.
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Additionally, it is intrinsically highly flame resistant, reducing the risk of thermal runaway, a critical factor in improving lithium-ion battery performance and reliability. • Lithium Titanate Oxide (“LTO”) Powder: Our LTO powder enhances high-power operation, making it ideal for ultra-fast charging applications.
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DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Microvast, Inc. was incorporated under the laws of the State of Texas in the United States of America on October 12, 2006 and re-domiciled to the State of Delaware on December 31, 2015.
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Unlike traditional anode materials, LTO is inherently stable with conventional lithium-ion electrolytes, which can offer improved safety and longevity when compared to traditional graphite anodes. • Full Concentration Gradient (“FCG”) Cathode: Licensed from Argonne National Laboratory in 2017, our FCG cathode technology is now produced with flexible and cost-effective manufacturing techniques, significantly improving affordability compared to standard NMC materials.
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Pursuant to the Merger Agreement, the Merger Sub merged with and into Microvast, Inc., with Microvast, Inc. surviving the Merger. As a result of the Merger, Tuscan was renamed “Microvast Holdings, Inc.” (the “Company”).
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We have found that by controlling the concentration of metals within each particle, we enhance battery safety and performance. Additionally, the cobalt content is reduced to less than 2% by weight, significantly lowering material costs while addressing the environmental and ethical concerns associated with cobalt mining.
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The Merger was accounted for as a reverse recapitalization as Microvast, Inc. was determined to be the accounting acquirer under Financial Accounting Standards Board’s Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”). As of December 31, 2024, details of the Company’s major subsidiaries are as follows: Subsidiaries Place of incorporation Date of incorporation Percentage of ownership Microvast, Inc.
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This versatile cathode can be customized for specific end-use applications, making it well-suited for ultra-fast charging and cost-efficient advanced lithium-ion cells. Additionally, this technology is especially well suited going forward for the development of materials that significantly reduce or eliminate cobalt. • Electrolyte Formulation: Our proprietary electrolyte formulation can significantly reduce the risk of lithium-ion cell fires.
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(“ Microvast ”) Delaware, USA October 2006 100 % Microvast Power Solutions, Inc (“ MP Solutions ”) Texas, USA July 2013 100 % Microvast Power Systems Co., Ltd. (“ MPS ”) Huzhou, PRC December 2006 100 % Microvast GmbH (“ MV GmbH ”) Germany May 2016 100 % Huzhou Hongwei New Energy Automobile Co., Ltd.
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Reducing the flammability of lithium-ion cells is an important safety feature that we believe will become more valued as the industry shifts toward higher energy density batteries. Cell Chemistries • Lithium Titanate Oxide: LTO replaces traditional graphite anodes, which can significantly enhance safety and fast-charging capabilities while supporting a longer cycle life.
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(“ Hongwei ”) Huzhou, PRC December 2016 100 % Microvast Energy, Inc. (“ MV Energy ”) Colorado, USA July 2022 100 % The Company and its subsidiaries (collectively, the “Group”) are primarily engaged in developing, manufacturing, and selling lithium-ion battery technologies for use in commercial electric vehicles and battery energy storage systems across the globe. 2.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisk Factors Summary Below is a summary of material factors that make an investment in our common stock speculative or risky: Risks Related to Being a Public Company • The restatement of our previously issued quarterly financial statements has subjected us to additional costs, risks and uncertainty and may also affect investor confidence and harm our reputation. • We have identified material weaknesses in our internal control over financial reporting and, if we fail to remediate these material weaknesses in a timely manner or at all, we may not be able to comply with our financial reporting obligations, which could expose us to additional legal and business risks and uncertainties. • If we are unable to design and maintain proper and effective internal control over financial reporting in the future, or our internal control over financial reporting is determined by us or our auditors to not be operating effectively, we may be exposed to additional risks and investor confidence in us and the value of our common stock could be adversely affected.
Biggest changeRisk Factors Summary Below is a summary of material factors that make an investment in our common stock speculative or risky: Risks Related to Being a Public Company • The restatement of our previously issued quarterly financial statements has subjected us to additional costs, risks and uncertainty and may also affect investor confidence and harm our reputation. • If we are unable to design and maintain proper and effective internal control over financial reporting in the future, or our internal control over financial reporting is determined by us or our auditors to not be operating effectively, we may be exposed to additional risks and investor confidence in us and the value of our common stock could be adversely affected. • Effective December 31, 2025, we no longer qualify as a "smaller reporting company" and, commencing with our Quarterly Report on Form 10-Q for the fiscal quarter ending March 31, 2026, we may no longer take advantage of reduced disclosure and reporting requirements applicable to smaller reporting companies.
Should a viable alternative to lithium-based batteries emerge and gain market acceptance, it could significantly harm our business, financial health, and operational results.
Should a viable alternative to lithium-based batteries emerge and gain market acceptance, it could significantly harm our business, financial health, and operational results.
The uncertain nature, magnitude, and duration of hostilities stemming from the conflicts between Russia and Ukraine and in the Middle East, including the potential effects of sanctions limitations, possibility of counter-sanctions, retaliatory cyber-attacks on the world economy and markets, further disruptions to global supply chains and potential shipping delays, have contributed to increased market volatility and uncertainty, which could have an adverse impact on macroeconomic factors that affect our business.
The uncertain nature, magnitude, and duration of hostilities stemming from the hostilities in the Middle East and conflicts between Russia and Ukraine, including the potential effects of sanctions limitations, possibility of counter-sanctions, retaliatory cyber-attacks on the world economy and markets, further disruptions to global supply chains and potential shipping delays, have contributed to increased market volatility and uncertainty, which could have an adverse impact on macroeconomic factors that affect our business.
These risks include: • localization of the marketing and deployment of our products; • lack of familiarity with, and burdens of, complying with foreign laws, legal and commercial standards, regulatory requirements, export requirements, tariffs and other barriers, including laws related to employment or labor; • conforming our products to various international regulatory and safety requirements where our products are sold, or homologation; • difficulty in establishing, staffing and managing foreign operations; • difficulties attracting customers in new jurisdictions; • difficulty in engaging and retaining distributors that are knowledgeable about, and can function effectively, in overseas markets; • management, communication and integration problems resulting from cultural or language differences and geographic dispersion; • different pricing environments, longer sales cycles and longer accounts receivable payment cycles and collections issues; • increased costs associated with maintaining marketing efforts in various countries; • new and different sources of competition; • increased financial accounting and reporting burdens and complexities; • diversion of our management’s attention and resources to explore, negotiate, or close acquisitions and to integrate, staff and manage geographically remote operations and employees; • sufficiency of qualified labor pools in various international markets; • foreign government taxes, currency controls, regulations and permit requirements, including foreign taxes that we may not be able to offset against taxes imposed upon us in the U.S., and foreign tax and other laws limiting our ability to repatriate funds to the U.S.; • changes in global currency systems or fluctuations in exchange rates that may increase the volatility of or adversely affect our foreign-based revenue; • our ability to enforce our contractual rights; • compliance with anti-corruption laws, economic sanction laws and regulations, anti-tax laws, export controls and other laws and regulations regarding international business operations; • foreign government trade restrictions, customs regulations, tariffs and price or exchange controls; • preferences of foreign nations for domestically produced products; • uncertain political and economic climates; and • inability to obtain, maintain or enforce intellectual property rights in some countries.
These risks include: • localization of the marketing and deployment of our products; • lack of familiarity with, and burdens of, complying with foreign laws, legal and commercial standards, regulatory requirements, export requirements, tariffs and other barriers, including laws related to employment or labor; 27 Table of Contents • conforming our products to various international regulatory and safety requirements where our products are sold, or homologation; • difficulty in establishing, staffing and managing foreign operations; • difficulties attracting customers in new jurisdictions; • difficulty in engaging and retaining distributors that are knowledgeable about, and can function effectively, in overseas markets; • management, communication and integration problems resulting from cultural or language differences and geographic dispersion; • different pricing environments, longer sales cycles and longer accounts receivable payment cycles and collections issues; • increased costs associated with maintaining marketing efforts in various countries; • new and different sources of competition; • increased financial accounting and reporting burdens and complexities; • diversion of our management’s attention and resources to explore, negotiate, or close acquisitions and to integrate, staff and manage geographically remote operations and employees; • sufficiency of qualified labor pools in various international markets; • foreign government taxes, currency controls, regulations and permit requirements, including foreign taxes that we may not be able to offset against taxes imposed upon us in the U.S., and foreign tax and other laws limiting our ability to repatriate funds to the U.S.; • changes in global currency systems or fluctuations in exchange rates that may increase the volatility of or adversely affect our foreign-based revenue; • our ability to enforce our contractual rights; • compliance with anti-corruption laws, economic sanction laws and regulations, anti-tax laws, export controls and other laws and regulations regarding international business operations; • foreign government trade restrictions, customs regulations, tariffs and price or exchange controls; • preferences of foreign nations for domestically produced products; • uncertain political and economic climates; and • inability to obtain, maintain or enforce intellectual property rights in some countries.
Other factors may influence the adoption of electric vehicles, including, but not limited to: • perceptions about electric vehicle quality, design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of electric vehicles; • perceptions about electric vehicle quality, safety (in particular with respect to lithium-ion battery packs), design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of electric vehicles; • volatility in sales of electric vehicles; • perceptions about vehicle safety in general, in particular safety issues that may be attributed to the use of advanced technology, including vehicle electronics and regenerative braking systems; • negative perceptions of electric vehicles, such as that they are more expensive than non-electric vehicles and are only affordable with government subsidies or that they have failed to meet customer expectations; • the limited range over which electric vehicles may be driven on a single battery charge and the effects of weather on this range; • the decline of an electric vehicle’s range resulting from deterioration over time in the battery’s ability to hold a charge; • concerns about electric charging infrastructure availability and reliability, which could derail past and present efforts to promote electric vehicles as a practical solution to vehicles which require gasoline; • concerns about charging station standardizations, convenience and cost influencing consumers’ perceptions regarding the convenience of electric vehicle charging stations; • concerns of potential customers about the susceptibility of battery packs to damage from improper charging, as well as the lifespan of battery packs and the cost of their replacement; • concerns regarding comprehensive insurance coverage related to electric vehicles; • developments in alternative technologies, such as advanced diesel, ethanol, fuel cells or compressed natural gas, or improvements in the fuel economy of the internal combustion engine, which could adversely affect sales of electric vehicles; • the environmental consciousness of consumers; • the availability and volatility in the cost of natural gas, diesel, coal, oil, gasoline and other fuels relative to electricity; • the availability of tax and other government incentives to purchase and operate electric vehicles or future regulation requiring increased use of nonpolluting vehicles; • concerns regarding the value and costs for upkeep of electric vehicles in the used car market; • the availability of enough skilled labor in after-sale services; and 18 Table of Contents • macroeconomic factors.
Other factors may influence the adoption of electric vehicles, including, but not limited to: • perceptions about electric vehicle quality, design, performance, and cost, especially if adverse events or accidents occur that are linked to the quality or safety of electric vehicles; • perceptions about electric vehicle quality, safety (in particular with respect to lithium-ion battery packs), design, performance, and cost, especially if adverse events or accidents occur that are linked to the quality or safety of electric vehicles; • volatility in sales of electric vehicles; • perceptions about vehicle safety in general, in particular safety issues that may be attributed to the use of advanced technology, including vehicle electronics, and regenerative braking systems; • negative perceptions of electric vehicles, such as that they are more expensive than non-electric vehicles and are only affordable with government subsidies or that they have failed to meet customer expectations; • the limited range over which electric vehicles may be driven on a single battery charge and the effects of weather on this range; • the decline of an electric vehicle’s range resulting from deterioration over time in the battery’s ability to hold a charge; • concerns about electric charging infrastructure availability and reliability, which could derail past and present efforts to promote electric vehicles as a practical solution to vehicles which require gasoline; • concerns about charging station standardizations, convenience, and cost influencing consumers’ perceptions regarding the convenience of electric vehicle charging stations; • concerns of potential customers about the susceptibility of battery packs to damage from improper charging, as well as the lifespan of battery packs and the cost of their replacement; • concerns regarding comprehensive insurance coverage; • developments in alternative technologies, such as advanced diesel, ethanol, fuel cells, or compressed natural gas, or improvements in the fuel economy of the internal combustion engine, which could adversely affect sales of electric vehicles; • the environmental consciousness of consumers; • the availability and volatility in the cost of natural gas, diesel, coal, oil, gasoline, and other fuels relative to electricity; 17 Table of Contents • the availability of tax and other government incentives to purchase and operate electric vehicles or future regulation requiring increased use of nonpolluting vehicles; • concerns regarding the value and costs for upkeep of electric vehicles in the used car market; • the availability of enough skilled labor in after-sale services; and • macroeconomic factors.
