10q10k10q10k.net

What changed in Cenntro Inc.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of Cenntro Inc.'s 2023 and 2024 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 2024 report.

+431 added−391 removedSource: 10-K (2025-04-01) vs 10-K (2024-04-01)

Top changes in Cenntro Inc.'s 2024 10-K

431 paragraphs added · 391 removed · 290 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

110 edited+45 added−53 removed155 unchanged
Biggest changeAs of the date of this report, over 25 countries have made announcements regarding their intention to phase out ICE vehicles include the following: • China: End production and sales of ICE vehicles by 2040; • France: Ban the sale of ICE cars by 2040; • Germany: No registration of ICE vehicles by 2030 (passed by legislature); cities can ban diesel cars; • India: Official target of no new ICE vehicles sold after 2030; Incentive program in place for EV sales; • Japan: Incentive program in place for EV sales; and • United Kingdom: Ban the sale of new ICE cars starting in 2030. 9 Table of Contents In the United States, the Biden administration announced plans to put the United States on a path to achieve net-zero emissions, economy-wide, by no later than 2050.
Biggest changeAs of the date of this report, over 25 countries have made announcements regarding their intention to phase out ICE vehicles include the following: • China: Plans for battery-electric, hybrid, and fuel cell vehicles to constitute 20% of new car sales by 2025 and a majority by 2035; • France: Aims to phase out ICE vehicle sales by 2040; • Germany: No registration of ICE vehicles by 2035 (aligns with the EU’s regulations); cities can ban diesel cars; • India: 30% of vehicle sales to be electric by 2030, with incentive programs in place; • Japan: Incentive program in place for EV and hybrids sales; and • United Kingdom: Ban the sale of new ICE cars starting in 2035. 9 Table of Contents In the United States, the former Biden administration announced plans to achieve net-zero emissions economy-wide by 2050.
In the long-term, through our deep supply chain development know-how, we plan to geographically expand our supply chain to support our planned growth.
In the long-term, through our deep supply chain development know-how, we plan to geographically expand our supply chain to support our planned growth.
More specifically, we intend to establish supply chain relationships in North America and the European Union to support our manufacturing and assembly needs in these markets, thereby reducing the time in transit and potentially the duties associated with importing our components and spare parts from China.
More specifically, we intend to establish supply chain relationships in North America and the European Union to support our manufacturing and assembly needs in these markets, thereby reducing the time in transit and potentially the duties associated with importing our components and spare parts from China.
Our suppliers must demonstrate that they can consistently deliver their specialized parts on time, while meeting our quality and product specifications. Many of our components are based on Cenntro-developed designs, and our suppliers are contractually restricted from selling our customized components to any third parties unless we discontinue our purchases from such suppliers.
Our suppliers must demonstrate that they can consistently deliver their specialized parts on time, while meeting our quality and product specifications. Many of our components are based on Cenntro-developed designs, and our suppliers are contractually restricted from selling our customized components to any third parties unless we discontinue our purchases from such suppliers.
Peter Wang was the founder and sole director of CMC. CMC conducted business to design and develop electric utility vehicles. On January 28, 2014, Cenntro Automotives Group Limited (“CAG BVI”) was formed in British Virgin Islands to conduct electric vehicle related business worldwide outside of U.S.A. On January 29, 2014, CAG BVI acquired CMC.
Peter Wang was the founder and sole director of CMC. CMC conducted business to design and develop electric utility vehicles. On January 28, 2014, Cenntro Automotives Group Limited (“CAG BVI”) was formed in British Virgin Islands to conduct electric vehicle (“EV”) related business worldwide outside of U.S.A. On January 29, 2014, CAG BVI acquired CMC.
Our business to date has began to expand beyond Metro® into five other categories of ECV models to expand our reach in the global ECV market. We believe we are well positioned to take advantage of the growing global ECV market, which has few mature competitors capable of manufacturing and delivering cost-effective and financially viable ECVs today.
Our business has began to expand beyond Metro® into five other categories of ECV models to expand our reach in the global ECV market. We believe we are well positioned to take advantage of the growing global ECV market, which has few mature competitors capable of manufacturing and delivering cost-effective and financially viable ECVs today.
To Regionalize Manufacturing and Supply Chain We plan to regionalize the manufacturing and supply chain relating to certain key components of our ECVs, such as vehicle upfitting and battery packs, in the geographic markets in which our ECVs are sold.
To Regionalize Manufacturing and Supply Chain We regionalize the manufacturing and supply chain relating to certain key components of our ECVs, such as vehicle upfitting and battery packs, in the geographic markets in which our ECVs are sold.
Additionally, the LMH864 has an operational range and refueling time comparable to many diesel trucks making it suitable for longer distances and heavy, energy-intensive responsibilities in areas where battery charging is limited. The LMH864 prototype model represents an additional zero emissions product choice from Cenntro that is performance-heavy despite also being a sustainable vehicle.
Additionally, the LM860H has an operational range and refueling time comparable to many diesel trucks making it suitable for longer distances and heavy, energy-intensive responsibilities in areas where battery charging is limited. The LM860H prototype model represents an additional zero emissions product choice from Cenntro that is performance-heavy despite also being a sustainable vehicle.
Throughout 2022 we began to re-align our distribution and marketing strategy away from relying mainly on third-party channel partners to a distribution model that combines wholly-owned EV Centers with local dealers in order to improve overall operational efficiencies, product quality, brand value, market share, customer support and service.
Throughout 2022 we began to re-align our distribution and marketing strategy away from relying mainly on third-party channel partners to a distribution model that combines wholly-owned EV Centers with local distribution channels in order to improve overall operational efficiencies, product quality, brand value, market share, customer support and service.
LS100, LS200, and LS260 meet with European Union regulatory requirement and are mainly targeted for European markets, and LS300 and LS400 meet with U.S. regulatory requirements and are mainly targeted for North American markets. The Logistar™ 400 is a medium-duty electric commercial truck designed to meet the delivery requirements of tier 1 logistics companies as well as upfitters.
LS100, LS200, LS210, and LS260 meet with European Union regulatory requirement and are mainly targeted for European markets, and LS300, LS400 and LS450 meet with U.S. regulatory requirements and are mainly targeted for North American markets. The Logistar™ 400 is a medium-duty electric commercial truck designed to meet the delivery requirements of tier 1 logistics companies as well as upfitters.
During 2022, we began to establish a hybrid distribution model that combines our EV Centers, established dealers with select channel partners. During 2023, we established eleven EV centers mainly in the US and the EU and cooperate with few channel partners in selected strategic markets, such as Japan in east-Asia.
During 2022, we began to establish a hybrid distribution model that combines our EV Centers, established dealers with select channel partners. Throughout 2023, we opened eleven EV centers mainly in the US and the EU and cooperate with few channel partners in selected strategic markets, such as Japan in east-Asia.
(“Zhejiang Sinomachinery”). Sinomachinery Equipment Limited was renamed Simachinery Equipment Limited on November 2, 2015. Zhejiang Sinomachinery registered Zhejiang Xbean Tech Co. Ltd. in PRC on December 28, 2016. On August 22, 2014, Cenntro Motors Group Limited was formed in Cayman Islands, which was renamed as Cenntro Automotive Group Limited (“CAG Cayman”) on October 15, 2014.
Sinomachinery Equipment Limited was renamed Simachinery Equipment Limited on November 2, 2015. Zhejiang Sinomachinery registered Zhejiang Xbean Tech Co. Ltd. in PRC on December 28, 2016. On August 22, 2014, Cenntro Motors Group Limited was formed in Cayman Islands, which was renamed as Cenntro Automotive Group Limited (“CAG Cayman”) on October 15, 2014.
On November 5, 2021, our predecessor Naked Brand Group Limited (“NBG”) entered into an acquisition agreement with CAG to effect a combination through reverse merger which occurred on December 30, 2021 (the “Combination”), whereby NBG purchased the Cenntro Shares to effect the Combination using 174,853,546 ordinary shares (the “Acquisition Shares”) serving as good and valuable consideration.
On November 5, 2021, our predecessor Naked Brand Group Limited (“NBG”) entered into an acquisition agreement with Cenntro Automotive Group Limited (“CAG”) to effect a combination through reverse merger which occurred on December 30, 2021 (the “Combination”), whereby NBG purchased ordinary shares of CAG to effect the Combination using 174,853,546 ordinary shares (the “Acquisition Shares”) serving as good and valuable consideration.
As of December 31, 2023, we have developed six series of commercial vehicle models, Metro®, Logistar™, Logimax™, Avantier™, Teemak™ and Antric One. We have successfully begun to produce and deliver these models into the global markets, apart from Logimax™.
As of December 31, 2024, we have developed six series of commercial vehicle models, Metro®, Logistar™, Logimax™, Avantier™, Teemak™ and Antric One. We have successfully begun to produce and deliver these models into the global markets, apart from Logimax™.
The lithium-ion batteries used in our ECVs have a useful life of approximately 2,000 charge-cycles, with each charge providing for a range, in the case of the Metro®, of approximately 124 miles per charge for a total range of approximately 248,400 miles over a battery’s useful life.
The lithium-ion batteries used in our ECVs have a useful life of approximately 3,000 charge-cycles, with each charge providing for a range, in the case of the Metro®, of approximately 124 miles per charge for a total range of approximately 248,400 miles over a battery’s useful life.
We believe successful vehicle development will put us in a position to become a leading ECV provider who offers a full line of electric and hydrogen powered commercial vehicles. Vehicle Charger Development We have developed level 2 AC chargers (7kw/10kw) and level 3 DC chargers (120kw), which have received EU CE and US ETL certificates.
We believe successful vehicle development will put us in a position to become a leading Greener Energy Commercial Vehicle provider who offers a full line of electric and hydrogen powered commercial vehicles. Vehicle Charger Development We have developed level 2 AC chargers (7kw/10kw) and level 3 DC chargers (120kw), which have received EU CE and US ETL certificates.
EV Centers) to replace Channel Partner Network in selected countries Until the end of 2021, we outsourced the majority of distribution and marketing for our vehicles to third party “channel partners”. Similarly, we substantially relied on private label channel partners to assemble the Metro® from vehicle kits that we manufactured in our China-based facilities.