This volatility of our common stock may be due to a number of factors such as those listed in “ —Risks Related to our Business and Industry ” and “—Risks Related to doing Business in China” and the following: • our operating and financial performance and prospects; • our quarterly or annual earnings or those of other companies in our industry compared to market expectations; • conditions that impact demand for our products; • future announcements concerning our business, our product users’ businesses or our competitors’ businesses; • the public’s reaction to our press releases, other public announcements and filings with the SEC; • the size of our public float; • coverage by or changes in financial estimates by securities analysts or failure to meet their expectations; • the issuance of short reports; • market and industry perception of our success, or lack thereof, in pursuing our growth strategy; • strategic actions by us or our competitors, such as acquisitions or restructurings; • changes in laws or regulations which adversely affect our industry or us; • changes in accounting standards, policies, guidance, interpretations or principles; • changes in senior management or key personnel; • issuances, exchanges or sales, or expected issuances, exchanges or sales of our capital stock; • changes in our dividend policy; • adverse resolution of new or pending litigation against us; • the impact of possible pandemics on our financial condition and the results of operations; • the ongoing conflicts between Russia and Ukraine and in the Middle East, and any restrictive actions that have been or may be taken by the U.S. and/or other countries in response thereto, such as economic, financial or trade sanctions or export controls; and • changes in general market, economic and political conditions in the U.S. and global economies or financial markets, including those resulting from natural disasters, terrorist attacks, acts of war and responses to such events.
This volatility of our common stock may be due to a number of factors such as those listed in “ —Risks Related to our Business and Industry ” and “—Risks Related to doing Business in China” and the following: • our operating and financial performance and prospects; • our quarterly or annual earnings or those of other companies in our industry compared to market expectations; • conditions that impact demand for our products; • future announcements concerning our business, our product users’ businesses or our competitors’ businesses; • the public’s reaction to our press releases, other public announcements and filings with the SEC; • the size of our public float; • coverage by or changes in financial estimates by securities analysts or failure to meet their expectations; • the issuance of short reports; • market and industry perception of our success, or lack thereof, in pursuing our growth strategy; • strategic actions by us or our competitors, such as acquisitions or restructurings; • changes in laws or regulations which adversely affect our industry or us; • changes in accounting standards, policies, guidance, interpretations or principles; • changes in senior management or key personnel; • issuances, exchanges or sales, or expected issuances, exchanges or sales of our capital stock; • changes in our dividend policy; • adverse resolution of new or pending litigation against us; • the impact of possible pandemics on our financial condition and the results of operations; • the ongoing conflicts in the Middle East, including hostilities with Iran, the war between Russia and Ukraine, and other current or future conflicts, and any restrictive actions that have been or may be taken by the U.S. and/or other countries in response thereto, such as economic, financial or trade sanctions or export controls; and • changes in general market, economic and political conditions in the U.S. and global economies or financial markets, including those resulting from natural disasters, terrorist attacks, acts of war and responses to such events.
These risks include, among other things, possible liability relating to product liability matters, securities law matters, personal injuries, intellectual property rights, contract-related claims, government contracts, health and safety liabilities, environmental matters and compliance with U.S. and foreign laws, competition laws and laws governing improper business practices.
These risks include, among other things, possible liability and legal compliance risks relating to product liability matters, securities law matters, personal injuries, intellectual property rights, contract-related claims, government contracts, health and safety liabilities, environmental matters and compliance with U.S. and foreign laws, competition laws and laws governing improper business practices.
We believe we are in material compliance with all current PRC and international regulations for the shipment of our products and will seek to comply with any new regulations that are imposed. We also believe we have obtained all required certificates for the safe transport of our lithium battery products by air and water.
We believe we are in material compliance with all current PRC and international regulations for the shipment of our products and will seek to comply with any new regulations that are imposed. We also believe we have obtained all required certificates for the safe transport of our lithium battery products by air, water, and land.
For example, in connection with the ongoing conflicts between Russia and Ukraine and in the Middle East, the U.S., the E.U. and certain other governments around the world have responded by imposing various economic sanctions which restrict or prohibit certain business opportunities in Russia, Ukraine and in the Middle East. These sanctions are complex and are rapidly evolving.
For example, in connection with the ongoing conflicts the U.S., the E.U. and certain other governments around the world have responded by imposing various economic sanctions which restrict or prohibit certain business opportunities in Russia, Ukraine and in the Middle East. These sanctions are complex and are rapidly evolving.
We or one of our business units could be charged with wrongdoing as a result of such matters. If convicted or found liable, we could be subject to significant fines, penalties, repayments or other damages (in certain cases, treble damages).
We or one of our business units could be charged with alleged wrongdoing as a result of such matters. If convicted or found liable, we could be subject to significant fines, penalties, repayments or other damages (in certain cases, treble damages).
The delisting of our securities, or the threat of their being delisted, may materially and adversely affect the value of your investment. • Changes in the policies of the PRC government, including more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers, could have a significant impact on the business we may be able to conduct in China, the profitability of our business and the value of our common stock. • We have become subject to the recent scrutiny, criticism and negative publicity involving U.S.-listed companies with significant operations in China, and we have and we may continue to expend significant resources to investigate and resolve the matter which could harm our business operations, stock price and reputation, especially if such matter cannot be addressed and resolved favorably. • Tariffs imposed on products of the PRC into the United States may lead to increased costs and impact our business.
The delisting of our securities, or the threat of their being delisted, may materially and adversely affect the value of your investment. • Changes in the policies of the PRC government, including more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers, could have a significant impact on the business we may be able to conduct in China, the profitability of our business and the value of our common stock. • We have become subject to the recent scrutiny, criticism and negative publicity involving U.S.-listed companies with significant operations in China, and we have and we may continue to expend significant resources to investigate and resolve the matter which could harm our business operations, stock price and reputation, especially if such matter cannot be addressed and resolved favorably. • Tariffs imposed on products of the PRC into the United States may lead to increased costs and impact our business. • Restrictions on the ability of U.S. companies to invest in the PRC may impact our business.
Accordingly, government actions in the future, including any decision not to continue to support economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof and could require us to divest ourselves of any interest we then hold in PRC properties or entities, including our PRC operating subsidiary, Microvast Power Systems, Ltd ("MPS").
Accordingly, government actions in the future, including any decision not to continue to support economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof and could require us to divest ourselves of any interest we then hold in PRC properties or entities, including our PRC operating subsidiary, Microvast Power Systems, Ltd (“MPS”).
We may not have adequate personnel with the appropriate level of knowledge, experience and training in the accounting policies, practices or internal controls over financial reporting required of public companies in the U.S. For example, on March 18, 2025, we filed a Form 12b-25 stating that we required additional time to complete this annual report on Form 10-K.
We may not have adequate personnel with the appropriate level of knowledge, experience and training in the accounting policies, practices or internal controls over financial reporting required of public companies in the U.S. For example, on March 18, 2025, we filed a Form 12b-25 stating that we required additional time to complete our annual report on Form 10-K.
We are currently in certain lawsuits with suppliers alleging that we failed to pay for the services performed or equipment or materials delivered. For more information on our pending legal proceedings, please see Note 28. Commitments and Contingencies, to the consolidated financial statements included elsewhere in this Annual Report.
We are currently in certain lawsuits with suppliers alleging that we failed to pay for the services performed or equipment or materials delivered. For more information on our pending legal proceedings, please see Note 27. Commitments and Contingencies, to the consolidated financial statements included elsewhere in this Annual Report.
These regulations are based on the United Nations, or UN, Recommendations on the Transport of Dangerous Goods Model Regulations and the UN Manual of Tests and Criteria. We currently ship our products pursuant to ICAO, IATA and PHMSA hazardous goods regulations. The regulations require companies to meet certain testing, packaging, labeling and shipping specifications for safety reasons.
These regulations are based on the United Nations (the “UN”), Recommendations on the Transport of Dangerous Goods Model Regulations and the UN Manual of Tests and Criteria. We currently ship our products pursuant to ICAO, IATA and PHMSA hazardous goods regulations. The regulations require companies to meet certain testing, packaging, labeling and shipping specifications for safety reasons.
While we obtain local, specialist third party tax advice on ensuring those transactions comply with local tax laws and regulations, there is always the risk that a tax authority will raise issue with these transactions and seek to impose a tax treatment that could be unfavourable to us, or may even seek to impose fines or penalties on us.
While we obtain local, specialist third party tax advice on ensuring those transactions comply with local tax laws and regulations, there is always the risk that a tax authority will raise issue with these transactions and seek to impose a tax treatment that could be unfavorable to us, or may even seek to impose fines or penalties on us.
If the PCAOB determines in the future that it no longer has full access to 42 Table of Contents inspect and investigate completely accounting firms in mainland China and Hong Kong and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 10-K for the relevant fiscal year.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 10-K for the relevant fiscal year.
As noted above and further disclosed in Part II, Item 9A, “Controls and Procedures” of this Annual Report, we identified material weakness in our internal control over financial reporting as of December 31, 2024, and as a result, our management concluded that our disclosure controls and procedures and internal control over financial reporting were not effective as of December 31, 2024.
As noted above and further disclosed in Part II, Item 9A, "Controls and Procedures" of this Annual Report, we identified a material weakness in our internal control over financial reporting as of December 31, 2024, and as a result, our management concluded that our disclosure controls and procedures and internal control over financial reporting were not effective as of December 31, 2024.
Our recent inability to timely pay certain contractors at our Clarksville, Tennessee facility has resulted in the filing of mechanics liens against the Clarksville facility project. The effect of mechanics liens is to secure a contractor's right to payment of past due amounts by using our real property as collateral for such amounts.
Our inability to timely pay certain contractors at our Clarksville, Tennessee facility resulted in the filing of mechanics liens against the Clarksville facility project. The effect of mechanics liens is to secure a contractor's right to payment of past due amounts by using our real property as collateral for such amounts.
Further, the loss of this DOE award had an adverse impact on our reputation and standing, and it may not be possible for us to mitigate these negative perceptions concerning us and our business and/or we may have to spend considerable management time and resources defending our reputation and standing.
Further, the withdraw of this DOE award had an adverse impact on our reputation and standing, and it may not be possible for us to mitigate these negative perceptions concerning us and our business and/or we may have to spend considerable management time and resources defending our reputation and standing.
Inaccurate demand predictions could lead to unmet customer needs, lost sales, or excess production, causing higher inventory, overcapacity, increased production costs and reduced operating margins. Additionally, the battery efficiency of electric vehicles declines over time. As such, vehicles using our battery systems will see performance decline as their batteries decay, particularly in the driving range.
Inaccurate 21 Table of Contents demand predictions could lead to unmet customer needs, lost sales, or excess production, causing higher inventory, overcapacity, increased production costs and reduced operating margins. Additionally, the battery efficiency of electric vehicles declines over time. As such, vehicles using our battery systems will see performance decline as their batteries decay, particularly in the driving range.
The resulting reductions in demand for energy storage products could harm our business, prospects, financial condition, and results of operations. A significant recent development in renewable-energy pricing policies in the U.S. occurred on July 16, 2020, when the Federal Energy Regulatory Commission (“FERC”) issued a final rule amending regulations that implement the Public Utility Regulatory Policies Act (“PURPA”).
The resulting reductions in demand for energy storage products could harm our business, prospects, financial condition, and results of operations. 30 Table of Contents A significant recent development in renewable-energy pricing policies in the U.S. occurred on July 16, 2020, when the Federal Energy Regulatory Commission (“FERC”) issued a final rule amending regulations that implement the Public Utility Regulatory Policies Act (“PURPA”).
Issued patents may be challenged, narrowed, invalidated or circumvented. Some countries’ legal systems do not strongly enforce patents, limiting our ability to protect our inventions as effectively as in the U.S. and Europe. For example, the validity, enforceability and scope of protection available under the relevant intellectual property laws in China 45 Table of Contents is uncertain and still evolving.
Issued patents may be challenged, narrowed, invalidated or circumvented. Some countries’ legal systems do not strongly enforce patents, limiting our ability to protect our inventions as effectively as in the U.S. and Europe. For example, the validity, enforceability and scope of protection available under the relevant intellectual property laws in China is uncertain and still evolving.
Moreover, many of our current and potential competitors may dedicate substantially greater resources than we can to the protection and enforcement of intellectual property rights, especially patents. Incurring significant expenses and distracting our personnel 46 Table of Contents for an intellectual property-related proceeding could have a material adverse effect on our business, financial condition, results of operations and prospects.
Moreover, many of our current and potential competitors may dedicate substantially greater resources than we can to the protection and enforcement of intellectual property rights, especially patents. Incurring significant expenses and distracting our personnel for an intellectual property-related proceeding could have a material adverse effect on our business, financial condition, results of operations and prospects.
As a result of these factors and other risks discussed in this section, year-over-year comparisons should not be relied upon to predict our future performance. ITEM 1B. UNRESOLVED STAFF COMMENTS Not applicable.
As a result of these factors and other risks discussed in this section, year-over-year comparisons should not be relied upon to predict our future performance. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Under Circular 43, both direct listing and indirect listing activities of China based enterprises will become subject to a unified filing requirement with the CSRC. We do not believe this Circular is applicable to Microvast and we believe the jurisdiction for how we conduct our offerings in the U.S. solely rests with the SEC.
Under Circular 43, both direct listing and indirect listing activities of China based enterprises will become subject to a unified filing requirement with the CSRC. We do not believe this Circular is applicable 44 Table of Contents to Microvast and we believe the jurisdiction for how we conduct our offerings in the U.S. solely rests with the SEC.
Artificial Intelligence presents risks and challenges that can impact our business, including by posing security risks to our confidential information, proprietary information and personal data. 38 Table of Contents Issues in the development and use of artificial intelligence, combined with an uncertain regulatory environment, may result in reputational harm, liability, or other adverse consequences to our business operations.
Artificial Intelligence presents risks and challenges that can impact our business, including by posing security risks to our confidential information, proprietary information and personal data. Issues in the development and use of artificial intelligence, combined with an uncertain regulatory environment, may result in reputational harm, liability, or other adverse consequences to our business operations.
Furthermore, failure to obtain a sufficient supply of these raw materials and components or produce them in-house at a reasonable cost could also harm our revenue and gross profit margins. 25 Table of Contents If rising prices or availability of raw materials continues to persist, our business and results of operations may be adversely affected.
Furthermore, failure to obtain a sufficient supply of these raw materials and components or produce them in-house at a reasonable cost could also harm our revenue and gross profit margins. If rising prices or availability of raw materials continues to persist, our business and results of operations may be adversely affected.
General Risk Factors • Our lengthy and variable sales cycle makes it difficult for us to accurately forecast our revenue and other operating results. As a result, we expect our results of the operation to fluctuate on a quarterly and annual basis, which could cause our stock price to fluctuate or decline.
General Risk Factors 13 Table of Contents • Our lengthy and variable sales cycle makes it difficult for us to accurately forecast our revenue and other operating results. As a result, we expect our results of the operation to fluctuate on a quarterly and annual basis, which could cause our stock price to fluctuate or decline.
Further, bad actors around the world use increasingly sophisticated methods, including the use of artificial intelligence, to engage in illegal activities involving the theft and misuse of personal information, confidential information, and intellectual property. Any of these outcomes could damage our reputation, result in the loss of valuable property and information, and adversely impact our business.
Further, bad actors around the world use increasingly sophisticated methods, including the use of artificial 39 Table of Contents intelligence, to engage in illegal activities involving the theft and misuse of personal information, confidential information, and intellectual property. Any of these outcomes could damage our reputation, result in the loss of valuable property and information, and adversely impact our business.
Our $200 million grant from the DOE was cancelled and there is no certainty that the Company will qualify or have access to future awards or grants in the United States.
Our $200 million grant from the DOE was withdrawn and there is no certainty that the Company will qualify or have access to future awards or grants in the United States.
One of our manufacturing sites is in China, and under PRC environmental regulations we are required to maintain the pollutant emission levels at each of our facilities within the levels prescribed by the relevant governmental authorities and obtain a pollution discharge permit 33 Table of Contents for our water and air emissions.
One of our manufacturing sites is in China, and under PRC environmental regulations we are required to maintain the pollutant emission levels at each of our facilities within the levels prescribed by the relevant governmental authorities and obtain a pollution discharge permit for our water and air emissions.
The revocation of these prior executive orders may decrease the demand and reduce the value of the greenhouse gas credits and similar regulatory credits, which we may sell to other manufacturers. Further, we cannot 20 Table of Contents guarantee that the current governmental incentives and subsidies available for purchasers of electric vehicles will remain available.
The revocation of these prior executive orders may decrease the demand and reduce the value of the greenhouse gas credits and similar regulatory credits, which we may sell to other manufacturers. Further, we cannot guarantee that the current governmental incentives and subsidies available for purchasers of electric vehicles will remain available.
In 2021, the PRC government also implemented a comprehensive data security law which aims to regulate a wide range of issues in relation to the collection, 39 Table of Contents storage, processing, use, provision, transaction and publication of any kind of data, and a law on personal information which provides a comprehensive set of rules on personal information protection in China.
In 2021, the PRC government also implemented a comprehensive data security law which aims to regulate a wide range of issues in relation to the collection, storage, processing, use, provision, transaction and publication of any kind of data, and a law on personal information which provides a comprehensive set of rules on personal information protection in China.
If we are unable to control our labor costs or pass such increased labor costs on to our subsidiaries’ customers, our financial condition and results of operations may be adversely affected. The PRC government may exert substantial influence over the manner in which we conduct our business operations in China.
If we are unable to control our labor costs or pass such increased labor costs on to our subsidiaries’ customers, our financial condition and results of operations may be adversely affected. 42 Table of Contents The PRC government may exert substantial influence over the manner in which we conduct our business operations in China.
The theft or unauthorized use or publication of our trade secrets and other confidential business information 44 Table of Contents could reduce the differentiation of our products and harm our business, the value of our investment in development or business acquisitions could be reduced and third parties might make claims against us related to losses of their confidential or proprietary information.
The theft or unauthorized use or publication of our trade secrets and other confidential business information could reduce the differentiation of our products and harm our business, the value of our investment in development or business acquisitions could be reduced and third parties might make claims against us related to losses of their confidential or proprietary information.
If our payment processors fail to maintain awareness of and comply with new or revised sanctions restrictions or prohibitions, which may evolve quickly and come into force with little or no notice, we may be at risk of being deemed to have violated such sanctions limitations.
If our payment processors fail to maintain awareness of and comply with new or revised sanctions restrictions or prohibitions, which may evolve quickly and come into force with little or no notice, we may be at risk of being deemed to have violated 36 Table of Contents such sanctions limitations.
The forum provision further provides that the federal district courts of the United States of America will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for the resolution of any action asserting claims arising under the Securities Act of 1933, as amended (the "Securities Act").
The forum provision further provides that the federal district courts of the United States of America will, to the fullest extent permitted by 49 Table of Contents applicable law, be the sole and exclusive forum for the resolution of any action asserting claims arising under the Securities Act of 1933, as amended (the "Securities Act").
If we are u nable to manufacture products in commercial quantities on a timely and cost-effective basis, we could lose our customers and be unable to attract future customers. Our working capital requirements involve estimates based on the demand expectations and may decrease or increase beyond those currently anticipated, which could adversely impact our operating results and financial condition.
If we are u nable to manufacture products in commercial quantities on a timely and cost-effective basis, we could lose our customers and be unable to attract future customers. 22 Table of Contents Our working capital requirements involve estimates based on the demand expectations and may decrease or increase beyond those currently anticipated, which could adversely impact our operating results and financial condition.
A key part of our Clean City Transit 24 Table of Contents plan that aims to introduce our battery systems to electric buses, then to taxis and finally to passenger cars is premised on establishing compatible charging station networks in urban areas that accommodate our technologies and products.
A key part of our Clean City Transit plan that aims to introduce our battery systems to electric buses, then to taxis and finally to passenger cars is premised on establishing compatible charging station networks in urban areas that accommodate our technologies and products.
Companies in the battery industry are increasingly bringing and becoming subject to suits alleging infringement of proprietary rights, particularly patent rights, and our competitors and other third parties may hold patents or have pending patent applications which could be related to our business.
Companies in the battery industry are increasingly bringing and becoming subject to suits 47 Table of Contents alleging infringement of proprietary rights, particularly patent rights, and our competitors and other third parties may hold patents or have pending patent applications which could be related to our business.
Our future depends on the needs and success of our customers, as well as the demand for our customers’ products or services. 22 Table of Contents Our battery products’ demand hinges on end-market users. If our customers’ industries underperform, leading to decreased demand for their output, our product demand may similarly decline.
Our future depends on the needs and success of our customers, as well as the demand for our customers’ products or services. Our battery products’ demand hinges on end-market users. If our customers’ industries underperform, leading to decreased demand for their output, our product demand may similarly decline.
Some of those suppliers have filed liens while others have filed lawsuits and we have entered into settlement agreements that include stays of proceedings, payment adjustments and lien releases. There can be no assurance that we will be successful in obtaining sufficient funding.
Some of those suppliers have filed liens while others have filed lawsuits and we have entered into settlement agreements that include stays of proceedings, payment adjustments and lien releases. 15 Table of Contents There can be no assurance that we will be successful in obtaining sufficient funding.
As revenues increase in our European and US operations and this involves inter-company transactions due to the production coming from MPS China, there is a risk that as those revenues increase, there will be higher scrutiny by local tax authorities on those inter-company transactions.
As revenues increase in our European and US operations and this involves intercompany transactions due to the production coming from MPS China, there is a risk that as those revenues increase, there will be higher scrutiny by local tax authorities on those intercompany transactions.
It may be impossible to obtain swift and equitable enforcement of laws that do exist, or to obtain enforcement 41 Table of Contents of the judgment of one court by a court of another jurisdiction. China’s legal system is based on the civil law regime, that is, it is based on written statutes.
It may be impossible to obtain swift and equitable enforcement of laws that do exist, or to obtain enforcement of the judgment of one court by a court of another jurisdiction. China’s legal system is based on the civil law regime, that is, it is based on written statutes.
We also had purchase commitments for non-cancelable contractual obligations primarily related to purchases of inventory of $48.2 million as of December 31, 2024. We expect that additional funding will be needed to complete the Clarksville expansion, including payment for certain accounts payable owed to suppliers in relation to assets and services provided for this expansion.
We also had purchase commitments for non-cancelable contractual obligations primarily related to purchases of inventory of $37.2 million as of December 31, 2025. We expect that additional funding will be needed to complete the Clarksville expansion, including payment for certain accounts payable owed to suppliers in relation to assets and services provided for this expansion.
Further, we cannot assure you that competitors will not infringe our trademarks or that we will have adequate resources to enforce our trademarks and trade names, which we need to build name recognition among potential partners or customers in our markets of interest.
Further, we cannot assure you that competitors will not infringe our trademarks or that we will have adequate resources to enforce our trademarks and trade names, which we need to build name recognition among potential partners or 46 Table of Contents customers in our markets of interest.
We may find that these efforts are more expensive than we currently anticipate or that these efforts may not result in revenues, which would further increase our losses. Our business and our ability to complete the Clarksville expansion could be adversely affected by mechanics liens filed by contractors that we do not have sufficient funds to pay.
We may find that these efforts are more expensive than we currently anticipate or that these efforts may not result in revenues, which would further increase our losses. 16 Table of Contents Our business and our ability to complete the Clarksville expansion could be adversely affected by mechanics liens filed by contractors that we do not have sufficient funds to pay.
If we fail to adopt these new technologies, or develop new technologies of our own, such technologies may, if successfully developed by our competitors, offer significant performance or price advantages compared with our technologies and our technology leadership and competitive strengths may be adversely affected.
If we fail to adopt t hese new technologies, or develop new technologies of our own, such technologies may, if successfully developed by our competitors, offer significant performance or price advantages compared with our technologies and our technology leadership and competitive strengths may be adversely affected.
For example, changes in fee structures, electricity pricing structures, and system permitting, interconnection, and operating requirements can deter purchases of renewable energy products by reducing anticipated revenues or increasing costs or regulatory burdens for 31 Table of Contents would-be system purchasers.
For example, changes in fee structures, electricity pricing structures, and system permitting, interconnection, and operating requirements can deter purchases of renewable energy products by reducing anticipated revenues or increasing costs or regulatory burdens for would-be system purchasers.
Further, since the 47 Table of Contents registration of the warrants was not completed within 90 days following the Business Combination, pursuant to the Registration Rights and Lock-Up Agreement, warrant holders may exercise the warrants on a net-share basis.
Further, since the registration of the warrants was not completed within 90 days following the Business Combination, pursuant to the Registration Rights and Lock-Up Agreement, warrant holders may exercise the warrants on a net-share basis.
Our failure to cost-effectively manufacture our batteries in quantities which satisfy our customers’ demand and product specifications and their expectations for product quality and reliable delivery could damage our customer relationships and result in significant lost business opportunities for us. 23 Table of Contents We manufacture our products rather than relying upon third-party outsourcing.
Our failure to cost-effectively manufacture our batteries in quantities which satisfy our customers’ demand and product specifications and their expectations for product quality and reliable delivery could damage our customer relationships and result in significant lost business opportunities for us. We manufacture our products rather than relying upon third-party outsourcing.
Should tariffs increase and be sustained, our inventory acquisition and carrying costs may be increased, which costs may be passed on to us and consumers through 32 Table of Contents higher prices for our products. These increased prices may adversely impact our new product sales and demand for such products, potentially impacting our ability to sell them profitably.
Should tariffs increase and be sustained, our inventory acquisition and carrying costs may be increased, which costs may be passed on to us and consumers through higher prices for our products. These increased prices may adversely impact our new product sales and demand for such products, potentially impacting our ability to sell them profitably.
Network data processors should identify and declare “important data” in accordance with the relevant provisions, but they are not required to conduct security assessment for outbound data transfer for data that has not been notified or published as “important data” by relevant departments or regions.
Network data processors should identify and declare “important data” in accordance with the relevant provisions, but they are not required to conduct security assessment for outbound data transfer for data that has not been notified or published as “important data” by relevant 41 Table of Contents departments or regions.
We have subjected our battery systems to various tests and damaging treatments such as baking, overcharging, crushing or puncturing to assess the response of our battery systems to deliberate and sometimes destructive abuse.
We have subjected our battery systems to various tests and damaging treatments such as baking, overcharging, 18 Table of Contents crushing, or puncturing to assess the response of our battery systems to deliberate and sometimes destructive abuse.
We may selectively acquire or invest in other companies or technologies that we believe could complement or expand our platform, enhance our technical capabilities or otherwise offer growth opportunities. However, acquisitions are 27 Table of Contents complex, costly and time-consuming processes and involve numerous risks.
We may selectively acquire or invest in other companies or technologies that we believe could complement or expand our platform, enhance our technical capabilities or otherwise offer growth opportunities. However, acquisitions are complex, costly and time-consuming processes and involve numerous risks.
Department of Treasury released its Guidance on Domestic Content Bonus for Clean Energy Credits, which included adjustments impacting battery electric storage systems. The Trump Administration has also issued executed orders that potentially impact ESS and EV operations.
Department of Treasury released its Guidance on Domestic Content 29 Table of Contents Bonus for Clean Energy Credits, which included adjustments impacting battery electric storage systems. The Trump Administration also issued executed orders that potentially impact ESS and EV operations.