EV Centers) to Rebalance our Distribution Network in selected countries Until the end of 2021, we outsourced the majority of distribution and marketing for our vehicles to third party “channel partners”. Similarly, we substantially relied on private label channel partners to assemble the Metro® from vehicle kits that we manufactured in our China-based facilities.
CMC changed its name from “Cenntro Motor Corporation” to “Cenntro Motors Corporation” on August 5, 2014, and further changed from “Cenntro Motors Corporation” to “Cenntro Automotive Corporation” (“CAC”) on October 7, 2014. 6 Table of Contents On July 20, 2015, CAG BVI acquired Sinomachinery Equipment Limited, a Hong Kong corporation with its manufacturing subsidiary in PRC, Zhejiang Sinomachinery Co., Ltd.
CMC changed its name from “Cenntro Motor Corporation” to “Cenntro Motors Corporation” on August 5, 2014, and further changed from “Cenntro Motors Corporation” to “Cenntro Automotive Corporation” on October 7, 2014. 6 Table of Contents On July 20, 2015, CAG BVI acquired Sinomachinery Equipment Limited, a Hong Kong corporation with its manufacturing subsidiary in PRC, Zhejiang Sinomachinery.
In addition to our investment in battery-technology, we have established an asset-light, distributed manufacturing business model through which we may distribute our vehicles in unassembled semi-knockdown vehicle kits (“vehicle kits”) for local assembly in addition to fully assembled vehicles.
In addition to our investment in battery packing operations, we have established an asset-light, distributed manufacturing business model through which we may distribute our vehicles in unassembled semi-knockdown vehicle kits (“vehicle kits”) for local assembly in addition to fully assembled vehicles.
To Brand our Global Market Sales and After Sales Support Network via our EV Centers Our manufacturing model has traditionally relied on developing supply chain relationships with component vendors and specifically through a network of third-party supply partners. From 2022 onwards we shifted our focus from solely investing in our own manufacturing capabilities to a contract manufacturing strategy.
To Brand our Global Market Sales and After Sales Support Network via our Distribution Channels Our manufacturing model has traditionally relied on developing supply chain relationships with component vendors and specifically through a network of third-party supply partners. From 2022 onwards we shifted our focus from solely investing in our own manufacturing capabilities to a contract manufacturing strategy.
All of our patents are granted under PRC law and have not been given reciprocal treatment and protection under the laws of either the United States or the European Union. Our issued patents will begin to expire in April 2024. We intend to continue to file additional patent applications with respect to our innovation and know-how.
All of our patents are granted under PRC law and have not been given reciprocal treatment and protection under the laws of either the United States or the European Union. Our issued patents will begin to expire in August 2026. We intend to continue to file additional patent applications with respect to our innovation and know-how.
Currently, parts, accessories and special repair tools for all Cenntro vehicles can be ordered through the PARDISYS system, and the back-office will provide the optimal distribution plan according to the customer's delivery address and warehouse inventory. PARDISYS consists of two source warehouses - Changxing Warehouse and Zhenjiang Warehouse, and two fulfilment warehouses in New Jersey, United States and Düsseldorf, Germany.
Currently, parts, accessories and special repair tools for all Cenntro vehicles can be ordered through the PARDISYS system, and the back-office will provide the optimal distribution plan according to the customer's delivery address and warehouse inventory. PARDISYS consists of two source warehouses - Changxing Warehouse and Zhenjiang Warehouse, and two fulfilment warehouses in New Jersey, United States and Barcelona, Spain.
Logistar™ Series Logistar™ Series are the vehicles for on-road applications with the gross vehicle weight rate (“GVWR”) under 19,500 lbs. It consists of Logistar 100 (LS100), Logistar 200 (LS200), Logistar 260 (LS260), Logistar 300 (LS300), and Logistar 400 (LS400).
Logistar™ Series Logistar™ Series are the vehicles for on-road applications with the gross vehicle weight rate (“GVWR”) under 19,500 lbs. It consists of Logistar 100 (LS100), Logistar 200 (LS200), Logistar 210 (LS210), Logistar 260 (LS260), Logistar 300 (LS300), Logistar 400 (LS400), and Logistar 450 (LS450).
Our distributed manufacturing model allows us to focus our efforts on the design of ECV models and related technologies while outsourcing various portions of the manufacturing, assembly and marketing of our vehicles to qualified third parties, allowing the Company to operate with lower capital investment than traditional vertically integrated automotive companies.
Our distributed manufacturing model allows us to focus our efforts on the design of New Energy Vehicle (NEV) models and related technologies while outsourcing various portions of the manufacturing, assembly and marketing of our vehicles to qualified third parties, allowing the Company to operate with lower capital investment than traditional vertically integrated automotive companies.
To Emerge as a Key Developer of Autonomous Driving Solutions We intend to continue to invest in our smart driving technology to develop more applications using our iChassis platforms. We have developed the ePortee™, which we also refer to as the Cenntro iChassis, an open-platform and programmable vehicle chassis with digital control capabilities.
To Emerge as a Key Developer of Autonomous Driving Solutions We intend to continue to invest in our smart driving technology to develop more applications using our iChassis platforms. We have developed Cenntro iChassis, an open-platform and programmable vehicle chassis with digital control capabilities.
We sold 303 iChassis in 2023. 12 Table of Contents Our Product Development and Manufacturing Process Our capability of vehicle development is at the core of what we believe positions us to effectively compete in the ECV market.
We sold 911 iChassis in 2024. 12 Table of Contents Our Product Development and Manufacturing Process Our capability of vehicle development is at the core of what we believe positions us to compete effectively in the ECV market.
We manufacture our own vehicle kits for the Metro® in our facilities in China and leverage the economies of scale of and the supply-chain availability in China to manufacture vehicle kits and fully assembled vehicles in our assembly plants in United States and Germany.
We manufacture our own vehicle kits for the Metro® Teemak Series, and iChassis Series in our facilities in China and leverage the economies of scale of and the supply-chain availability in China to manufacture vehicle kits and fully assembled vehicles in our assembly plants in United States in United States.
In addition to our significant know-how, as of December 31, 2023, we had 122 discovery patents, nine design patents and 86 innovation patents granted by the Chinese Patent Office, four design patent applications and ten discovery patent applications pending in the Chinese Patent Office, covering our technological innovations relating to power systems, vehicle electronics, vehicle control and structure, production processes and other new technologies. 21 Table of Contents Our technological advantage begins with our chassis designs, which promote efficiencies in energy consumption as well as development and manufacturing processes.
In addition to our significant know-how, as of December 31, 2024, we had 125 discovery patents, 10 design patents and 86 innovation patents granted by the Chinese Patent Office, three design patent applications and three discovery patent applications pending in the Chinese Patent Office, covering our technological innovations relating to power systems, vehicle electronics, vehicle control and structure, production processes and other new technologies. 21 Table of Contents Our technological advantage begins with our chassis designs, which promote efficiencies in energy consumption as well as development and manufacturing processes.
To this end, we work closely with proven tier one suppliers for components and parts in order for the Company to utilize a less capital intensive path to product development. Correspondingly, we also re-aligned our distribution model from a majority of channel partners and country importers to building our own branded local EV Centers.
To this end, we work closely with proven suppliers for components and parts in order for the Company to utilize a less capital-intensive path to product development. Correspondingly, we also re-aligned our distribution model from a majority of channel partners and country importers to a hybrid approach combining building our own branded local EV Centers with developing our distribution channels.
Since inception in 2013 through December 31, 2023, we have spent approximately USD$90 million in research and development activities related to our operations, developing various technologies and products, including the following: Vehicle Development We have allocated resources and efforts for vehicles that we believe the market demands.
Since inception in 2013 through December 31, 2024, we have spent approximately USD94.4 million in research and development activities related to our operations, developing various technologies and products, including the following: Vehicle Development We have allocated resources and efforts for vehicles that we believe the market demands.
Our Products As an electric commercial vehicle (“ECV”) provider, we have developed a full line of vehicle models to meet the market demand and fit various commercial needs and applications. As of the date of this report, we offer six series of commercial vehicle models that are ready to be sold on the global markets apart from Logimax™.
Our Products As an electric commercial vehicle (“ECV”) provider, we have developed a full line of vehicle models to meet the market demand and fit various commercial needs and applications. As of the date of this report, we offer five series of commercial vehicle models and some electric charged products that are ready to be sold on the global markets.
We anticipate the advanced version of the Antric One to be less expensive to produce while maintaining its high quality. We intend to include new features to this second generation Antic One that will make riding easier and more comfortable.
The production of our advanced version of the Antric One commenced in February 2024. We anticipate the advanced version of the Antric One to be less expensive to produce while maintaining its high quality. We intend to include new features to this second generation Antic One that will make riding easier and more comfortable.
The mitigation of greenhouse gas emissions from ICE vehicles is an integral part of various nations’ strategies to meet the objectives of the 2015 Paris Agreement, which the United States rejoined in February 2021.
The mitigation of greenhouse gas emissions from internal combustion engine (“ICE”) vehicles is an integral part of various nations’ strategies to meet the objectives of the 2015 Paris Agreement, which the United States rejoined in February 2021.
Since inception in 2013 through December 31, 2023, we have spent approximately $90.0 million in research and development activities related to our business. Specifically, we have developed new vehicle chassis structures and digital control, smart driving and network connectivity capabilities.
Since inception in 2013 through December 31, 2024, we have spent approximately $94.4 million in research and development activities related to our business. Specifically, we have developed new vehicle chassis structures and digital control, smart driving and network connectivity capabilities.
Our Employees As of the date hereof, we have 315 full-time employees.
Our Employees As of the date hereof, we have 260 full-time employees.
On February 15, 2016, CAG Cayman formed its subsidiary, Cenntro Automotive (Hong Kong) Limited (“CAG HK”) in Hong Kong. On March 2, 2016, CAG HK changed its name to “Cenntro Automotive Group Limited”. Subsequently CAG HK took over all Hong Kong and mainland China subsidiaries of CAG Cayman. On May 6, 2015, CAG HK registered Hangzhou Cenntro Autotech Co., Ltd.
On February 15, 2016, CAG Cayman formed its subsidiary, CAG HK (formerly Cenntro Automotive (Hong Kong) Limited), in Hong Kong. On March 2, 2016, CAG HK changed its name to “Cenntro Automotive Group Limited”. Subsequently CAG HK took over all Hong Kong and mainland China subsidiaries of CAG Cayman. On May 6, 2015, CAG HK registered Autotech in PRC.
We have subcontracted all manufacturing processes of the ECV components for our Logistar™ and Neibor® series and Teemak™ model to our qualified suppliers, allowing us to further reduce our capital expenditure requirements and increase our focus on local assembly.
We have subcontracted all manufacturing processes of the ECV components for our Logistar™ and Avantier models to our qualified suppliers, allowing us to further reduce our capital expenditure requirements and increase our focus on local assembly.
We manufacture our own vehicle kits in our facilities in China where we leverage the economies of scale coupled with our matured supply-chain to efficiently manufacture vehicle kits. Under our OEM manufacturing model, we contracted well established third-party automobile manufacturers, such as Dongfeng Motors Corporation, Chery, and Beijing Auto, to manufacture vehicle kits and completed vehicles for us.
We manufacture our own vehicle kits in our facilities in China where we leverage the economies of scale coupled with our mature supply-chain to efficiently manufacture vehicle kits. Under our OEM manufacturing model, we contracted well established third-party automobile manufacturers, such as Seres, Chery, and JMC, to manufacture vehicle kits and completed vehicles for us.
(“Autotech”) in PRC. On May 26, 2016, CAG Cayman merged with CAG BVI and CAG Cayman being the surviving entity. After the merger, all shareholders of CAG BVI automatically became the shareholders of CAG Cayman and the percentage of ownership unchanged. CAG Cayman inherited and took over all existing rights, assets and liabilities of CAG BVI.
On May 26, 2016, CAG Cayman merged with CAG BVI and CAG Cayman being the surviving entity. After the merger, all shareholders of CAG BVI automatically became the shareholders of CAG Cayman and the percentage of ownership unchanged. CAG Cayman inherited and took over all existing rights, assets and liabilities of CAG BVI. Subsequently CAG BVI was closed and cancelled.
Prior to June 30, 2022, the Company historically qualified as a ‘foreign private issuer’ for purposes of reporting under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and filing registration statements under the Securities Act of 1933, as amended (the “Securities Act”).
Prior to June 30, 2022, the Company historically qualified as a ‘foreign private issuer’ for purposes of reporting under the Exchange Act and filing registration statements under the Securities Act.
Manufacturing We have established an asset-light manufacturing business model under both a distributed manufacturing model and original equipment manufacturing (“OEM”) model. Our distributed manufacturing model focuses on the production of semi-knock down vehicle kits from our centralized manufacturing facilities which are then distributed for local final assembly.
It will be guaranteed that the charger will work with our vehicle seamlessly. Manufacturing We have established an asset-light manufacturing business model under both a distributed manufacturing model and original equipment manufacturing (“OEM”) model. Our distributed manufacturing model focuses on the production of semi-knock down vehicle kits from our centralized manufacturing facilities which are then distributed for local final assembly.
The following table sets forth the number of our employees by function: Functional Area Number of Employees Senior management 7 Research and Development 64 Supply Chain Operations 36 Marketing 37 Manufacturing 77 Quality Assurance 27 Finance 25 Corporate Affairs 42 Total 315 We provide social insurance for each employee in accordance with Chinese law, including pension insurance, medical insurance, unemployment insurance, work injury insurance and maternity insurance and housing provident fund.
The following table sets forth the number of our employees by function: Functional Area Number of Employees Senior management 5 Research and Development 64 Supply Chain Operations 30 Marketing 29 Manufacturing 58 Quality Assurance 20 Finance 25 Corporate Affairs 29 Total 260 We provide social insurance for each employee in accordance with Chinese law, including pension insurance, medical insurance, unemployment insurance, work injury insurance and maternity insurance and housing provident fund.
Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year. Total restrictions placed on the distribution of the Company’s PRC subsidiaries’ net assets were approximately $66.6 million, or 54.6% of the Company’s total consolidated net assets as of December 31, 2023.
Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year. Total restrictions placed on the distribution of the Company’s PRC subsidiaries’ net assets were approximately $53.3 million, or 68.4% of the Company’s total consolidated net assets as of December 31, 2024.
On March 9, 2023, Cenntro Inc. was incorporated under the laws of the state of Nevada. On February 27, 2024, pursuant to the Redomiciliation CEGL became a wholly-owned subsidiary of Cenntro Inc.
On August 24, 2023, CEGI incorporated its wholly-owned subsidiary, CTC, in the state of California. On March 9, 2023, Cenntro Inc. was incorporated under the laws of the state of Nevada. On February 27, 2024, pursuant to the Redomiciliation CEGL became a wholly-owned subsidiary of Cenntro Inc.
As of December 31, 2023, we had 122 discovery patents, nine design patents and 86 innovation patents granted by the Chinese Patent Office, and seven innovation patent applications, four design patent applications and ten discovery patent applications pending in the Chinese Patent Office, covering our technological innovations relating to power systems, vehicle electronics and structure, production processes and other new technologies.
As of December 31, 2024, we had 125 discovery patents, 10 design patents and 86 innovation patents granted by the Chinese Patent Office, and three innovation patent applications and three discovery patent applications pending in the Chinese Patent Office, covering our technological innovations relating to power systems, vehicle electronics and structure, production processes and other new technologies.
In the meantime, with the hybrid model, we also utilize local channel partners with their existing sales and service capabilities for quicker market penetration and reduction on capital requirements. This two-tier approach will achieve our sales control and building our own sales capability but also benefit from channel partner’s existing sales capabilities.
In the meantime, with the hybrid model, we also cooperate with large-scale distributors to improve market penetration and utilize local dealer networks with their existing sales and service capabilities for quicker market penetration and reduction on capital requirements. This two-tier approach will achieve our sales control and building our own sales capability but also benefit from distributor’s existing sales capabilities.
We believe our distributed manufacturing methodology allows us to execute our business plan with less capital than would be required by the traditional, vertically integrated automotive model and, in the long-term, drive higher profit margins.
We also establish business relationships to assembly vehicles from vehicle kits in Europe with local vehicle assembly facilities. We believe our distributed manufacturing methodology allows us to execute our business plan with less capital than would be required by the traditional, vertically integrated automotive model and, in the long-term, drive higher profit margins.
As of December 31, 2022, we established four remote parts warehouses in Dusseldorf, Germany, Barcelona, Spain, Freehold, New Jersey and Jacksonville, Florida. 17 Table of Contents To Expand Our Product Offerings We began pilot production of our first-generation, U.S.
As of December 31, 2024, we operates two remote parts warehouses in Barcelona, Spain and Freehold, New Jersey. 17 Table of Contents To Expand Our Product Offerings We began pilot production of our first-generation, U.S.
Factors such as increases in demand for fuel-efficient, high-performance and low-emission vehicles, along with stringent government rules and regulations toward vehicle emissions are expected to drive the growth of the electric vehicle market. According to Statista, in 2024 the ECV market is projected to reach revenues of US$623.3bn globally.
Factors such as increases in demand for fuel-efficient, high-performance and low-emission vehicles, along with stringent government rules and regulations toward vehicle emissions are expected to drive the growth of the electric vehicle market.
The LS 300 sets a new benchmark for all electric commercial work trucks. This model boasts 370 cubic feet of storage space and a payload of 3307 lbs. along with a range of 270 miles. The vehicle will also be made available either as a van or as cab chassis that may be customized.
This model boasts 370 cubic feet of storage space and a payload of 3307 lbs. along with a range of 270 miles. The vehicle can also be made available either as a van or as cab chassis that may be customized.
As of the date of this report, our distributed manufacturing methodology relied upon six Cenntro-owned assembly facilities, including our facility at Changxing, which assembles for international export, and our local assembly facility in Freehold, New Jersey, which we utilize for trial production of our Logistar™ 400 model.
As of the date of this report, our distributed manufacturing methodology relied upon four Cenntro-owned assembly facilities, including our facility at Changxing and Yangzhong, which manufacture for international export, and our local assembly facility in Ontario, California and Freehold, New Jersey, which we utilize for local assembly of our Logistar™ 400, Logistar™ 300, and Logistar™ 450 models.
Class 1 (0 - 6,000 lbs.), light-duty commercial vehicle, the Metro®, in 2018, and, as of December 31, 2022, we have sold more than 4,090 Metro® units throughout Europe, North America and Asia. Utilizing our proprietary design and technology, we subsequently launched six EVCs including The Logistar™ 400 U.S. Class 4 (over 14,000 lbs.) medium-duty commercial vehicle for North America.
Class 1 (0 - 6,000 lbs.), light-duty commercial vehicle, the Metro®, in 2018, and, as of December 31, 2022, we have sold more than 4,090 Metro® units throughout Europe, North America and Asia. Utilizing our proprietary design and technology, we subsequently launched four ECV series, Avantier, Logimax, Logistar, and Teemak.
On May 23, 2022, we dissolved both of our previously dormant Nevada subsidiaries Naked Brand Group, Inc. and Naked Inc. On June 8, 2022, Cennatic Power, Inc. ("Cennatic”) was incorporated under the laws of the state of Delaware as a wholly-owned subsidiary of Cenntro Automotive Corporation. Cennatic in turn incorporated Cennatic Energy, S. DE R.L.
On May 23, 2022, we dissolved both of our previously dormant Nevada subsidiaries Naked Brand Group, Inc. and Naked Inc. On June 8, 2022, Cennatic was incorporated under the laws of the state of Delaware as a wholly-owned subsidiary of CAC. Cennatic in turn incorporated Cennatic MX in Mexico on August 24, 2022.
Subsequently CAG BVI was closed and cancelled. CAG Cayman became the controlling parent company to continue carrying out the business plan and operations. In August 2016, Autotech acquired 100% equity interest of Hangzhou Hengzhong Tech Co., Ltd. (“Hengzhong Tech”) in PRC. On June 5, 2017, CAG HK registered Hangzhou Ronda Tech Co., Ltd. (“Ronda”) in PRC.
CAG Cayman became the controlling parent company to continue carrying out the business plan and operations. In August 2016, Autotech acquired 100% equity interest of Hengzhong Tech in PRC. On June 5, 2017, CAG HK registered Ronda in PRC. In January 2018, Autotech acquired 100% equity interest of Shengzhou Machinery in PRC.