The reduction, elimination or expiration of such incentives could harm our business and cash flows. In August 2022, the United States passed the IRA, which includes a number of government incentives that support the adoption of energy storage products and services and could potentially benefit the Company and its operations. On January 16, 2025, the U.S.
The reduction, elimination or expiration of such incentives could harm our business and cash flows. For example, in August 2022, the United States passed the IRA, which included a number of government incentives that support the adoption of energy storage products and services and could potentially benefit the Company and its operations. However, on January 16, 2025, the U.S.
This volatility can significantly affect the availability and cost of raw materials, and may therefore have a material adverse effect on our business, results of operations, and financial condition.
This volatility can 24 Table of Contents significantly affect the availability and cost of raw materials, and may therefore have a material adverse effect on our business, results of operations, and financial condition.
Preferred stock, if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to the holders of common stock.
Preferred stock, if issued, could have a preference with respect to liquidating distributions or a preference with 48 Table of Contents respect to dividend payments that could limit our ability to pay dividends to the holders of common stock.
Lingering inflation above the Federal Reserve's target rate, the ongoing conflicts between Russia and Ukraine and in the Middle East, and other macroeconomic factors has caused prices to increase across various sectors of the economy and we have been impacted by increases in the prices of our raw materials and other associated manufacturing costs.
Lingering inflation above the Federal Reserve's target rate, the ongoing conflicts in the Middle East, including hostilities with Iran, the war between Russia and Ukraine, and other macroeconomic factors has caused prices to increase across various sectors of the economy, and we have been impacted by increases in the prices of our raw materials and other associated manufacturing costs.
We typically offer warranties for our battery products against any defects due to product malfunction or workmanship for a period ranges from one to eight years (or up to 3 years in the case of ESS) from the date of purchase. We provide a reserve for these potential warranty expenses, which is based on an analysis of historical warranty issues.
We typically offer warranties for our battery products against any defects due to product malfunction or workmanship for a period ranges from one to eight years from the date of purchase. We provide a reserve for these potential warranty expenses, which is based on an analysis of historical warranty issues.
For example, the current U.S. presidential administration has issued executive orders to revoke certain executive orders from the prior administration, which directed federal agencies to review and potentially revise vehicle fuel efficiency and emissions standards.
For example, the current U.S. presidential administration has issued executive orders to revoke certain executive orders from the prior administration, which directed federal agencies to review and potentially revise vehicle fuel efficiency and 19 Table of Contents emissions standards.
As a result, fluctuations in raw material prices could have a material adverse effect on our business, results of operations, and financial condition. In addition, the Trump Administration has indicated that it may propose a significant increase in tariff rates on various types of goods imported from Asia that could apply to the raw materials we require.
As a result, fluctuations in raw material prices could have a material adverse effect on our business, results of operations, and financial condition. In addition, the current U.S. government has indicated that it may propose a significant increase in tariff rates on various types of goods imported from Asia that could apply to the raw materials we require.
If maintained, these and other potential tariffs yet to be announced or imposed may have an adverse impacts on general economic conditions and our business, the exact outcomes of which are uncertain and depend on various factors, such as negotiations between the U.S. and China, the duration of such tariffs, the responses of other countries or regions to such tariffs, the actual increases in the costs of imported PRC products and raw materials, and exemptions or exclusions that may be granted.
Tariffs may have an adverse impacts on general economic conditions and our business, the exact outcomes of which are uncertain and depend on various factors, such as negotiations between the U.S. and China, the duration of such tariffs, the responses of other countries or regions to such tariffs, the actual increases in the costs of imported PRC products and raw materials, and exemptions or exclusions that may be granted.
We currently have general liability insurance with an annual limit of up to approximately $71.6 million to cover liabilities arising from product liability claims or product recalls worldwide (excluding the U.S. and Canada), which may not be sufficient to cover potential liability claims.
Our general liability insurance may not be sufficient to cover potential liability from product liability claims. We currently have general liability insurance with an annual limit of up to approximately $74.3 million to cover liabilities arising from product liability claims or product recalls worldwide (excluding the U.S. and Canada), which may not be sufficient to cover potential liability claims.
R&D activities, however, are inherently 21 Table of Contents uncertain, and we might encounter practical difficulties in commercializing our research results. Accordingly, our significant investment in our R&D infrastructure may not lead to marketable products.
R&D activities, however, are inherently uncertain, and we might encounter practical difficulties in commercializing our research results. Accordingly, our significant investment in our R&D infrastructure may not lead to marketable products.
Changes in laws or regulations could result in higher expenses and payments, and uncertainty relating to laws or regulations may also affect how we conduct our operations and structures our investments and could limit our ability to enforce our rights.
Changes in laws or regulations could result in higher expenses and payments, and uncertainty relating to laws or regulations may also affect how we conduct our operations and 33 Table of Contents structures our investments and could limit our ability to enforce our rights.
In October 2022, we were notified by the DOE that we had been selected, in collaboration with General Motors, to receive $200 million in grant funding as part of the DOE's Battery Materials Processing and Battery Manufacturing initiative pursuant to the recently enacted infrastructure law, subject to negotiation of specific terms and conditions.
In October 2022, we were notified by the DOE that we had been selected, in collaboration with General Motors, to receive $200 million in grant funding as part of the DOE's Battery Materials Processing and Battery Manufacturing initiative pursuant to the Infrastructure Investment and Jobs Act, subject to negotiation of specific terms and conditions.
Implementation and enforcement of China intellectual property laws have historically been deficient and ineffective and may be hampered by corruption and local protectionism.
Implementation and enforcement of China intellectual property laws have historically been 45 Table of Contents deficient and ineffective and may be hampered by corruption and local protectionism.
This situation will be costly and time consuming and 43 Table of Contents distract our management from growing our business. If such allegations are not proven to be groundless, we and our business operations will be adversely affected.
This situation will be costly and time consuming and distract our management from growing our business. If such allegations are not proven to be groundless, we and our business operations will be adversely affected.
We also may not achieve the anticipated benefits from the acquired business due to a number of factors, including: inability or difficulty integrating and benefiting from acquired technologies, services or clients in a profitable manner; unanticipated costs or liabilities associated with the acquisition; difficulty integrating the accounting systems, operations and personnel of the acquired business; adverse effects to our existing business relationships with business partners and clients as a result of the acquisition; assuming potential liabilities of an acquired company; possibility of overpaying for acquisitions, particularly those with significant intangibles and those assets that derive value using novel tools or are involved in niche markets; difficulty in acquiring suitable businesses, including challenges in predicting the value an acquisition will ultimately contribute to our business; the potential loss of key employees of the acquired business; and use of substantial portions of our available cash to consummate the acquisition.
If we acquire additional businesses, we may not be able to integrate the acquired personnel, operations and technologies successfully or effectively manage the combined business following the acquisition. 26 Table of Contents We also may not achieve the anticipated benefits from the acquired business due to a number of factors, including: inability or difficulty integrating and benefiting from acquired technologies, services or clients in a profitable manner; unanticipated costs or liabilities associated with the acquisition; difficulty integrating the accounting systems, operations and personnel of the acquired business; adverse effects to our existing business relationships with business partners and clients as a result of the acquisition; assuming potential liabilities of an acquired company; possibility of overpaying for acquisitions, particularly those with significant intangibles and those assets that derive value using novel tools or are involved in niche markets; difficulty in acquiring suitable businesses, including challenges in predicting the value an acquisition will ultimately contribute to our business; the potential loss of key employees of the acquired business; and use of substantial portions of our available cash to consummate the acquisition.
Our cash and cash equivalents balances are concentrated in a few locations around the world, with approximately 63% and 74% of those balances held outside of the U.S. as of December 31, 2024 and 2023. Cash repatriation costs and restrictions limit our ability to repatriate cash held by our foreign subsidiaries and intercompany dividends.
Our cash and cash equivalents balances are concentrated in a few locations around the world, with approximately 59% of those balances held outside of the U.S. as of December 31, 2025. Cash repatriation costs and restrictions limit our ability to repatriate cash held by our foreign subsidiaries and intercompany dividends.
If maintained, these and other potential tariffs yet to be announced or imposed may have an adverse impacts on general economic conditions and our business, the exact outcomes of which are uncertain and depend on various factors, such as negotiations between the U.S. and China or other foreign countries, the duration of such tariffs, the responses of other countries or regions to such tariffs, the actual increases in the costs of imported foreign products and raw materials, and exemptions or exclusions that may be granted.
Tariffs may have an adverse impact on general economic conditions and our business, the exact outcomes of which are uncertain and depend on various factors, such as negotiations between the U.S. and China or other foreign countries, the duration of such tariffs, the responses of other countries or regions to such tariffs, the actual increases in the costs of imported foreign products and raw materials, and exemptions or exclusions that may be granted.
The Tuscan Group paid only a nominal aggregate purchase price of $25,000 for the Founder Shares, or approximately $0.004 per share, while the initial public offering (“IPO”) price of our common stock was $10.00 per share and the trading price of our common stock $1.27 as of March 24, 2025.
The Tuscan Group paid only a nominal aggregate purchase price of $25,000 for the Founder Shares, or approximately $0.004 per share, while the initial public offering (“IPO”) price of our common stock was $10.00 per share and the trading price of our common stock was $2.10 as of March 9, 2026.
We have outstanding payables in relation to assets and services provided for the Clarksville expansion amounting to $27.3 million that are to our suppliers as of December 31, 2024.
We have outstanding payables in relation to assets and services provided for the Clarksville expansion amounting to $3.1 million that are related to our suppliers as of December 31, 2025.
On the other hand, our competitors may improve their technologies or even achieve technological breakthroughs either as alternatives to lithium-based battery systems or improvements on existing lithium-based battery systems that would render our products obsolete or less marketable.
On the other hand, our competitors may improve their technologies or even achieve technological advancements either as alternatives to lithium-based battery systems or improvements on existing lithium-based battery systems that 20 Table of Contents would render our products obsolete or less marketable.
The uncertainty in global economic conditions and obligations arising under economic, financial or trade sanctions laws and regulations or export controls, such as those associated with the ongoing conflicts between Russia and Ukraine and in the Middle East, could negatively affect our operating results.
The uncertainty in global economic conditions and obligations arising under economic, financial or trade sanctions laws and regulations or export controls, such as those associated with the ongoing conflicts in the Middle East, including hostilities with Iran, the war between Russia and Ukraine, and other current or future conflicts, could negatively affect our operating results.
These conditions and events raise substantial doubt about our ability to continue as a going concern.
These conditions and events raise substantial doubt about the Company's ability to continue as a going concern.
The success of our business depends on our ability to attract, train and retain highly-skilled employees and key personnel. As a result of the highly specialized, technical nature of our business, we must attract, train and retain a sizable workforce comprising highly-skilled employees and other key personnel.
As a result of the highly specialized, technical nature of our business, we must attract, train and retain a sizable workforce comprising highly-skilled employees and other key personnel.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe also engage reputable outsourced service providers to perform key operational functions, ensuring comprehensive protection of shared data and adherence to rigorous cybersecurity protocols. Microvast utilizes a set of policies, procedures, and technologies designed to prevent, detect, respond to, and recover from cybersecurity threats and incidents.
Biggest changeSecurity events and data incidents are evaluated, ranked by severity and prioritized for response and remediation. Incidents are evaluated to determine materiality as well as operational and business impact, and reviewed for privacy impact. Microvast utilizes a set of policies, procedures, and technologies designed to prevent, detect, respond to, and recover from cybersecurity threats and incidents.
These policies, based on the NIST Cybersecurity Framework, are regularly reviewed and updated to integrate industry best practices. Internal control evaluations are conducted routinely to ensure compliance and address any identified vulnerabilities. Our company did not experience any cybersecurity incidents that materially impacted our operations for the year ended December 31, 2024.
These policies are regularly reviewed and updated to integrate industry 53 Table of Contents best practices. Internal control evaluations are conducted routinely to ensure compliance and address any identified vulnerabilities. Our company did not experience any cybersecurity incidents that materially impacted our operations for the year ended December 31, 2025.
We remain unaware of any active threats that could significantly affect our business strategy or financial condition. For more information on cybersecurity risks, see “Risk Factors — Risks Related to Our Business and Industry.” Cybersecurity Governance On July 26, 2023, the SEC adopted a rule requiring enhanced disclosure of cybersecurity risk management, strategy, and governance.
We remain unaware of any active threats that could significantly affect our business strategy or financial condition. For more information on cybersecurity risks, see “Risk Factors — Risks Related to Our Business and Industry.” Cybersecurity Governance Cybersecurity is an important part of our risk management processes and an area of focus for our Board and management.
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ITEM 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy The security and integrity of our information systems, communication networks, IT infrastructure, and data centers are critical to the successful operation of our business. As such, we have invested in advanced technologies to identify and manage material cybersecurity risks that could impede our operations.
Added
ITEM 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats, as such term is defined in Item 106(a) of Regulation S-K. These risks include, among other things: operational risks, intellectual property theft, fraud, extortion, harm to employees or customers and violation of data privacy or security laws.
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Microvast's SVP of Information Technology, is responsible for risk assessment and management. 52 Table of Contents This individual has experience in developing security policies, enforcing compliance, orchestrating incident responses, and implementing cybersecurity strategies. Management is actively involved in cybersecurity governance, ensuring alignment with our overall business strategy.