Many ECV users require to install their own charging stations instead of relying on public charge stations. It would be more convenient and more practical if our customers could purchase their vehicle chargers directly from us when they buy ECVs from us. It will be guaranteed that the charger will work with our vehicle seamlessly.
Electric vehicle chargers are essential for ECV users to charge their ECV for daily use. Many ECV users need to install their own charging stations instead of relying on public charge stations. It would be more convenient and more practical if our customers could purchase their vehicle chargers directly from us when they buy ECVs from us.
We have developed eight vehicle models: Metro®, LS100, LS200, LS260, LS300, LS400, Teemak™, and Avantier™. In addition we have introduced our LM864H hydrogen fuel-cell powered semi-tractor. Moreover, we are in the process of developing the LS450 (class 4) and LM800 (class 8) electric vehicle models for the US market .
We have developed ten vehicle models: Metro®, LS100, LS200, LS210, LS260, LS300, LS400, LS450, Teemak™, and Avantier™. In addition, we are in the process of developing our LM860H hydrogen fuel-cell powered semi-tractor, the LS600 (Class 6), and LM860B (Class 8), a hybrid powered vehicle model for the US market.
Prior to COVID-19, battery costs significantly decreased over the past decade. We expect that over the long term, prices will continue to fall. According to research service Bloomberg NEF (“BNEF”), lithium-ion battery pack prices decreased from above $1,200 per kilowatt-hour in 2010 to $132/kWh in 2021. In real terms, this represented a decline of approximately 89%.
According to research service Bloomberg NEF (“BNEF”), lithium-ion battery pack prices decreased from above $1,200 per kilowatt-hour in 2010 to $132/kWh in 2021. In real terms, this represented a decline of approximately 89%. We anticipate that battery prices will continue to decrease in the long-term. BNEF further forecasts that average prices are expected to fall by $3/kWh in 2025.
Competitive Strengths We design, develop and manufacture ECVs in a cost-effective manner to enable us to compete favorably in the light- and medium-duty commercial vehicle market.
Competitive Strengths We design, develop, manufacture, and distribute electric vehicles in a cost-effective manner to enable us to compete favorably in the whole range of commercial vehicle market.
The Metro® The Metro® is a customizable ECV used in commercial applications such as city services (i.e., street cleaners, firetrucks and garbage trucks) and last-mile delivery.
We are also developing heavy duty trucks in US Class 6 and Class 8 categories. The Metro® The Metro® is a customizable ECV used in commercial applications such as city utility services (i.e., street cleaners, firetrucks and garbage trucks) and last-mile delivery.
CEBV further established a wholly-owned subsidiary in Turkey named Cenntro Elektromobilite Araçlar A.Ş on February 21, 2023. On December 16, 2022, CEGE invested in Antric GmbH (“Antric”) and became a 25% shareholder of Antric. On August 31, 2023, CAE acquired the other 75% shares of Antric from Eric Diederich and Moritz Heibrock, the original founders of Antric.
On December 16, 2022, CEGE invested in Antric GmbH (“Antric”) and became a 25% shareholder of Antric. On August 31, 2023, CAE acquired the other 75% shares of Antric from Eric Diederich and Moritz Heibrock, the original founders of Antric. On January 16, 2023, CAC incorporated its wholly-owned subsidiary CA COL in Colombia.
These chargers will support the charge of the vehicles that we sell to our customers as well as the vehicles that are made by other auto manufacturers as long as they meet the EU (Mennekes/CCS2) and USA (J1772/CCS1) standards. Electric vehicle chargers are essential for ECV users to charge their ECV for daily use.
These chargers will support the charge of the vehicles that we sell to our customers as well as the vehicles that are made by other auto manufacturers as long as they meet the EU (Mennekes/CCS2) and USA (J1772/CCS1) standards. In 2024, we added a new 60KWH mobile charger.
On May 19, 2023, CEBV acquired 100% of equity interest in Cenntro Elecautomotiv, S.L. in Spain from an individual Don Yong Wang. On August 3, 2023, CEGI incorporated its wholly-owned subsidiary Pikka Electric Corporation in the state of Delaware. On August 24, 2023, CEGI incorporated its wholly-owned subsidiary Cenntro Technology Corporation in the state of California.
On May 8, 2023, CEBV established its wholly-owned subsidiary, CEV Italy, in Italy. On May 19, 2023, CEBV acquired 100% of equity interest in CE Spain in Spain from an individual Don Yong Wang. On August 3, 2023, CEGI incorporated its wholly-owned subsidiary, PEC, in the state of Delaware.
Last-mile Delivery and City Services The last-mile delivery market in the United States and the European Union is quickly expanding, driven by the rapid growth in the e-commerce industry resulting from consumer preference for faster deliveries, significant increases in online purchases resulting from COVID-19 and governmental focus on low emission urban logistics models.
Japan & South Korea: These nations provide heavy incentives for hydrogen infrastructure and have ambitious targets for fuel cell vehicle adoption and refueling stations expansion​ Last-mile Delivery and City Services The last-mile delivery market in the United States and the European Union is quickly expanding, driven by the rapid growth in the e-commerce industry resulting from consumer preference for faster deliveries, significant increases in online purchases after 2020 and governmental focus on low emission urban logistics models.
In addition, engines in traditional ICE commercial vehicles typically have a 10-year life, whereas the motor in our ECVs are designed to last, on average, for more than 20 years.
Furthermore, because our ECVs have fewer components and moving parts than their ICE counterparts, we believe the ongoing maintenance costs of our vehicles is low. In addition, engines in traditional ICE commercial vehicles typically have a 10-year life, whereas the motor in our ECVs are designed to last, on average, for more than 20 years.
Additionally, to meet our anticipated demand in the United States, we have established local assembly facilities in Northern America as we have launched assembly facilities in Jacksonville, Florida and Freehold, New Jersey. We are also in the of process establishing additional assembly facility in Ontario, California. Additionally, we expect that our acquisition of CAE (f.k.a.
Additionally, to meet our anticipated demand in the United States, we have established local assembly facilities in Northern America as we have launched assembly facilities in Ontario, California and Freehold, New Jersey.
As of December 31, 2023, we shifted our reliance on channel partners and had established eleven EV Centers which are now the base of our distribution network in addition leading our local marketing and aftermarket service. Our Highly Skilled and Experienced Management Team Our management team is led by Peter Z.
As of December 31, 2024, we approach our market through a hybrid model combining distributors and established five EV Centers which are now the base of our distribution network, leading our local marketing and aftermarket service. Our Highly Skilled and Experienced Management Team Our management team is led by Peter Z.
In January 2018, Autotech acquired 100% equity interest of Shengzhou Cenntro Machinery Co., Ltd. (“Shengzhou Machinery”) in PRC. On December 19, 2018, CAG HK registered Zhejiang Tooniu Tech Co., Ltd. (“Tooniu”) in PRC, which was relocated and renamed Jiangsu Tooniu Tech Co., Ltd. on November 24, 2022. On January 20, 2021, CAG HK registered Zhejiang Cenntro Machinery Co., Ltd.
On December 19, 2018, CAG HK registered Tooniu (formerly Zhejiang Tooniu Tech Co., Ltd.) in PRC, which was relocated and renamed Jiangsu Tooniu Tech Co., Ltd. on November 24, 2022. On January 20, 2021, CAG HK registered Zhejiang Machinery in PRC to take over and replace Shengzhou Machinery, which is now dormant.
We distribute and sell our products to our end-customers through our wholly-owned EV Centers and through our network of Cenntro dealers and distributors. Previously, Cenntro sold its products through a channel partner network which enabled each partner to distribute products under respective private labels.
Previously, Cenntro sold its products through a channel partner network which enabled each partner to distribute products under respective private labels.
Thus, no driver’s license is required to operate it and the Antic One is permitted to use bike lanes, what makes the vehicle particularly agile in dense city centers. Another advantage includes the Antic One’s exchangeable batteries. A battery-swap for the Antic One takes less than a minute and each swap enables the driver to ride for approximately 50 km.
One unique selling proposition for the Antic One compared to other vehicles is, that the Antic One is a cargo-bike. Thus, no driver’s license is required to operate it and the Antic One is permitted to use bike lanes, which makes the vehicle particularly agile in dense city centers. Another advantage includes the Antic One’s exchangeable batteries.
Our Industry The ECV Market According to a January 2022 report by Allied Market Research, the global EV market was valued at approximately $163.01 billion in 2020 and is projected to reach approximately $823.75 billion by 2030, representing a compound annual growth rate of 18.2% from 2021 to 2030.
Our Industry The ECV Market According to a March 2025 report by Virtue Market Research, the global EV market was valued at approximately $561.3 billion in 2024 and is projected to reach approximately $1.58 trillion by 2030, representing a compound annual growth rate of 19% from 2023 to 2030.
Currently, materials and components for our Metro® are shipped to our Changxing facilities where we manufacture key components for and vehicle kits of our Metro® model and integrate vehicle kits for assembly and shipment. Components for our new ECV models are shipped directly to our assembly and manufacturing sites that fully assemble vehicles for their local markets.
Components for our new ECV models are shipped directly to our assembly and manufacturing sites that fully assemble vehicles for their local markets.
As of the date of this report, we have established and built seven manufacturing and/or assembly facilities, in Jacksonville, Florida, Ontario, California and Freehold, New Jersey in the United States, Changxing and Yangzhong in China, Herne in Germany, and Monterrey in Mexico.
As of the date of this report, we are operating four manufacturing and/or assembly facilities: two in the US (Ontario, California and Freehold, New Jersey) and two in China (Changxing and Yangzhong). In 2024, we terminated operation at our assembly facilities in Jacksonville, Florida, and Herne in Germany.
The cloud-based system also keeps our parts inventory leaner and more responsive to better manage our working capital more efficiently. In order to satisfy that goal, we established two production-side parts warehouses in Changxing, China and Yangzhong, China which store our produced parts that can be locally sourced on a global scale.
In order to satisfy that goal, we established two production-side parts warehouses in Changxing, China and Yangzhong, China which store our produced parts that can be locally sourced on a global scale. Our warehouses can send the parts globally in response to orders from our website that customers can place.