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Identifying and assessing cybersecurity risk is integrated into our overall risk management systems and processes. Cybersecurity risks related to our business, technical operations, privacy and compliance issues are identified and addressed through a multi-faceted approach including third party assessments, internal IT Audit, IT security, governance, risk and compliance reviews.
Removed
Their responsibilities include: • Security Objectives : Establishing security goals that correspond with corporate objectives and risk appetite. • Resource Allocation : Providing adequate resources, including budget and personnel, to address cybersecurity risks effectively. • Policy Development : Developing and maintaining policies that meet industry standards. • Risk Management : Directing risk management initiatives and instituting control measures to mitigate recognized risks. • Incident Response : Overseeing the implementation and regular testing of incident response plans, with employee training to ensure effective response capabilities. • Compliance : Ensuring adherence to applicable regulations, while remaining vigilant about emerging threats.
Added
To defend, detect and respond to cybersecurity incidents, we, among other things: conduct proactive cybersecurity reviews of systems and applications, audit applicable data policies, perform testing to test security controls, conduct employee training, monitor emerging laws and regulations related to data protection and information security and implement appropriate changes as the need arises.
Removed
Our Board of Directors evaluates our readiness to manage cybersecurity threats, receiving regular updates from the SVP of Information Technology, General Counsel, and CEO regarding any materially impactful cybersecurity risks.
Added
We have implemented incident response and breach management processes which have four overarching and interconnected stages: 1) preparation for a cybersecurity incident, 2) detection and analysis of a security incident, 3) containment, eradication and recovery, and 4) post-incident analysis. Such incident responses are overseen by leaders from our Information Security, Compliance and Legal team regarding matters of cybersecurity.
Removed
Specific Cybersecurity Measures Microvast has implemented various cybersecurity measures, including, but not limited to the following: • Establishing physical security protocols and securing network access via VPN. • Requiring multi-factor authentication for email and collaboration platforms. • Deploying endpoint detection and response (EDR) and antivirus solutions across all devices. • Enforcing strong password policies with a secured password vault for system credentials. • Minimizing attack vectors by eliminating external web-facing business-critical applications. • Utilizing encryption technologies to safeguard intellectual property and mitigate data loss risks. • Developing a comprehensive suite of information security policies and a strategic information security roadmap. • Implementing a Security Information and Event Management (SIEM) system.
Added
Our Audit Committee is responsible for the oversight of risks from cybersecurity threats. Members of the Audit Committee receive updates on a quarterly basis from senior management, including leaders from our Information Security, Compliance and Legal teams regarding matters of cybersecurity.
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These efforts, coupled with the isolation of industrial networks and structured software installation processes, demonstrate our continued commitment to maintaining robust cybersecurity defenses. 53 Table of Contents
Added
This includes existing and new cybersecurity risks, status on how management is addressing and/or mitigating those risks, cybersecurity and data privacy incidents (if any) and status on key information security initiatives. Our Board members also engage in ad hoc conversations with management on cybersecurity-related news events and discuss any updates to our cybersecurity risk management and strategy.
Added
Our cybersecurity risk management and strategy processes are overseen by leaders from our Information Security, Compliance and Legal teams. Such individuals have an average of over 20 years of prior work experience in various roles involving information technology, including security, auditing, compliance, systems, and programming.
Added
These individuals are informed about, and monitor the prevention, mitigation, detection and remediation of cybersecurity incidents through their management of, and participation in, the cybersecurity risk management and strategy processes described above, including the operation of our incident response plan, and report to the Audit Committee on any appropriate items. 54 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeSales, after sales-service, warehouse, testing Leased Huzhou China 1,400,000 sq. ft. on 72 acres Asia Pacific headquarters, manufacturing (components, cell, module and pack), testing, warehouse, sales, after-sales service, research and development, administrative offices, and canteen services Owned Huzhou China 61,000 sq. ft.
Biggest changeWarehouse, service office, after sales service Leased Huzhou China 1,400,000 sq. ft. on 72 acres Asia Pacific headquarters, manufacturing (components, cell, module and pack), testing, warehouse, sales, after-sales service, research and development, administrative offices, and canteen services Owned Huzhou China 61,000 sq. ft. Manufacturing (other), testing, warehouse, sales, after-sales service, research and development, administrative offices, and canteen services Leased
ITEM 2. PROPERTIES Facilities Our corporate headquarters is located in Stafford, Texas at 12603 Southwest Freeway, Suite 300, Stafford, Texas 77477. A summary of our physical properties as of December 31, 2024 follows in the table below. Location Country Approximate Size Function Owned / Leased Stafford, Texas United States 4,400 sq. ft.
ITEM 2. PROPERTIES Facilities Our corporate headquarters is located in Stafford, Texas at 12603 Southwest Freeway, Suite 300, Stafford, Texas 77477. A summary of our physical properties as of December 31, 2025 follows in the table below. Location Country Approximate Size Function Owned / Leased Stafford, Texas United States 9,300 sq. ft.
Corporate headquarters, administrative offices Leased Lake Mary, Florida United States 75,000 sq. ft. on 7 acres Research and development, administrative offices Owned Clarksville, Tennessee United States 577,000 sq. ft. on 82 acres Manufacturing (cell, module and pack), testing, energy storage container assembly, warehouse, sales, after-sales service, administrative offices Owned Timnath, Colorado United States 24,993 sq.ft. on 6.76 acres administrative offices Owned Berlin Germany 185,000 sq. ft. on 9 acres European headquarters, administrative offices, manufacturing (module and pack), testing, warehouse, sales, after sales-service Leased London United Kingdom 4,990 sq. ft.
Corporate headquarters, administrative offices Leased Lake Mary, Florida United States 75,000 sq. ft. on 7 acres Research and development, administrative offices Owned Clarksville, Tennessee United States 577,000 sq. ft. on 82 acres Manufacturing, testing, energy storage container assembly, warehouse, sales, after-sales service, administrative offices Owned Berlin Germany 185,000 sq. ft. on 9 acres European headquarters, administrative offices, manufacturing (module), testing, warehouse, sales, after sales-service Leased London United Kingdom 4,990 sq. ft.
Removed
Manufacturing (other), testing, warehouse, sales, after-sales service, research and development, administrative offices, and canteen services Leased 54 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRegardless of the outcome, litigation has the potential to have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 55 Table of Contents PART II
Biggest changeHowever, the amount of 55 Table of Contents any such loss in that scenario cannot be reasonably estimated at this time. Regardless of the outcome, litigation has the potential to have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. ITEM 4.
ITEM 3. LEGAL PROCEEDINGS For a description of our pending legal proceedings, please see Note 28. Commitments and Contingencies, to the consolidated financial statements included elsewhere in this Annual Report.
ITEM 3. LEGAL PROCEEDINGS For a description of our pending legal proceedings, please see Note 27. Commitments and Contingencies, to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
While the lawsuits are being vigorously defended, the outcome of any litigation is inherently uncertain, and there is always the possibility that a court rules in a manner that is adverse to the interests of the Company and the individual defendants. However, the amount of any such loss in that scenario cannot be reasonably estimated at this time.
While the lawsuits are being vigorously defended, the outcome of any litigation is inherently uncertain, and there is always the possibility that a court rules in a manner that is adverse to the interests of the Company and the individual defendants.
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MINE SAFETY DISCLOSURES Not applicable. 56 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders of Common Stock As of March 24, 2025, there were approximately 93 registered holders of our common stock according to the records maintained by our transfer agent. Dividend Policy We currently intend to retain all available funds and any future earnings to fund the development and growth of our business.
Biggest changeA substantially greater number of our holders of our common stock are "street name" or beneficial holders, whose shares are held by banks, brokers, and other financial institutions. Dividend Policy We currently intend to retain all available funds and any future earnings to fund the development and growth of our business.
Any such decision will also be subject to compliance with contractual restrictions and covenants in the agreements governing current and future indebtedness. Securities Authorized for Issuance Under Equity Compensation Plans Our equity compensation plans that provide for the annual awarding of stock-based compensation have been approved by our stockholders. For additional detail, see Note 21.
Any such decision will also be subject to compliance with contractual restrictions and covenants in the agreements governing current and future indebtedness. Securities Authorized for Issuance Under Equity Compensation Plans Our equity compensation plans that provide for the annual awarding of stock-based compensation have been approved by our stockholders. For additional detail, see Note 20.
Share-Based Payment, to our audited consolidated financial statements included in Part II, Item 8 of this Annual Report. The following table sets forth, as of December 31, 2024, certain information related to our compensation plans under which shares of our common stock may be issued.
Share-Based Payment, to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. The following table sets forth, as of December 31, 2025, certain information related to our compensation plans under which shares of our common stock may be issued.
Stock Incentive Plan (the “Stock Incentive Plan”) that were converted in the Business Combination into options to purchase 33,647,927 shares of our common stock and RSUs with respect to 23,027,399 shares of our common stock.
Stock Incentive Plan (the “Stock Incentive Plan”) that were converted in the Business Combination into options to purchase 33,647,927 shares of our common stock and RSUs with respect to 23,027,399 shares of our common stock. No further awards may be granted under the Stock Incentive Plan.
Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans Equity compensation plans approved by security holders 61,348,476 (1) $ 5.80 15,608,278 (2) Equity compensation plans not approved by security holders — $ — — Total 61,348,476 15,608,278 (1) Includes (i) 56,675,326 stock options and restricted stock units (“RSUs”) granted under the Microvast, Inc.
Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans Equity compensation plans approved by security holders 56,891,961 (1) $ 5.72 20,064,793 (2) Equity compensation plans not approved by security holders — $ — — Total 56,891,961 20,064,793 (1) Includes (i) 56,675,326 stock options and restricted stock units (“RSUs”) granted under the Microvast, Inc.
Microvast Holdings, Inc.’s publicly-traded warrants are listed on NASDAQ under the symbol “MVSTW.” Prior to the consummation of the Business Combination, Tuscan’s common stock and public warrants were listed on the NASDAQ under the symbols “THCB” and “THCBW,” respectively.
Microvast Holdings, Inc.’s publicly-traded warrants are listed on NASDAQ under the symbol “MVSTW.” Holders of Common Stock As of March 9, 2026, there were approximately 86 registered holders of our common stock according to the records maintained by our transfer agent.
No further awards may be granted under the Stock Incentive Plan. 56 Table of Contents (2) Represents shares available for future issuance under the 2021 Plan.
(2) Represents shares available for future issuance under the 2021 Plan. 57 Table of Contents Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities None. ITEM 6. [RESERVED]
Removed
Recent Sales of Unregistered Securities Information regarding all equity securities of the registrant sold by us during the period covered by this Annual Report that was not registered under the Securities Act was included in a Current Report on Form 8-K, and therefore is not required to be furnished herein. Issuer Purchases of Equity Securities None. ITEM 6. [RESERVED]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

66 edited+41 added−68 removed31 unchanged
Biggest changeComparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023 The following table sets forth our historical operating results for the periods indicated: Amounts in thousands December 31, 2024 2023 $ Change % Change Revenues 379,801 306,617 73,184 23.9 % Cost of revenues (260,249) (249,390) (10,859) 4.4 % Gross profit 119,552 57,227 62,325 108.9 % 31.5 % 18.7 % Operating expenses: General and administrative expenses (81,486) (96,787) 15,301 (15.8) % Research and development expenses (41,065) (45,004) 3,939 (8.8) % Selling and marketing expenses (22,576) (23,614) 1,038 (4.4) % Impairment loss of long-lived assets (93,173) (504) (92,669) 18386.7 % Total operating expenses (238,300) (165,909) (72,391) 43.6 % Subsidy income 2,658 1,953 705 36.1 % Operating loss (116,090) (106,729) (9,361) 8.8 % Other income and expenses: Interest income 742 3,609 (2,867) (79.4) % Interest expense (9,711) (2,628) (7,083) 269.5 % Gain on debt restructuring 9,406 — 9,406 100.0 % Other income/ (expense), net 156 (713) 869 (121.9) % Changes in fair value of warrant liability and convertible loan (79,960) 59 (80,019) (135625.4) % Loss before income tax (195,457) (106,402) (89,055) 83.7 % Income tax expense — (10) 10 (100.0) % Net loss (195,457) (106,412) (89,045) 83.7 % Less: Net loss attributable to noncontrolling interest — (76) 76 (100.0) % Net loss attributable to Microvast Holdings, Inc.
Biggest changeComparison of the Year Ended December 31, 2025 to the Year Ended December 31, 2024 The following table sets forth our historical operating results for the periods indicated (in thousands, except percentages): Year Ended December 31, 2025 2024 $ Change % Change Revenues $ 427,516 $ 379,801 47,715 12.6 % Cost of revenues (272,899) (260,249) (12,650) 4.9 % Energy storage system impairment (32,507) — (32,507) 100.0 % Gross profit 122,110 119,552 2,558 2.1 % 28.6 % 31.5 % Operating expenses: General and administrative expenses (57,821) (81,486) 23,665 (29.0) % Research and development expenses (34,109) (41,065) 6,956 (16.9) % Selling and marketing expenses (22,197) (22,576) 379 (1.7) % Impairment loss of long-lived assets (4,142) (93,173) 89,031 (95.6) % Total operating expenses (118,269) (238,300) 120,031 (50.4) % Subsidy income 3,142 2,658 484 18.2 % Income/(loss) from operations 6,983 (116,090) 123,073 (106.0) % Other income and expenses: Interest income 957 742 215 29.0 % Interest expense (4,903) (9,711) 4,808 (49.5) % Gain on debt restructuring 1,297 9,406 (8,109) (86.2) % Other income 244 156 88 56.4 % Changes in fair value of warrant liability and convertible loan (39,121) (79,960) 40,839 (51.1) % Loss before provision for income tax (34,543) (195,457) 160,914 (82.3) % Benefit from (provision for) income taxes 5,325 — 5,325 100.0 % Net loss $ (29,218) $ (195,457) 166,239 (85.1) % 63 Table of Contents Revenue Our revenue increased from $379.8 million in 2024 to $427.5 million in 2025, reflecting a 12.6% year-over-year growth.
Interest expense related to the convertible loan is included in the changes in fair value. The fair value of the convertible loan with shareholder was determined by using a discounted cash flow model for the bond component and a Black-Scholes-Merton model for the conversion option, which is considered a Level 3 fair value measurement.
Interest expense related to the convertible loan is included in the changes in fair value. The fair value of the convertible loan was determined by using a discounted cash flow model for the bond component and a Black-Scholes-Merton model for the conversion option, which is considered a Level 3 fair value measurement.
Although no additional binding financing agreements have been entered into, the Group remains engaged in discussions with third parties to explore further capital-raising opportunities. Future capital requirements may change based on business developments, market conditions, and liquidity needs. The company continues to evaluate potential options, including equity offerings and debt financing, to ensure financial flexibility and long-term growth.
Although no additional binding financing agreements have been entered into, the Company remains engaged in discussions with third parties to explore further capital-raising opportunities. Future capital requirements may change based on business developments, market conditions, and liquidity needs. The Company continues to evaluate potential options, including equity offerings and debt financing, to provide financial flexibility and long-term growth.
Cost of Revenues and Gross Profit Cost of revenues includes direct and indirect materials, manufacturing overhead (including depreciation, freight and logistics), warranty reserves and expenses, provision for obsolete inventories, and labor costs and related personnel expenses, including stock-based compensation and other related expenses that are directly attributable to the manufacturing of products.
Cost of Revenues and Gross Profit Cost of revenues includes direct and indirect materials, manufacturing overhead (including depreciation, freight, and logistics), warranty reserves and expenses, and provision for obsolete inventories. These costs also include labor costs and personnel expenses, including stock-based compensation and other related expenses that are directly attributable to the manufacturing of products.
In 2021, we started our capacity expansion plans in Huzhou, China, Berlin, Germany and Clarksville, Tennessee. The project in Germany was completed in 2021. The China Phase 3.1 capacity expansion was successfully completed in the third quarter of 2023.
In 2021, we started our capacity expansion plans in Huzhou, China, Berlin, Germany and Clarksville, Tennessee. The project in Germany was completed in 2021. The Huzhou Phase 3.1 expansion was successfully completed in 2023.
The German enterprise income tax, which is a combination of corporate income tax and trade tax, is calculated at 29.1% of the estimated assessable profit of our subsidiary in Germany. 62 Table of Contents Results of Operations This section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
The German enterprise income tax, which is a combination of corporate income tax and trade tax, is calculated at 29.1% of the estimated assessable profit of our subsidiary in Germany. Results of Operations This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024 .
Convertible loan with shareholder We elected the fair value option to account for the convertible loan with shareholder and records changes in fair value in the consolidated statements of operations, with the exception of changes in fair value due to instrument-specific credit risk which, if present, will be recorded as a component of other comprehensive income.
Convertible Loan Measured at Fair Value We elected the fair value option to account for the convertible loan and record changes in fair value in the consolidated statements of operations, with the exception of changes in fair value due to instrument-specific credit risk which, if present, will be recorded as a component of other comprehensive income.
For these awards with performance conditions, we recognize compensation expense when the performance goals are achieved, or when it becomes probable that the performance goals will be achieved.
For these awards with performance 68 Table of Contents conditions, we recognize compensation expense when the performance goals are achieved, or when it becomes probable that the performance goals will be achieved.
The exercise price for our outstanding warrants is $11.50 per share of common stock, and the trading price of our common stock was $1.27 as of March 24, 2025. There is no guarantee that the warrants will be exercised prior to their expiration, however, we do not expect this to impact our liquidity.
The exercise price for our outstanding warrants is $11.50 per share of common stock, and the trading price of our common stock was $2.10 as of March 9, 2026. There is no guarantee that the warrants will be exercised prior to their expiration, however, we do not expect this to impact our liquidity.
Compliance with these standards requires continuous investment in manufacturing processes, material sourcing, and waste disposal practices to ensure adherence to environmental mandates across multiple jurisdictions. Additionally, government policies and economic incentives play a critical role in shaping demand for electric vehicles (EVs) and energy storage systems (ESS).
Compliance with these standards requires continuous investment in manufacturing processes, material sourcing, and waste disposal practices to ensure adherence to environmental mandates across multiple jurisdictions. Additionally, government policies and economic incentives play a critical role in shaping demand for the EV and ESS markets.
We may need to seek additional equity or debt financing in order to meet these future capital requirements. If we are unable to raise additional capital when desired, or on terms that are acceptable to us, our business, financial condition and results of operations could be adversely affected. There are no material off-balance sheet arrangements other than those described below.
If we are unable to raise additional capital when desired, or on terms that are acceptable to us, our business, financial condition, and results of operations could be adversely affected. There are no material off-balance sheet arrangements other than those described below.
Technology and Product Innovation Our financial performance is driven by development and sales of new products with innovative technology. Our ability to develop innovative technology has been and will continue to be dependent on our dedicated research team.
Technology and Product Innovation Our financial performance is driven by development and sales of new products with innovative technology. Our ability to develop innovative technology has been and will continue to be dependent on our dedicated research team. We plan to continue expanding our R&D presence in the U.S.
Our income tax in the U.K. is calculated at an average tax rate of 19% of the estimated assessable profit of our subsidiary in the U.K.
The federal corporate income tax rate of 21% is applied for our U.S. entities. Our income tax in the U.K. is calculated at an average tax rate of 19% of the estimated assessable profit of our subsidiary in the U.K.
GAAP and in U.S. dollars. Components of Results of Operations This section of this Form 10-K generally discusses 2023 and 2024 items and year-to-year comparisons between 2023 and 2024.
Components of Results of Operations This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
Instead, we plan to retain available funds and future earnings to support our ongoing operations and expansion efforts in China, the E.U., and the U.S.
We currently intend to retain available funds and future earnings to support ongoing operations and expansion efforts in China, Europe, and the U.S.
For the year ended December 31, 2024, one customer accounted for 39% of our net revenues. In 2023, two customers accounted for 18% and 11% of our net revenues.
For the year ended December 31, 2025, the two largest customers accounted for 22% and 17% of our net revenues respectively. In 2024, one customer accounted for 39% of our net revenues.
The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances.
The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, 67 Table of Contents liabilities, revenue, expenses, and related disclosures. We evaluate our estimates and assumptions on an ongoing basis.
However, changes in these incentives—such as reductions or eliminations of subsidies—could negatively affect demand for our products. 60 Table of Contents As a global company with operations and sales in China, the Asia-Pacific region, Europe, and the U.S., we are also exposed to trade policies, tariffs, and regulatory shifts that could impact our ability to meet projected sales and maintain profit margins.
As a global company with operations and sales in China, the Asia-Pacific region, Europe, and the U.S., we are also exposed to trade policies, tariffs, and regulatory shifts that could impact our ability to meet projected sales and maintain profit margins.
Any significant changes in international trade agreements, supply chain restrictions, or geopolitical tensions may influence production costs, material sourcing, and cross-border sales strategies. Navigating these regulatory complexities is essential to sustaining our competitive position and long-term growth trajectory. Basis of Presentation We currently conduct our business through one operating segment. Our historical results are reported in accordance with U.S.
Any significant changes in international trade agreements, supply chain restrictions, or geopolitical tensions may influence production costs, material sourcing, and cross-border sales strategies. Navigating these regulatory complexities is essential to sustaining our competitive position and long-term growth trajectory.
Cash Flows The following table provides a summary of our cash flow data for the years indicated: Year Ended December 31, 2024 2023 Amount in thousands Net cash generated from (used in) operating activities 2,814 (75,303) Net cash used in investing activities (12,152) (165,605) Net cash provided by financing activities 37,589 33,041 Cash Flows from Operating Activities During the year ended December 31, 2024, our operating activities generated $2.8 million in cash, compared to a cash outflow of $75.3 million in 2023 .
Cash Flows The following table provides a summary of our cash flow data for the years indicated (in thousands): Year Ended December 31, 2025 2024 Net cash generated from operating activities $ 75,908 $ 2,814 Net cash used in investing activities (16,045) (12,152) Net cash (used in)/ provided by financing activities (2,683) 37,589 Cash Flows from Operating Activities Net cash provided by operating activities was $75.9 million for the year ended December 31, 2025, an increase of $73.1 million compared to $2.8 million in 2024.
Discussions of 2022 items and year-to-year comparisons between 2022 and 2023 are not included in this Form 10-K, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Form 10-K filed on April 1, 2024.
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 are not included in this Form 10-K, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Form 10-K filed on March 31, 2025. Revenue We derive revenue from the sales of our electric battery products and components.
This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. The Business Microvast Holdings, Inc. is an advanced battery technology company, headquartered in Stafford, Texas, and publicly traded on the NASDAQ under the ticker symbol MVST.
This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. The Business Founded in 2006 and headquartered in Stafford, Texas, Microvast Holdings, Inc. (NASDAQ: MVST) is a global leader in advanced specialized battery technologies.
At the point of the loss recognition, a new, lower cost basis for those inventories is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis.
At the point of the loss recognition, a new, lower cost basis for those inventories is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. We monitor the inventory impairments periodically and, since battery technology continues to advance, we may incur inventory impairment losses in the future.
Internal Control Over Financial Reporting The information required by this Item regarding internal control over financial reporting is set forth in Part II, Item 9A of this Annual Report. 69 Table of Contents Recent Accounting Pronouncements See Note 2 to the audited consolidated financial statements beginning on page F-14 of this Annual Report for more information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one, of their potential impact on our financial condition and its results of operations and cash flows.
Recent Accounting Pronouncements See Note 2 to the consolidated financial statements beginning on page 84 of this Annual Report for more information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one, of their potential impact on our financial condition and its results of operations and cash flows.
See Note 26 for details. As of December 31, 2024, we were in compliance with all material terms and covenants of our loan agreements, credit agreements and bonds. On July 23, 2021, we received $708.4 million from the completion of the Business Combination, $705.1 million net of transaction costs paid by Microvast, Inc.
See Note 25 – Convertible loan measured at fair value for details. As of December 31, 2025, we were in compliance with all material terms and covenants of our loan agreements, credit agreements, and bonds. On July 23, 2021, we received $705.1 million in net proceeds from our Business Combination.
We have used $475.4 million of the net proceeds from the Business Combination to expand our manufacturing facilities and for the purchase of property and equipment associated with our existing manufacturing and R&D facilities. In addition, $185.6 million of the net proceeds were used for working capital as of December 31, 2024.
We have used $514.2 million of the net proceeds to expand our manufacturing facilities and for the purchase of property and equipment associated with our existing manufacturing and R&D facilities. In addition, $190.9 million of the net proceeds were used for general working capital.
As of December 31, 2024, such purchase commitments, which do not qualify for recognition on our consolidated balance sheets, amount to $48.2 million, most of which is short-term.
Purchase commitments We regularly enter into non-cancelable contractual obligations primarily related to purchases of inventory. As of December 31, 2025, such purchase commitments, which do not qualify for recognition on our consolidated balance sheets, amount to $37.2 million, most of which is short-term.
In light of operating requirements under our current business plan, we are projecting that the existing cash and assets available for sale and equity securities will not be sufficient to fund our operations through the next twelve months. These conditions and events raise substantial doubt about the our ability to continue as a going concern.
Based on our current business plan, we projected that existing cash and assets held for sale would not be sufficient to fund operations through the next twelve months. These conditions initially raised substantial doubt about our ability to continue as a going concern.
Our ability to control our raw materials costs is also dependent on our ability to negotiate with our suppliers for a better price and our ability to source raw materials from reliable suppliers in a cost-efficient manner. In addition, we expect that an increase in our sales volume will enable us to lower our manufacturing costs through economies of scale.
Our ability to control our raw materials costs is also dependent on our ability to negotiate with our suppliers for a better price and our ability to source raw materials from reliable suppliers in a cost-efficient manner.
While governmental economic incentives and mandates can drive market demand for the markets in which we operate and, as a result, battery systems and components, governmental economic incentives can always be gradually reduced or eliminated.
While governmental economic incentives 59 Table of Contents and mandates can drive market demand for the markets in which we operate and, as a result, battery systems and components, governmental economic incentives can always be gradually reduced or eliminated. These incentives are subject to evolving geopolitical dynamics, including Foreign Entity of Concern restrictions and domestic content requirements.
Accordingly, our effective tax rates will vary depending on the relative proportion of foreign to U.S. income, the absorption of foreign tax credits, changes in the valuation of our deferred tax assets and liabilities and changes in tax laws. We regularly assess the likelihood of adverse outcomes resulting from the examination of our tax returns by the U.S.
These foreign jurisdictions have statutory tax rates different from those in the U.S. Accordingly, our 62 Table of Contents effective tax rates will vary depending on the relative proportion of foreign to U.S. income, the absorption of foreign tax credits, changes in the valuation of our deferred tax assets and liabilities and changes in tax laws.