The following table summarizes the breakdown of our revenues by region for the years ended December 31, 2023 and 2022, respectively: For the Year Ended December 31, 2023 2022 $ % $ % United States $ 34,990 4.63 % $ 697,452 7.80 % Europe $ 1,021,205 73.45 % $ 7,052,452 78.87 % Asia $ 16,218,398 21.76 % $ 1,191,931 13.33 % Others $ 4,805,312 0.16 % - - We are currently targeting new markets where local governments have begun incentivizing a shift from ICEs to EVs.
The following table summarizes the breakdown of our revenues by region for the years ended December 31, 2024 and 2023, respectively: For the Year Ended December 31, 2024 2023 $ % $ % United States $ 20,888,931 66.7 % $ 1,021,205 9.8 % Europe $ 5,719,353 18.3 % $ 4,564,152 43.8 % Asia $ 4,579,104 14.6 % $ 4,805,312 46.1 % Others $ 110,004 0.4 % 34,990 0.3 % We are currently targeting new markets where local governments have begun incentivizing a shift from ICEs to EVs.
On February 14, 2023, CEGI acquired all shares of Avantier Motors Corporation, a company incorporated on November 17, 2017, in the state of Delaware. Avantier has not been operating since incorporation.
On February 14, 2023, CEGI acquired all shares of Avantier, a company incorporated on November 17, 2017, in the state of Delaware. Avantier has not been operating since incorporation. On March 13, 2023, Avantier formed its wholly-owned subsidiary Avantier HK in Hong Kong. 7 Table of Contents On March 29, 2023, CAC incorporated its wholly-owned subsidiary, CE COL, in Colombia.
Compared to other cargo bikes the Antric One has a robust construction, cargo volume and payload (>2m 3 volume, 270kg payload in the container). The production for Antic One began in November 2022. The production of our advanced version of the Antric One commenced in February 2024.
A battery-swap for the Antic One takes less than a minute and each swap enables the driver to ride for approximately 50 km. Compared to other cargo bikes the Antric One has a robust construction, cargo volume and payload (>2m 3 volume, 270kg payload in the container). The production for Antic One began in November 2022.
We believe transitioning our third-party reliant distribution model to a hybrid model will provide economic advantages and reduce time to market for our ECVs.
We believe transitioning our third-party reliant distribution model to a hybrid model will provide economic advantages and reduce time to market for our ECVs. To further strengthen this hybrid model and improve operating efficiency, we began closing select EV Centers in 2024 while establishing local distribution channels.
For our new ECV models, we anticipate that in the short term, we will source substantially all components from single-source suppliers due to volume limitations and efficiency concerns. 15 Table of Contents We use various raw materials in our business including aluminum, steel, carbon fiber, non-ferrous metals such as copper, lithium, nickel and cobalt, as well as key component inputs such as semiconductors.
The vast majority of our components have alternative sources and we do not anticipate that finding qualified alternative sources for any particular component, including single-source supplier components, will be a material concern. 15 Table of Contents We use various raw materials in our business including aluminum, steel, carbon fiber, non-ferrous metals such as copper, lithium, nickel and cobalt, as well as key component inputs such as semiconductors.
To that end, we expect to complete the production line installation in the second quarter of 2024. 18 Table of Contents To Expand Market Breadth and Depth We expect to increase our market share in the current markets where our ECVs are sold, while simultaneously penetrating new markets worldwide.
These advantages make hydrogen trucks a promising solution for sustainable and efficient freight transportation. 18 Table of Contents To Expand Market Breadth and Depth We expect to increase our market share in the current markets where our ECVs are sold, while simultaneously penetrating new markets worldwide.
For instance, our Metro® and Neibor® Series are designed with a proprietary, lightweight chassis structure, enabling us to use less steel and such ECVs to utilize less battery power than our competitors. Furthermore, because our ECVs have fewer components and moving parts than their ICE counterparts, we believe the ongoing maintenance costs of our vehicles is low.
For instance, our Metro® and and some of our Logistar™ Series are designed with a proprietary, lightweight chassis structure, enabling us to use less steel and such ECVs to utilize less battery power than our competitors.

… 128 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

32 edited+15 added−9 removed450 unchanged
Biggest changeOur operating results for the year ended December 31, 2023, have been impacted by certain capacity shortages and attacks on vessels in the Suez Canal and we expect such attacks to continue for the foreseeable future. In recent years, the shipping industry also experienced growing issues with port congestion and pandemic-related port closures and ship diversions well into 2022.
Biggest changeCertain cost were stabilized as of March 2024, but the risk of higher cost volatility remains. Our operating results for the year ended December 31, 2024, have been impacted by certain capacity shortages and attacks on vessels in the Red Sea and we expect such incidence causing rising shipping rates volatility to continue for the foreseeable future.
If we decide to close or shift resources or operations from certain EV Centers at any time in the future, end-user customers of our ECVs may encounter difficulties in maintaining their vehicles and obtaining satisfactory support, which may negatively impact our reputation. Our remaining channel partners are not subject to any minimum annual purchase requirements.
If we decide to close or shift resources or operations from certain EV Centers at any time in the future, end-user customers of our ECVs may encounter difficulties in maintaining their vehicles and obtaining satisfactory support, which may negatively impact our reputation. Our channel partners are not subject to any minimum annual purchase requirements.
We currently have eleven EV Centers worldwide and anticipate the EV Centers will lead the distribution network, however if we were to close or dissociate one or more of our EV Centers due to performance, there is no assurance that we would be able to establish a suitable replacement EV Center in the region to take up the role of marketing , distributing and after-market care our ECVs in the relevant market within a suitable timeframe or at all. 25 Table of Contents The expense and time required to establish and train staff at our EV Centers so performance and service will be able to meet our quality standards and regulatory requirements, may be greater than anticipated, or we may never establish a new operation after having invested significant resources on that local market.
We currently have five EV Centers worldwide and anticipate the EV Centers will lead the distribution network, however if we were to close or dissociate one or more of our EV Centers due to performance, there is no assurance that we would be able to establish a suitable replacement EV Center in the region to take up the role of marketing , distributing and after-market care our ECVs in the relevant market within a suitable timeframe or at all. 25 Table of Contents The expense and time required to establish and train staff at our EV Centers so performance and service will be able to meet our quality standards and regulatory requirements, may be greater than anticipated, or we may never establish a new operation after having invested significant resources on that local market.
As a result, the semiconductor supply shortage has had, and will continue to have, a negative impact on our vehicle production. To date, we have experienced price decreases compared to the rising market prices in 2022, which resulted in higher vehicle costs. The market in 2023 was favorable for the entire new energy industry in terms of vehicle costs.
As a result, the semiconductor supply shortage has had, and will continue to have, a negative impact on our vehicle production. To date, we have experienced price decreases compared to the rising market prices in 2022, which resulted in higher vehicle costs. The market in 2024 was favorable for the entire new energy industry in terms of vehicle costs.
However, throughout 2022 and well into 2023, we continued to shift procurement of vehicle component, and semi-knocked-down kit manufacturing to qualified suppliers. Continuing into 2024, we have also outsourced vehicle kit manufacturing (and, in some instances, vehicle assembly) to qualified manufacturers for our new ECV series to manufacturing partners to reduce our capital expenditure requirements.
However, throughout 2023 and well into 2024, we continued to shift procurement of vehicle component, and semi-knocked-down kit manufacturing to qualified suppliers. Continuing into 2025, we have also outsourced vehicle kit manufacturing (and, in some instances, vehicle assembly) to qualified manufacturers for our new ECV series to manufacturing partners to reduce our capital expenditure requirements.
GAAP and the inclusion of proper disclosures in the related footnotes, and (ii) the design, documentation and implementation of internal controls surrounding risk management and financial reporting processes. During the preparation of the Company’s consolidated financial statements for the year ended December 31, 2023, management reassessed the Company’s internal control over financial reporting.
GAAP and the inclusion of proper disclosures in the related footnotes, and (ii) the design, documentation and implementation of internal controls surrounding risk management and financial reporting processes. During the preparation of the Company’s consolidated financial statements for the year ended December 31, 2024, management reassessed the Company’s internal control over financial reporting.
During the years ended December 31, 2023, and 2022, significant portions of our revenues were derived from the sales in the European Union and United States, denominated in Euros or USD, respectively, while our costs and expenses were primarily incurred in the PRC (and denominated in RMB).
During the years ended December 31, 2024, and 2023, significant portions of our revenues were derived from the sales in the European Union and United States, denominated in Euros or USD, respectively, while our costs and expenses were primarily incurred in the PRC (and denominated in RMB).
Development and manufacturing of our current and future ECVs, such as the Metro®, Logistar™, LogiMax, Avantier™, Teemak™ and Antric One are and will be subject to risks, including: • accurately manufacturing or procure components within appropriate design tolerances; • establishing additional manufacturing and local assembly facilities in our various target markets; • compliance with environmental, workplace safety and similar regulations; • securing necessary high-quality components and materials from our supply chain on acceptable terms and in a timely manner; • our ability to execute on our growth plan to regionalize our supply chain and manufacturing; • quality controls; • delays or disruptions in the supply chain, including as a result of pandemics such as COVID-19; • delays or disruptions in ocean transit or transportation between our suppliers, our manufacturing facilities (or manufacturing partners’ facilities) and our local assembly facilities and our customers; • our ability to establish, maintain and rely upon relationships with our suppliers, channel partners and manufacturing partners; and • other delays, backlog in manufacturing and research and development of new models, and cost overruns.
Development and manufacturing of our current and future ECVs, such as the Metro®, Logistar™, LogiMax, Avantier™, Teemak™ and Antric One are and will be subject to risks, including: • accurately manufacturing or procure components within appropriate design tolerances; • establishing additional manufacturing and local assembly facilities in our various target markets; • compliance with environmental, workplace safety and similar regulations; • securing necessary high-quality components and materials from our supply chain on acceptable terms and in a timely manner; • the impact of tariffs or trade restrictions on the cost and availability of key components and materials; • our ability to execute on our growth plan to regionalize our supply chain and manufacturing; • quality controls; • delays or disruptions in the supply chain, including as a result of pandemics such as COVID-19; • delays or disruptions in ocean transit or transportation between our suppliers, our manufacturing facilities (or manufacturing partners’ facilities) and our local assembly facilities and our customers; • our ability to establish, maintain and rely upon relationships with our suppliers, channel partners and manufacturing partners; and • other delays, backlog in manufacturing and research and development of new models, and cost overruns.
As of December 31, 2022, we shifted from relying only on channel partners to a hybrid model combines distribution between our wholly owned EV Centers with local established dealers and channel partners.
As of December 31, 2024, we shifted from relying only on channel partners to a hybrid model combines distribution between our wholly owned EV Centers with local established dealers and channel partners.
We will remain an emerging growth company until the earliest of: (1) the last day of the fiscal year following the fifth anniversary of June 20, 2018, which was the date of the first sale of our Common Stock pursuant to an effective registration statement; (2) the last day of the first fiscal year in which our annual gross revenue is $1.235 billion or more; (3) the date on which we have, during the previous rolling three-year period, issued more than $1 billion in non-convertible debt securities; and (4) the last day of the fiscal year in which the market value of our Common Stock held by non-affiliates exceeded $700 million as of June 30 of such fiscal year.
We will remain an emerging growth company until the earliest of: (1) the last day of the fiscal year following the fifth anniversary of January 14, 2022, which was the date of the first sale of our Common Stock pursuant to an effective registration statement; (2) the last day of the first fiscal year in which our annual gross revenue is $1.235 billion or more; (3) the date on which we have, during the previous rolling three-year period, issued more than $1 billion in non-convertible debt securities; and (4) the last day of the fiscal year in which the market value of our Common Stock held by non-affiliates exceeded $700 million as of June 30 of such fiscal year.
Item 1A. Risk Factors. Risks Related to Our Business We have a limited operating history and face significant challenges in an emerging industry. We began pilot production of our first-generation, U.S. Class 1 (0 - 6,000 lbs.), electric light-duty commercial vehicle, the Metro®, in 2018. Our revenues were approximately $22.1 million for the year ended December 31, 2023.
Item 1A. Risk Factors. Risks Related to Our Business We have a limited operating history and face significant challenges in an emerging industry. We began pilot production of our first-generation, U.S. Class 1 (0 - 6,000 lbs.), electric light-duty commercial vehicle, the Metro®, in 2018. Our revenues were approximately $31.3 million for the year ended December 31, 2024.
For example, in recent years, the U.S. government imposed and proposed, among other actions, new or higher tariffs on specified imported products originating from China in response to what it characterized as unfair trade practices, and China responded by imposing and proposing new or higher tariffs on specified U.S. products.
For example, the U.S. government recently imposed and proposed, among other actions, new or higher tariffs on specified imported products originating from China in response to what it characterized as unfair trade practices, and China responded by imposing and proposing new or higher tariffs on specified U.S. products.
Substantially all of our revenue for the years ended December 31, 2023, and 2022 was derived from sales of our ECVs in North America, Europe and Asia.
Substantially all of our revenue for the years ended December 31, 2024, and 2023 was derived from sales of our ECVs in North America, Europe and Asia.
We do not provide charging solutions for our channel partners or their customers. Our ECVs have two ways to charge - slow charging from a regular power outlet and fast charging from a public electric vehicle (“EV”) charging station.
We do not provide charging solutions for our channel partners or their customers. Our ECVs have two ways to charge - slow charging from a regular power outlet and fast charging from a public EV charging station.
We have made significant up-front investments in research and development, supply chain establishment, establishment of local assembly facilities and capacity, and channel partner development to develop and expand our business. We have spent approximately $8.5 million in research and development activities related to our operations from our inception through December 31, 2023.
We have made significant up-front investments in research and development, supply chain establishment, establishment of local assembly facilities and capacity, and channel partner development to develop and expand our business. We have spent approximately $94.4 million in research and development activities related to our operations from our inception through December 31, 2024.
To the extent we are required to comply with regulations under the GDPR, the UK GDPR, the ePrivacy Regulation (once effective), the Cybersecurity Law and the DSL (collectively, the “Data Security Regulations”), any non-compliance could adversely affect our business, financial condition, results of operations and prospects.
To the extent we are required to comply with regulations under the GDPR, the UK GDPR, the ePrivacy Directive, the Cybersecurity Law, the DSL and China’s enhanced regulations (collectively, the “Data Security Regulations”), any non-compliance could adversely affect our business, financial condition, results of operations and prospects.
Our newly established EV Center dealerships and remaining channel partners in Japan are responsible for different portions of the sale, marketing and servicing (and for our channel partners, assembly and/or homologation) of the ECV products we sell. We do not control the actions of our channel partners.
Our EV Center dealerships and channel partners are responsible for different portions of the sale, marketing and servicing (and for our channel partners, assembly and/or homologation) of the ECV products we sell. We do not control the actions of our channel partners.
Although the United States and China successfully reached an interim trade deal in January 2020 that de-escalated the trade tensions with both sides rolling back tariffs, the extent to which the trade deal will be successfully implemented is unpredictable.
Although the United States and China previously, successfully reached an interim trade deal in January 2020 that de-escalated the trade tensions with both sides rolling back tariffs, the extent to which this trade deal, or potential future trade deals, will be successfully implemented is unpredictable.
For the years ended December 31, 2023, and 2022, our three largest channel partners accounted for approximately 10.5%, and 27.6% of our sales, respectively. As of quarter one of 2022, the company made significant changes regarding its few channel partners and shifted reliance away from select channel partners to its own distribution network through the establishment of local EV Centers.
For the years ended December 31, 2024, and 2023, our channel partners accounted for approximately 2.1%, and 22.2% of our sales, respectively. As of quarter one of 2022, the company made significant changes regarding its few channel partners and shifted reliance away from select channel partners to its own distribution network through the establishment of local EV Centers.
As of December 31, 2023, our executive officers, directors and their affiliates beneficially own, in the aggregate, approximately 24.9% of our outstanding Common Stock. In particular, as of December 31, 2023, Mr. Peter Z. Wang, our Chief Executive Officer, beneficially owned approximately 23.7% of our outstanding Common Stock. Mr.
As of December 31, 2024, our executive officers, directors and their affiliates beneficially own, in the aggregate, approximately 25.1% of our outstanding Common Stock. In particular, as of December 31, 2024, Mr. Peter Z. Wang, our Chief Executive Officer, beneficially owned approximately 24.0% of our outstanding Common Stock. Mr.
We have historically incurred losses from our operations and may not be profitable in the future. We incurred losses from operations of approximately $51.9 million, and $54.7 million for the years ended December 31, 2023, and 2022, respectively.
We have historically incurred losses from our operations and may not be profitable in the future. We incurred losses from operations of approximately $55.3 million, and $47.4 million for the years ended December 31, 2024, and 2023, respectively.
As a result, we may be required to comply with certain provisions of the GDPR and the new ePrivacy Regulation (once effective).
As a result, we may be required to comply with certain provisions of the GDPR.
Wang has considerable influence over the composition of our Board. See “⸺Concentration of ownership among our executive officers, directors and their affiliates, may prevent new investors from influencing significant corporate decisions.” 50 Table of Contents
Wang has considerable influence over the composition of our Board. See “⸺Concentration of ownership among our executive officers, directors and their affiliates, may prevent new investors from influencing significant corporate decisions.” 50 Table of Contents Item 1B. Unresolved Staff Comments. Smaller reporting companies are not required to provide the information required by this item.
For example, semiconductors are no longer in short supply, and the prices of batteries, motors and electronic controls have all fallen. Increases in the cost, disruptions of supply or shortages of lithium-ion batteries could harm our business. Our business depends on the continued supply of battery cells for our vehicles.
For example, semiconductor shortage that previously constrained vehicle production had largely subsided, and the prices of batteries, motors and electronic controls continued fallen. Increases in the cost, disruptions of supply or shortages of lithium-ion batteries could harm our business. Our business depends on the continued supply of battery cells for our vehicles.
Other factors such as usage, time and stress patterns may also impact the battery’s ability to hold a charge, which would decrease our ECVs range before needing to recharge.
We currently expect the vehicle battery pack capacity to decrease by up to 20% over six years under normal use conditions. Other factors such as usage, time and stress patterns may also impact the battery’s ability to hold a charge, which would decrease our ECVs range before needing to recharge.
More specifically, there have been several rounds of U.S. tariffs on Chinese goods taking effect in the past few years, some of which prompted retaliatory Chinese tariffs on U.S. goods.
More specifically, there have been several rounds of U.S. tariffs on Chinese goods taking effect in the past few years, some of which prompted retaliatory Chinese tariffs on U.S. goods. Most recently, on March 4, 2025, U.S. president, Donald J. Trump, announced that the U.S. would impose an additional 20% tariff on Chinese imports starting March 4, 2025.
The global transportation industry is experiencing ocean shipping disruptions, trucking shortages, increased ocean shipping rates and increased trucking and fuel costs, and we cannot predict when these disruptions will end. In recent years, the global transportation industry has experienced unprecedented increases in shipping rates from the trans-Pacific Ocean carriers due to various factors, including limited availability of shipping capacity.
In recent years, the global transportation industry has experienced higher volatility in shipping rates from the trans-Pacific Ocean carriers due to various factors, including limited availability of shipping capacity, and geopolitical tensions.
In recent years, China and the United States have implemented certain increasingly protective trade measures with continuing trade tensions, including significant tariff increases, between these countries.
In recent years, China and the United States have implemented certain increasingly protective trade measures with continuing trade tensions, including significant tariff increases, between these countries. Most recently, on March 4, 2025, U.S. president, Donald J. Trump, announced that the U.S. would impose an additional 20% tariff on Chinese imports starting March 4, 2025.
The cross-border transfer of domestic data as required by non-PRC judicial or enforcement authorities is also subject to the approval of competent Chinese authorities. Compliance with the GDPR, the UK GDPR, the new ePrivacy Regulation, as well as the Cybersecurity Law and DSL in China, may involve substantial operational costs or require us to change business practices.
Compliance with the GDPR, the UK GDPR, the ePrivacy Directive, as well as the Cybersecurity Law, DSL and enhanced regulations in China, may involve substantial operational costs or require us to change business practices.
Such factors had, and if persistent, may continue to have a negative impact on our vehicle production, gross profit margin, product delivery time and revenue recognition. Shipping cost have increased as of the end of November 2023 due to the frequent attacks by Houthi rebels on vessels transporting goods through the Suez Canal.
Although the overall shipping cost was decreasing relatively to the year 2022 and 2023, such factors related to capacities and geopolitical tensions had, and if persistent, may continue to have a negative impact on our vehicle production, gross profit margin, product delivery time and revenue recognition.