Additionally, our ESS products that were previously developed and assembled in Colorado are now planned to be assembled at our Tennessee facility once the facility is completed.
Additionally, our ESS products that were previously developed and assembled in Colorado are now planned to be assembled at our Tennessee facility once the facility is completed. The proceeds from the Business Combination alone will not be sufficient to complete the Clarksville expansion and meet our general working capital needs.
Income tax in China is generally calculated at 25% of the estimated assessable profit of our subsidiaries in China, except that two of our subsidiaries in China are qualified as “High and New Tech Enterprises” and thus enjoy a preferential income tax rate of 15%. The federal corporate income tax rate of 21% is applied for our U.S. entities.
Any such adjustments could have a significant impact on our results of operations. Income tax in China is generally calculated at 25% of the estimated assessable profit of our subsidiaries in China, except that two of our subsidiaries in China are qualified as “High and New Tech Enterprises” and receive a preferential income tax rate of 15%.
Financings As of December 31, 2024, we had bank borrowings of $111.7 million, the terms of which range from one month to two years. The interest rates of our bank borrowings ranged from 3.25% to 4.85% per annum. As of December 31, 2024, we had convertible bonds of $43.2 million, with interest rates ranging from 3% to 4%.
Financings As of December 31, 2025, our debt obligations consisted of: • Bank borrowings of $106.3 million, the terms of which range from 1 to 18 months. The interest rates of our bank borrowings ranged from 2.60% to 4.85% per annum. • Convertible bonds of $41.7 million, with interest rates ranging from 3% to 4%.
Our actual results could differ from these estimates. We believe the following critical accounting policies involve a higher degree of judgment and complexity than our other accounting policies. Therefore, these are the policies we believe are the most critical to understanding and evaluating our consolidated financial condition and results of operations.
Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates. We believe the following critical accounting policies involve a higher degree of judgment and complexity than our other accounting policies.
Internal Revenue Service and other tax authorities to determine the adequacy of our income tax reserves and expense. Should actual events or results differ from our current expectations, charges or credits to our income tax expense may become necessary. Any such adjustments could have a significant impact on our results of operations.
We regularly assess the likelihood of adverse outcomes resulting from the examination of our tax returns by the U.S. Internal Revenue Service and other tax authorities to determine the adequacy of our income tax reserves and expense. Should actual events or results differ from our current expectations, charges or credits to our income tax expense may become necessary.
In accordance with Accounting Standards Update ("ASU") No. 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40),” management has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date of the consolidated financial statements are issued and has determined that our ability to continue as a going concern is dependent on our ability to generate cash from future operations and additional capital.
Going Concern Evaluation In accordance with ASU No. 2014-15, management evaluated whether conditions and events, considered in the aggregate, raise substantial doubt about our ability to continue as a going concern within one year after the date these consolidated financial statements are issued.
Gross profit is equal to revenue less cost of revenues. Gross profit margin is equal to gross profit divided by revenue. 61 Table of Contents Operating Expenses Our operating expenses consist of selling and marketing, general and administrative (G&A), and research and development (R&D) expenses. Selling and marketing expenses.
Gross profit is equal to revenue less cost of revenues. Gross profit margin is equal to gross profit divided by revenue. Operating Expenses Our operating expenses consist of general and administrative expenses (“G&A”), research and development expenses (“R&D”), selling and marketing expenses (“S&M”), and impairment loss of long-lived assets. General and administrative expenses.
Selling and marketing expenses include personnel-related costs for our sales and marketing teams, including salaries, stock-based compensation, and commission-based incentives. These expenses also cover advertising, promotional activities, and customer engagement efforts to drive product awareness and sales growth. As we continue to expand, we plan to hire additional sales personnel, enhance marketing programs, and strengthen customer relationships.
These investments are critical to maintaining technological leadership and delivering next-generation battery solutions to the market. Selling and marketing expenses. S&M expenses include personnel-related costs for our sales and marketing teams, including salaries, stock-based compensation, and commission-based incentives. These expenses also cover advertising, promotional activities, and customer engagement efforts to drive product awareness and sales growth.
These policies expand our total addressable market, creating opportunities for increased sales and broader adoption of our battery technologies.
These policies expand our total addressable market, creating opportunities for increased sales and broader adoption of our battery technologies. However, changes in these incentives—such as reductions or eliminations of subsidies—could negatively affect demand for our products.
Cost of Revenue and Gross Profit Our cost of revenues for the year ended December 31, 2024, increased by 4.4% compared to 2023, primarily due to higher sales volumes.
Our full-year revenue was impacted by evolving regulatory shifts in the Korean market and customer platform ramp up delays. Cost of Revenue, Energy Storage System Impairment, and Gross Profit Our cost of revenues for the year ended December 31, 2025, increased by 4.9% compared to 2024, primarily due to higher sales volumes.
Research and Development Research and development expenses for the year ended December 31, 2024, decreased by $3.9 million (8.8%) compared to 2023. This reduction was primarily driven by a $5.0 million decrease in share-based compensation expenses, partially offset by a $1.8 million increase in personnel-related costs as we expanded our research team to support ongoing product development and innovation initiatives.
Research and development expenses Research and development expenses for the year ended December 31, 2025, decreased by $7.0 million, or 16.9%, compared to 2024. This reduction in R&D was primarily driven by a $5.5 million decrease in share-based compensation expenses.
Capital expenditures and other contractual obligations Our capital expenditures amounted to $49.9 million and $186.8 million for the years ended December 31, 2024 and 2023, respectively. Our capital expenditures in 2024 and 2023 related primarily to the construction of manufacturing facilities under our Clarksville expansion and Huzhou, China.
Capital Expenditures and Other Contractual Obligations Our capital expenditures amounted to $38.7 million and $49.9 million for the years ended December 31, 2025 and 2024, respectively.
The following table provides a breakdown of our revenue by major geographic regions, based on the locations of our customers, for the periods indicated: Year ended December 31, 2024 2023 (In thousands) (In thousands) Revenue % Revenue % China 127,138 33 % 156,480 51 % Other Asia & Pacific countries 50,558 13 % 62,653 21 % Asia & Pacific Region $ 177,696 46 % $ 219,133 72 % Europe 187,718 50 % 84,358 27 % U.S. 14,387 4 % 3,126 1 % Total $ 379,801 100 % $ 306,617 100 % We have historically derived a portion of our revenue in a given reporting period from a limited number of key customers, which have varied from period to period.
The following table provides a breakdown of our revenue by major geographic regions, based on the locations of our customers, for the periods indicated (in thousands, except percentages): Year ended December 31, 2025 2024 Revenue % Revenue % China $ 138,945 33 % $ 127,138 33 % India 34,568 8 % 48,767 13 % Other Asia & Pacific countries 2,754 1 % 1,791 — % Asia & Pacific Region 176,267 42 % 177,696 46 % Italy 92,941 22 % 150,809 40 % France 78,192 18 % 12,764 3 % Other European countries 40,811 9 % 24,145 7 % Europe 211,944 49 % 187,718 50 % U.S. 39,305 9 % 14,387 4 % Total $ 427,516 100 % $ 379,801 100 % 61 Table of Contents We have historically received a portion of our revenue in a given reporting period from a limited number of key customers, which have varied from period to period.
General and Administrative General and administrative expenses for the year ended December 31, 2024, decreased by $15.3 million (15.8%) compared to 2023. This decline was primarily driven by a $24.4 million reduction in share-based compensation expenses, partially offset by higher legal and insurance costs.
Operating Expenses General and administrative expenses General and administrative expenses for the year ended December 31, 2025, decreased by $23.7 million, or 29.0%, compared to 2024. This decline was primarily driven by a $17.4 million reduction in share-based compensation expenses and a favorable $8.6 million increased impact from foreign currency fluctuations related to the Euro and RMB.
We are seeking to secure financing to complete the Tennessee facility. Our future capital requirements will depend on many factors, including, but not limited to funding planned production capacity expansions and for general working capital. In addition, we may in the future enter into arrangements to acquire or invest in complementary businesses or technologies.
We are seeking alternate sources of capital to complete this facility and satisfy domestic content requirements for our U.S. customers. 66 Table of Contents Our future capital requirements will depend on many factors, including, but not limited to funding planned production capacity expansions and for general working capital.
However, this increase was significantly lower than the 23.9% year-over-year revenue growth, reflecting improved operational efficiency, cost controls, and economies of scale. 63 Table of Contents As a result, our gross profit margin expanded from 18.7% in 2023 to 31.5% in 2024. This improvement was driven by higher production utilization, which enhanced the absorption of fixed costs.
However, this increase was significantly lower than the 12.6% year-over-year revenue growth, reflecting improved utilization which enhanced the absorption of fixed costs, decreases in raw material costs, and improved economies of scale as we grow our manufacturing capacity. Our gross profit margin was 28.6% for the year ended December 31, 2025, compared to 31.5% in 2024.
As we scale operations, we anticipate additional expenditures for personnel hiring, infrastructure development, and compliance-related activities. These investments are necessary to support our anticipated growth and ensure operational efficiency. R&D expenses. primarily include salaries and stock-based compensation for our engineers and scientists, as well as raw material costs for experimental development, utility expenses, and depreciation costs related to R&D activities.
G&A expenses primarily comprise personnel-related costs for our executive, legal, finance, human resources, and IT teams, along with professional service fees, depreciation, amortization, and insurance costs. As we scale operations, we anticipate additional expenditures for personnel hiring, infrastructure development, and compliance-related activities. These investments are necessary to support our anticipated growth and operational efficiency. Research and development expenses.
Income Tax Expense We are subject to income taxes in the U.S. and the foreign jurisdictions in which we do business, namely China, Germany and the U.K. These foreign jurisdictions have statutory tax rates different from those in the U.S.
This section also includes interest expense associated with our debt financing arrangements, interest income earned on our cash balances and gain on debt restructuring. Income Tax Expense We are subject to income taxes in the U.S. and the foreign jurisdictions in which we do business, namely China, Germany and the U.K.
For additional information, see Note 17 – Leases, in the notes to the audited condensed consolidated financial statements in Part II, Item 8 of this Report on Form 10-K. 66 Table of Contents Purchase Commitments We regularly enter into non-cancelable contractual obligations primarily related to purchases of inventory.
Lease commitments We lease certain facilities and equipment under non-cancellable lease agreements that expire at various dates through 2036. For additional information, see Note 17 – Leases, in the notes to the consolidated financial statements in Part II, Item 8 of this Report on Form 10-K.
Segment Reporting and Financial Performance The Company evaluates segment performance based on revenue growth, operating income, and geographic breakdowns. In accordance with ASU 2023-07, we have expanded our segment disclosures to provide enhanced insights into key financial metrics.
In accordance with ASU 2023-07, we have expanded our segment disclosures to provide enhanced insights into key financial metrics in Note 23 – Segment Information. Segment Revenue and Performance Overview Geographical Revenue: Revenue contributions from North America, Europe, and Asia-Pacific reflect our diversified business strategy.
The fair value changes do not impact our cash position or operating performance but have a material effect on our reported net income. As of December 31, 2024 the outstanding balance was $104.6 million. Liquidity and Capital Resources Since inception, we have financed our operations primarily through capital contributions from equity holders, the issuance of convertible notes, and bank borrowings.
Liquidity and Capital Resources Overview Since inception, we have financed our operations primarily through capital contributions from equity holders, the issuance of convertible notes, and bank borrowings. As of December 31, 2025, our principal sources of liquidity included cash, cash equivalents, and restricted cash totaling $169.2 million, of which $105.0 million was comprised in cash and cash equivalents.
Based on the above, we concluded that it is probable that these plans will alleviate substantial doubt about the Group’s ability to continue as a going concern and that adequate sources of liquidity will exist to fund the working capital and capital expenditures requirements and to meet our short term debt obligations, and other liabilities and commitments as they become due.
Based on the execution of these plans, management has concluded it is probable that these actions will alleviate substantial doubt about the Company's ability to continue as a going concern and provide adequate liquidity to meet our requirements for the next twelve months. However, there is no assurance that the Company will be able to alleviate these concerns.
Cash Flows from Investing Activities During the year ended December 31, 2024, cash used in investing activities totaled $12.2 million, a significant reduction compared to previous years. This outflow was primarily driven by $27.7 million in capital expenditures related to the expansion of our manufacturing facilities and the acquisition of property and equipment for existing manufacturing and R&D operations.
This outflow was primarily driven by capital expenditures related to the expansion of our manufacturing facilities and the acquisition of property and equipment for existing manufacturing and R&D operations, partially offset by disposal of property, plant and equipment and short-term investments.
The amounts of and conditions attached to each subsidy were determined at the sole discretion of the relevant governmental authorities. Our subsidy income is non-recurring in nature.
The impairment loss is measured by the amount by which the carrying amount of the assets exceeds the fair value of the long-lived assets. Subsidy Income Government subsidies represent government grants received from local government authorities. The amounts of and conditions attached to each subsidy were determined at the sole discretion of the relevant governmental authorities.
Segment Revenue and Performance Overview Revenue Growth: The Company experienced a 24% increase in revenue for the most recent fiscal year, driven by strong regional market expansion and improved sales execution. Geographical Breakdown: Revenue contributions from North America, Europe, and Asia reflect our diversified business strategy.
Driven by the market expansion and improved sales execution, the Company experienced a 12.6% increase in revenue for the most recent fiscal year, with revenue in North America increasing by 173.2% and revenue in Europe increasing by 12.9%. Operating Performance: Key operational improvements in cost management and product optimization led to enhanced segment profitability.
Regulatory Landscape The battery industry is subject to stringent and evolving environmental regulations, particularly concerning hazardous waste management, pollution control, and sustainability requirements. Over time, these regulations have become increasingly strict, impacting both product costs and gross margins.
In addition, we expect that an increase in our sales volume will enable us to lower our manufacturing costs through economies of scale. 60 Table of Contents Regulatory Landscape The battery industry is subject to stringent and evolving environmental regulations, particularly concerning hazardous waste management, pollution control, and sustainability requirements.
As of December 31, 2024, we also had the convertible loan with shareholder of $104.6 million outstanding at an initial interest rate equal to Term SOFR for the applicable interest period, plus an initial applicable margin of 9.75% per 65 Table of Contents annum, 3.75% of which shall be paid in kind and added to the outstanding principal under the convertible loan with shareholder, with the remaining interest to be paid in cash.
The convertible bonds are due in 2027. • Convertible loan measured at fair value of $140.9 million. This loan bears interest at Term SOFR plus an applicable margin of 9.75%. Of this, 3.75% is paid in kind and added to the outstanding principal balance, and the remainder is paid in cash.
For the year ended December 31, 2024, the Company recognized $93.2 million impairment losses which is mainly from the impairment of long-lived assets in U.S. Subsidy Income Subsidy income increased from $2.0 million for the year ended December 31, 2023 to $2.7 million in the same period in 2024.
Selling and marketing expenses Selling and marketing expenses for the year ended December 31, 2025, decreased by $0.4 million, or 1.7%, compared to 2024. Impairment loss of long-lived assets The impairment loss of long-lived assets for the year ended December 31, 2025 decreased by $89.0 million, or 95.6%, compared to the same period in 2024.
Our expertise has driven advancements in ultra-fast charging, high energy density, long lifespan, and safety—critical factors for commercial transportation and ESS applications. We are expanding our production of battery systems and components, with an increased emphasis on ESS solutions to support the broader shift to electrification.
Our proprietary technology stack spans the entire battery system, including core cell materials (cathode, anode, electrolyte, and separator), cells, modules, packs, thermal management systems, and intelligent battery management systems. This end-to-end expertise has driven critical advancements in ultra-fast charging, high energy density, long cycle life, and safety, all critical factors for commercial transportation and ESS applications.
The surge in volume was fueled by strong demand for our battery cell products from both new and existing customers across the Asia-Pacific and European markets. As we broadened our geographic footprint and strengthened customer relationships, our ability to scale production and meet rising demand contributed to this sustained growth.
This expansion was primarily driven by a 16.5% increase in sales volume, rising from 1,613.6 MWh in 2024 to 1,879.5 MWh in 2025. This volume growth was supported by rising demand for our battery cell products from existing and new customers across the European and U.S. markets.
Changes in fair value of warrant liability and convertible loan For the year ended December 31, 2024, we recorded a non-cash loss of $80.0 million, primarily related to the change in the fair value of our convertible loan. This includes a $79.7 million fair value adjustment on the convertible loan issued to a shareholder.
Gain on Debt Restructuring During the year ended December 31, 2025, the Company recognized a gain of $1.3 million from negotiated settlements of payables. 64 Table of Contents Changes in Fair Value of Warrant Liability and Convertible Loan For the year ended December 31, 2025, we recognized a loss of $39.1 million.
The increase in financing activities in 2024 reflects our efforts to secure additional funding through bank borrowings and convertible loans, supporting ongoing operational and strategic initiatives. Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with U.S. GAAP.
The decrease was primarily due to a $29.8 million increase in repayments of bank borrowings and $15.8 million decrease in proceeds from bank borrowings, partially offset by net proceeds from sales of common stocks of $27.9 million. Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with U.S. GAAP.
In the third quarter of 2023, we successfully completed the 2 GWh cell, module and tray capacity expansion for our 53.5Ah cell technology in Huzhou, China. The demand for our 53.5Ah cell technology from our commercial vehicle customer base will be primarily met from this facility.
To address this demand, we have utilized our capital resources to strategically expand our global production capabilities. In 2023, we successfully completed the 2 GWh cell, module, and pack production line (Phase 3.1) for our 53.5Ah cell technology at our Huzhou, China facility. This Phase 3.1 line has been operating safely and efficiently, providing a stable manufacturing base.
We specialize in the design, development, and manufacturing of battery components and systems primarily for electric commercial vehicles and utility-scale energy storage systems ("ESS"). Founded in 2006, Microvast was built on a guiding principle that remains central to our mission today: to innovate lithium-ion battery designs without relying on past technologies. We call this true innovation.
Since our public listing in 2021, we have focused on delivering high-performance lithium-ion battery solutions for the next generation of commercial and industrial electrification. We specialize in the design, development, and manufacturing of battery components and systems primarily for electric commercial vehicles and energy storage systems (“ESS”).
For the year ended December 31, 2024, our revenue increased by $73.2 million, reaching $379.8 million, a 24% year-over-year increase. Additionally, our order backlog stood at $401.3 million, with the majority of these orders expected to be fulfilled in 2025 and 2026.
Management has implemented several primary plans intended to alleviate these conditions: • Operating Cash Flows : For the year ended December 31, 2025, we generated $75.9 million in net cash from operating activities. Our order backlog stood at $196.1 million, the majority of which is expected to be fulfilled in 2026 and 2027.
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We started without preconceived notions of lithium-ion battery creation, unlike many companies that repurposed legacy technologies for new markets like electric vehicles – a process we consider product development rather than true innovation. To understand this difference is to understand what we have set out to achieve.
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Our guiding principle is to innovate lithium-ion battery designs from the ground up without relying on legacy technologies. We believe that this approach allows us to create purpose-built solutions for new markets, rather than repurposing existing ones. Our mission is to become a leader in U.S. domestic battery production, reducing reliance on overseas suppliers, and strengthening national energy independence.
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Our mission is to accelerate the global transition to electrification by delivering innovative battery solutions that support the adoption of electric vehicles and renewable energy. A key strategic focus is to be in a position to lead U.S. domestic battery production, reducing reliance on overseas suppliers, and strengthening national energy independence.
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We believe that this mission, along with our engineering expertise, vertically integrated business model, and our focus on continuous investment in our research and development and operations, differentiates us from competitors and positions us for long-term revenue and income growth. We employ a vertically integrated approach, which we believe provides a competitive advantage in optimizing performance and cost.
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We believe continuous investment in our technology and operations will deliver long-term targeted revenue and income growth. Through a vertically integrated approach, we have developed proprietary technologies spanning the entire battery system—from the core materials of a battery cell (cathode, anode, electrolyte, separator) to thermal management systems and advanced software controls.
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With significant in-house capabilities in design, testing, and R&D, we continue to build an industry-leading body of knowledge in battery chemistry and performance. Our Strategy Our objective is to drive long-term stakeholder value by scaling our proprietary battery technologies across high-growth sectors.
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Our goal is to become a global leader in ESS, bridging the gap between EVs and renewable energy. One of our recent innovations is our high-energy nickel manganese cobalt ("NMC") 53.5 ampere-hour battery cell (the “53.5Ah”). We believe its advanced performance characteristics make it an optimal solution for both commercial vehicle and ESS applications.
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Since 2008, our research and development efforts have been dedicated to pioneering cutting-edge battery technologies that offer ultra-fast charging, extended cycle life, high energy density, and enhanced safety. Our commitment to innovation has well positioned us developing the next-generation lithium-ion batteries. We are focused on designing battery technologies for electric commercial vehicles and ESS.
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To bring this product to market, we have made substantial investments in capacity expansion in Huzhou, China, where we operate fully automated production equipment that delivers significant operational efficiencies. 57 Table of Contents In previous years, we made significant investments in our capacity expansion in Clarksville, Tennessee and by the fourth quarter of 2023 had started to install certain sections of the production line.
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Our solutions empower industries to transition to cleaner, more efficient power sources, unlocking new levels of performance, longevity, and cost efficiency. Historically, demand for electric commercial vehicle batteries was concentrated in the Asia & Pacific regions. We are now working towards a balanced global strategy throughout EMEA and North America.
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However, progress on certain third party construction workstreams as well as taking delivery and possession of further equipment started to be impacted toward the end of the fourth quarter of 2023 due to the required funding to complete the project not being secured.
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As customer demand for our products and services has grown in Europe and the U.S., we have expanded to meet these growth opportunities. We continue to invest in our operations in Asia-Pacific to capitalize on regional growth. This provides a balanced global strategy while maintaining strong partnerships with OEMs in high-demand markets.
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Ultimately, in the second quarter of 2024, we paused construction efforts on the Clarksville development due to insufficient funding. We made a strategic decision to pivot from the originally planned production of NMC production in Clarksville, Tennessee to the 565Ah lithium iron phosphate ("LFP") battery.
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We have primarily supplied our battery solutions to OEMs for use in electric commercial and specialty vehicles. We are continuously advancing our battery technologies to improve performance, efficiency, and reliability in commercial applications. 58 Table of Contents We believe the energy storage industry is positioned for continued expansion.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAt present, we do not utilize foreign exchange hedging instruments, but we may consider implementing derivative or financial instruments in the future to mitigate currency risk. However, the potential impact of such hedging activities on our financial performance remains uncertain. Credit Risk Our credit risk primarily relates to trade receivables, restricted cash, cash equivalents, and amounts due from related parties.
Biggest changeWhile we may evaluate the use of hedging instruments in the future, there can be no assurance that such strategies will effectively mitigate our exposure or that the cost of such instruments will not outweigh their benefits. Credit Risk Our credit risk primarily relates to trade receivables, restricted cash, cash equivalents, and amounts due from related parties.
Our bonds payable bear fixed interest rates and are not publicly traded, limiting exposure to interest rate volatility. However, our project finance loans in China include an interest rate spread of 115 basis points over the Loan Prime Rate (LPR) in China, making them sensitive to market interest rate changes.
Our bonds payable bear fixed interest rates and are not publicly traded, limiting exposure to interest rate volatility. However, our project finance loans in China include an interest rate spread of 115 basis points over the Loan Prime Rate in China, making them sensitive to market interest rate changes.
However, due to our relatively limited operating history, it remains difficult to determine the exact extent or nature of seasonality in our business. We continue to monitor sales trends and market conditions to better understand the potential impact of seasonal demand fluctuations on our operations. 71 Table of Contents
However, due to our relatively limited operating history, it remains difficult to determine the exact extent or nature of seasonality in our business. We continue to monitor sales trends and market conditions to better understand the potential impact of seasonal demand fluctuations on our operations. 70 Table of Contents
If necessary, we negotiate revised payment terms or settlement plans with customers facing financial difficulties. 70 Table of Contents Given our robust credit risk management practices, we consider our overall credit risk exposure to be significantly mitigated. Seasonality Historically, we have observed higher sales volumes in the third and fourth fiscal quarters, compared to the first and second quarters.
If necessary, we negotiate revised payment terms or settlement plans with customers facing financial difficulties. Given our robust credit risk management practices, we consider our overall credit risk exposure to be significantly mitigated. Seasonality Historically, we have observed higher sales volumes in the third and fourth fiscal quarters, compared to the first and second quarters.
Holding other factors constant, a hypothetical 100-basis-point increase in the expected loss rate on our financing receivables portfolio would have resulted in an increase in the allowance for credit losses of approximately $0.6 million as of December 31, 2024.
Holding other factors constant, a hypothetical 100-basis-point increase in the expected loss rate on our financing receivables portfolio would have resulted in an increase in the allowance for credit losses of approximately $0.8 million as of December 31, 2025.
We have experienced, and will likely continue to experience, fluctuations in our operating results due to foreign exchange gains and losses. These fluctuations arise from the translation of cash balances, trade accounts receivable and payable, and intercompany balances denominated in currencies other than the U.S. Dollar, primarily RMB.
The volatility of exchange rates is influenced by macroeconomic factors and government policies, which may result in significant fluctuations in our operating results. Our foreign exchange gains and losses primarily arise from the translation of cash balances, trade accounts receivable and payable, and intercompany balances denominated in currencies other than the U.S. Dollar.
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Foreign Currency Risk Given our significant operational presence in China, a large portion of our transactions is denominated in RMB. The volatility of exchange rates is influenced by multiple macroeconomic factors, making it difficult to predict future fluctuations with certainty.
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Foreign Currency Risk We are exposed to foreign currency risk as a result of our significant sales and operational presence in China and our sales activities within the EMEA region. Consequently, a substantial portion of our transactions and monetary assets are denominated in the Chinese Renminbi and the Euro.
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A hypothetical 10% adverse change in foreign exchange rates for RMB-denominated accounts as of December 31, 2024, including intercompany balances, would have resulted in a foreign currency loss of approximately $15.2 million. As our foreign sales and expenses increase, our operating results may be further impacted by exchange rate fluctuations.
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To assess our exposure, we considered the historical trends in foreign currency exchange rates and determined that it is reasonably possible that adverse changes in foreign currency exchange rates of 10% for all currencies could be experienced in the near-term.
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These changes were applied to our total monetary assets and liabilities denominated in currencies other than our local currencies at the balance sheet date to compute the impact these changes would have had on our net income before income taxes.
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These changes would have resulted in a loss of $17.6 million at December 31, 2025. 69 Table of Contents At present, we do not utilize derivative financial instruments to hedge our exposure to foreign currency risk.

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