Shipments to EU have instead taken a route crossing the Cape of Good Hope, which have significantly increased shipping costs. Certain cost were stabilized as of March 2024, but the risk of higher cost volatility remains.
Shipping cost have increased as of the end of November 2023 due to the frequent attacks by Houthi rebels on vessels transporting goods through the Suez Canal. Shipments to EU have instead taken a route crossing the Cape of Good Hope, which have significantly increased shipping costs and had lasting effects into 2024.
The GDPR requirements apply not only to third-party transactions but also to transfers of information between us and our subsidiaries, including employee information. The European Commission has another draft regulation in the approval process that focuses on a person’s right to conduct a private life, in contrast to the GDPR, which focuses on protection of personal data.
The GDPR requirements apply not only to third-party transactions but also to transfers of information between us and our subsidiaries, including employee information. The collection and processing of electronic communications data in the EU is regulated by the ePrivacy Directive (2002/58/EC), which applies to the confidentiality of communications, the use of tracking technologies (such as cookies), and direct marketing practices.
Removed
In 2023, we introduced the Antric series of electric cargo bikes onto European markets, which is designed for last mile city logistics. Beginning in the fourth quarter of 2021, we introduced into the market the Neibor® and Logistar™ series of ECVs as well as the Teemak™ off-road ECV.
Added
In 2024, we have introduced four new vehicle models, Avantier Ex, Avantier Commuter, Logistar 300 (LS300), and Logister 450 (LS450). Avantier Ex and Avantier Commuter are targeting European markets and other markets outside of US markets while LS300 and LS450 are mainly targeting the US markets.
Removed
As of December 31, 2023, we have remaining relationships with one of our private labeling channel partners which imports completely built units and sell them in the Japanese market—as opposed to our remaining channel partners which are simply resellers of whole unit vehicles.
Added
As of December 31, 2024, we have maintained relationships with several distributors in the European and Asian market and operated five EV centers in Germany, Spain, New Jersy and California in the US, and China.
Removed
We currently expect up to a 5% decline in the energy capacity retention per year, which will decrease the capacity of our ECVs over five years by up to 25% under normal use.
Added
The additional tariffs imposed by the U.S. government on certain products imported from China may impact our supply chain and cost structure.
Removed
As a result, our ability to deliver our ECV units to our channel partners has been disrupted or delayed well into calendar year 2022. Additionally, the cost of shipping from China to local markets in North America and Europe had each increased substantially between March 2020 and October 2022.
Added
Additionally, the U.S. government continues to signal that it may alter trade agreements and terms between China and the United States, including limiting trade with China, and may impose additional tariffs on imports from China and other countries from which we import goods.
Removed
We may experience such disruption again in the near future due to multiple factors that may be brought about by variants of the COVID-19 pandemic, such as supply and demand imbalance, a shortage of warehouse workers, truck drivers, transport equipment (tractors and trailers) and other causes, which may result in heightened congestion, bottleneck and gridlock, leading to abnormally high transportation delays.
Added
The global transportation industry is experiencing ocean shipping disruptions, trucking shortages, increased ocean shipping rates and increased trucking and fuel costs, and we cannot predict when these disruptions will end.
Removed
Similarly, potential supply chain disruptions such as those described in the preceding paragraphs may lead to an increase in our transportation costs. Such disruptions have and may continue to materially and adversely affect our business, financial results, prospects, financial condition and operating results.
Added
Unlike the GDPR, which focuses on personal data protection, the ePrivacy Directive regulates the privacy of communications and metadata, including data collected from connected devices, such as our ECVs. The directive has been implemented inconsistently across EU member states, leading to fragmented compliance requirements.
Removed
The proposed legislation, known as the Regulation on Privacy and Electronic Communications, or ePrivacy Regulation, would replace the current ePrivacy Directive.
Added
A proposed ePrivacy Regulation intended to replace the directive and create a uniform legal framework was withdrawn in February 2025, leaving uncertainty regarding future reforms. Compliance with varying national implementations of the ePrivacy Directive may require additional operational adjustments and could result in regulatory fines or enforcement actions if found noncompliant.
Removed
While the new legislation contains protections for those using communications services (for example, protections against online tracking technologies), the timing of its proposed enactment following the GDPR means that additional time and effort may need to be spent addressing differences between the ePrivacy Regulation and the GDPR.
Added
Scheduled to take effect on September 12, 2025, the EU Data Act introduces new regulatory requirements for data access, sharing, and portability, extending beyond personal data to include non-personal data. This legislation aims to facilitate data sharing among businesses and with governments, but its broad scope and evolving implementation may create uncertainties and compliance challenges for our operations.
Removed
New rules related to the ePrivacy Regulation are likely to include enhanced consent requirements to use communications content and metadata and other data collected from connected devices and physical objects, including our ECVs which are fitted with networking devices.
Added
The Act imposes obligations on data holders—which could include companies managing connected devices such as our Electric Commercial Vehicles (ECVs)—to provide access to certain data upon request under regulated conditions. Compliance with these requirements may necessitate modifications to our data management systems, contractual agreements, and security protocols.
Added
Non-compliance could result in regulatory enforcement actions, penalties, and increased operational costs, particularly as EU member states implement and enforce the Act in different ways. Additionally, the evolving regulatory landscape in the EU could create uncertainties regarding data monetization, competitive practices, and cross-border data transfers, potentially impacting our business model and operations.
Added
The cross-border transfer of domestic data as required by non-PRC judicial or enforcement authorities is also subject to the approval of competent Chinese authorities. Effective January 1, 2025, China's Network Data Security Management Regulations introduce enhanced requirements for data security and privacy, particularly concerning personal information protection, data localization, and cross-border data transfers.
Added
These regulations impose stricter compliance obligations on data handlers, including requirements to conduct regular data security risk assessments, implement classified data protection measures, and obtain governmental approval for certain cross-border data transfers. Additionally, companies processing large volumes of "important data" or "national core data" may face heightened scrutiny and stricter regulatory oversight.
Added
Failure to comply with these regulations could result in significant financial penalties, operational disruptions, revocation of business licenses, or restrictions on cross-border operations. As a result, we may be required to adjust our data handling practices, enhance internal compliance measures, and allocate additional resources to meet evolving regulatory requirements in China.
Added
The additional tariffs imposed by the U.S. government on certain products imported from China may impact our supply chain and cost structure.
Added
Additionally, the U.S. government continues to signal that it may alter trade agreements and terms between China and the United States, including limiting trade with China, and may impose additional tariffs on imports from China and other countries from which we import goods.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

2 edited+32 added−0 removed11 unchanged
Biggest changeDespite precautionary measures to prevent unanticipated problems that could affect our information technology systems, sustained or repeated system failures that interrupt our ability to generate and maintain data could adversely affect our ability to manage our data and inventory, procure parts or supplies or manufacture, sell, deliver ECVs, or achieve and maintain compliance with, or realize available benefits under, tax laws and other applicable regulations. 51 Table of Contents We cannot assure you that any of our new information technology systems or their required functionality will be effectively implemented, maintained or expanded as planned.
Biggest changeDespite precautionary measures to prevent unanticipated problems that could affect our information technology systems, sustained or repeated system failures that interrupt our ability to generate and maintain data could adversely affect our ability to manage our data and inventory, procure parts or supplies or manufacture, sell, deliver ECVs, or achieve and maintain compliance with, or realize available benefits under, tax laws and other applicable regulations.
The Company’s Audit Committee is responsible for overseeing cybersecurity risk and are informed in a timely manner of any incidents considered potentially serious, together with details on the prevention, detection, mitigation and remediation of such incidents.
The Company’s Audit Committee is responsible for overseeing cybersecurity risk and are informed in a timely manner of any incidents considered potentially serious, together with details on the prevention, detection, mitigation and remediation of such incidents. 51 Table of Contents Item 2. Properties.
Added
We cannot assure you that any of our new information technology systems or their required functionality will be effectively implemented, maintained or expanded as planned.
Added
We currently own one facility in Changxing, China, which is approximately 737,413 square feet, and is primarily used for engineering and production of vehicle kits of the Metro® and assembly of certain ECV models for export and logistics operations. We currently lease eleven facilities and offices located in the United States, Germany, Mexico and China.
Added
One of our United States facilities located in Howell, New Jersey, is approximately 41,160 square feet and is used primarily for the production of our Logistar™ 300, Logistar™ 400, and Logistar™ 450 model and warehousing. Our second existing facility in Freehold, New Jersey is approximately 2,600 square feet and is used as our corporate headquarters.
Added
Our leased China facility is located in Hangzhou, Zhejiang Province, with approximately 15,456 square feet of office space primarily used as regional headquarters, as well as for research and development, supply-chain management, and sales operations. In January 2022, we established a European Operations Center in Dusseldorf, Germany, which provides marketing support, after-market support and spare-parts warehousing for the European market.
Added
Our European Operations Center is approximately 27,220 square feet. We established a local assembly facility and EV Center in Ontario, California. The assembly factory is where we plan to assemble the Logistar™ 350, Logistar™ 400, Logistar™ 450 and the Teemak™ for eventual sale in the United States West Coast market.
Added
We began trial assembling operations at the Jacksonville facility in July 2024. Our California based assembly facility and EV Center is approximately 64,000 square feet and is our flagship EV Center for sales and support functions.
Added
In connection with our acquisition of TME, we utilize TME’s facility in Herne, Germany, where we are expanding local assembly capacity in the European Union for production of our European ECV models, including the Teemak® and Logistar™ series, in addition to the Metro®. In June 2024, we decided to terminate the Herne facility to improve operating efficiency.
Added
While, in August 2022, we leased a 3,471 square feet facility in Barcelona, Spain for EV center and spare-parts fulfillment purpose. In November 2022, we leased a 112,694 square feet manufacturing facility located in the Aero Industrial Park in Monterrey, Mexico that will house our wholly owned Mexican subsidiary, Cennatic Energy, S. DE R.L. DE C.V. (“Cennatic Energy”).
Added
Cennatic Energy will manufacture lithium-ion batteries for electric commercial vehicles. The purpose of the facility is to enhance the independence of our supply chain for essential components. At date of the report, we are closing battery manufacturing facility in Monterrey, Mexico and considering relocating the operations to the United States.
Added
In addition, in the first quarter 2023, we leased a 26,579 square feet facility in Colombia, and 10,656 square feet facility in Dominic Republic as warehouse and offices, as we try to extend our market into South America 52 Table of Contents Item 3. Legal Proceedings.
Added
The Company may be involved in various legal proceedings, claims and other disputes arising from the commercial operations, projects, employees and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable.
Added
The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated.
Added
Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity.
Added
Please refer to the description as contained in “Item 8 Financial Statements and Supplementary Data” on page F-1 of our Annual Report and the information described below. In June 2022, Sevic Systems SE (“Sevic”) filed for injunctive relief in a corporate court in Brussels, Belgium, alleging that Cenntro Automotive Europe GmbH (“CAE”) infringed on Sevic’s intellectual property (“IP”) rights.
Added
The injunctive action was also directed against LEIE Center SRL (“LEIE”) and Cedar Europe GmbH (“Cedar”), two distribution partners of CAE. There, Sevic claims it acquired all IP rights to an electric vehicle, the so-called CITELEC model (“CITELEC”), fully and exclusively from the French company SH2M Sarl (“SH2M”) under Mr. Pierre Millet.
Added
Sevic claims these rights were acquired under a 2019 IP transfer agreement. According to Sevic, the METRO model(“METRO”) produced by Cenntro Electro Group Ltd. (“CEGL”) and distributed by CAE derives directly from the CITELEC. Sevic alleges the distribution of the METRO infringes on Sevic’s IP rights. In its action, Sevic relies on (Belgian) copyright law and unfair business practices.
Added
On February 2, 2023, the president of the commercial court of Brussels rendered a judgment, declaring i) the claim against Cedar was inadmissible and ii) The main claim against CAE and LEIE was founded. According to the president’s opinion the CITELEC-model can enjoy copyright protection and determined it was sufficiently proven that Sevic acquired the copyrights of the CITELEC-model.
Added
The president then concluded that the distribution of the METRO-model in Belgium constituted a violation of article XI. 165 §1 of the Belgian Code of Economic Law and thereby ordered the cessation of the distribution of the METRO-model, a penalty in the form of a fine of EUR20,000.00 per sold vehicle in Belgium and EUR5,000.00 for each other infringement in Belgium after the judgement was served with a maximum fine of EUR500,000.00 for LEIE and EUR1,000,000.00 fine for CAE.
Added
Because CAE has not sold any METRO-models in Belgium, the Company believes the judgement is incorrect but has accrued the related liability according to the judgement made. On April 17,2023 CAE filed a writ of appeal. The introductory hearing was scheduled for May 22, 2023. The judge did not give any legal assessment at the hearing.
Added
All parties had been granted deadlines for written pleadings. On January 29, 2025, CAE rejected the late delivered final writ by lawyers of Sevic, which should have been received by September 2, 2024. As of the date of this report, it is not possible to determine the outcome of these proceedings related to Sevic.
Added
On July 22, 2022, Xiongjian Chen filed a complaint against Cenntro Electric Group Limited (“CENN”), Cenntro Automotive Group Limited (“CAG”), Cenntro Enterprise Limited (“CEL”) and Peter Z. Wang (“Wang,” together with CENN, CAG and CEL, the “Defendants”) in the United States District Court for the District of New Jersey.
Added
The complaint alleges eleven causes of action sounding in contract and tort against the Defendants, all pertaining to stock options issued to Mr. Chen pursuant to his employment as Chief Operating Officer of CAG.
Added
With respect to the four contract claims, Plaintiff alleges breach of contract claims pertaining to an employment agreement between Plaintiff and CAG and a purported letter agreement between Plaintiff and CEL.
Added
With respect to the seven tort claims, Plaintiff alleges claims regarding purported misrepresentations and promises made concerning the treatment of Plaintiff’s stock options upon a corporate transaction, including claims for tortious interference, fraud, promissory estoppel, negligent misrepresentation, unjust enrichment and conversion.
Added
The complaint seeks, among other things, money damages (including compensatory and consequential damages) in the amount of $19 million, plus interest, attorneys’ fees and expenses. Defendants moved to dismiss the complaint against all Defendants for failure to state a claim and for lack of personal jurisdiction over defendants CAG and CEL.
Added
On April 30, 2023, the District Court dismissed the claims against CAG and CEL for lack of personal jurisdiction. In addition, the District Court dismissed all the claims against Wang and CENN without prejudice and permitted the Plaintiff to amend his complaint within 30 days to address the deficiencies in his claims against Wang and CENN.
Added
On May 28, 2023, Plaintiff filed an amended complaint. On July 20, 2023, the Defendants filed a motion seeking the dismissal of that amended complaint. On September 22, 2023, the Plaintiff filed to oppose our Motion to Dismiss and Motion to Strike. The Defendants filed our reply briefs by the deadline on November 9, 2023.
Added
On January 25, 2024, the Magistrate Judge entered an Order granting Plaintiff’s Motion to Amend and denying our Motion to Strike as moot. On November 12, 2024, District Court issued an Order, dismissing Plaintiff’s all claims except with respect to the promissory estoppel claim against Peter Wang.
Added
On November 26, 2024, we filed a Motion for Reconsideration of the Court’s denial of Cenntro’s Motion to Dismiss Plaintiff’s promissory estoppel claim against Peter Wang. Concurrently, on same date Plaintiff moved for reconsideration of the Court’s decision to dismiss the case as against CAG for lack of personal jurisdiction.
Added
On December 30, 2024, the Defendant filed a Reply in Further Support of Peter Wang’s Motion for Reconsideration, which, in accordance with the Court’s practices, was filed as part of a Motion for Leave to File a Reply Brief, against which the Plaintiff filed an Opposition on January 17, 2025. 53 Table of Contents On January 2, 2024, MHP Americas, Inc.
Added
(“MHP”), sent a letter to Cenntro Electric Group Limited (“CEGL”) demanding payment allegedly owed by CEGL to MHP in the amount of: (i) $ 1,767,516.91 for unpaid invoices, (ii) $ 3,289,500 for total contract invoices and milestone payments for alleged breaches in connection with a master consulting services agreement dated August 8, 2022 and/or Statement of Work dated March 9, 2023 by and between the parties.
Added
On January 12, 2024, CEGL responded to the letter denying any breach and disputing the amounts claimed. Item 4. Mine Safety Disclosures. Not Applicable. PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

17 edited+0 added−1 removed19 unchanged
Biggest changeUnless the context specifically states or implies otherwise references in this Annual Report on Form 10-K to “we,” “us,” the “Company”, and “Cenntro” refer to Cenntro Inc. and its subsidiaries including: ● Able2rent GmbH (“Able2rent” when individually referenced), a German company and a 50% subsidiary of Cenntro Automotive Europe GmbH; ● Avantier Motors Company (“Avantier” when individually referenced), a Delaware company and a wholly owned subsidiary of Cenntro Electric Group, Inc.; ● Avantier Motors (Hong Kong) Limited (“Avantier HK” when individually referenced), a Hong Kong company and a wholly-owned subsidiary of Avantier; ● Cennatic Power, Inc.
Biggest changeUnless the context specifically states or implies otherwise references in this Annual Report on Form 10-K to “we,” “us,” the “Company”, and “Cenntro” refer to Cenntro Inc. and its subsidiaries including: ● Avantier Motors Corporation (“Avantier” when individually referenced), a Delaware company and a wholly owned subsidiary of Cenntro Electric Group, Inc.; ● Avantier Motors (Hong Kong) Limited (“Avantier HK” when individually referenced), a Hong Kong company and a wholly-owned subsidiary of Avantier; ● Antric GmbH (“Antric” when individually referenced), a German company and a 75% subsidiary of Cenntro Automotive Europe GmbH, 25% owned by Cenntro Electric Group (Europe) GmbH; ● Bison Motor Inc (“Bison” when individually referenced), Delaware company and a wholly owned subsidiary of Cenntro Electric Group, Inc.; ● Cennatic Power, Inc.
OTHER PERTINENT INFORMATION This Annual Report contains our audited consolidated and combined financial statements and related notes as of December 31, 2023 and 2022 and for the fiscal years ended December 31, 2023, and 2022 (“Audited Financial Statements”). Our Audited Financial Statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”).
OTHER PERTINENT INFORMATION This Annual Report contains our audited consolidated and combined financial statements and related notes as of December 31, 2024 and 2023 and for the fiscal years ended December 31, 2024, and 2023 (“Audited Financial Statements”). Our Audited Financial Statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”).
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 86 ITEM 13. Certain Relationships and Related Transactions, and Director Independence 88 ITEM 14. Principal Accounting Fees and Services 88 PART IV ITEM 15. Exhibits and Financial Statement Schedules 90 ITEM 16.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 88 ITEM 13. Certain Relationships and Related Transactions, and Director Independence 90 ITEM 14. Principal Accounting Fees and Services 90 PART IV ITEM 15. Exhibits and Financial Statement Schedules 91 ITEM 16.
As a result of the Redomiciliation, the jurisdiction of incorporation of the ultimate parent company of the Cenntro group of companies was changed from Australia to Nevada, and as a result of CEGL becoming a subsidiary of the Company. 2 Table of Contents The Redomiciliation was effected pursuant to a statutory scheme of arrangement under Australian law (the “ Scheme ”), whereby on February 27, 2024 (the “Implementation Date”), all of the issued ordinary shares of CEGL were exchanged for newly issued shares of common stock of the Company, on the basis of one share of the Company’s common stock, par value $0.0001 per share (the “ Common Stock ”) for every one ordinary shares of CEGL.
As a result of the Redomiciliation, the jurisdiction of incorporation of the ultimate parent company of the Cenntro group of companies was changed from Australia to Nevada, and as a result of CEGL becoming a subsidiary of the Company. 2 Table of Contents The Redomiciliation was effected pursuant to a statutory scheme of arrangement under Australian law (the “Scheme”), whereby on February 27, 2024 (the “Implementation Date”), all of the issued ordinary shares of CEGL were exchanged for newly issued shares of common stock of the Company, on the basis of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) for every one ordinary shares of CEGL.
Our combined financial statements as of December 31, 2023 and for the years ended December 31, 2023, and 2022, included in this Annual Report, are the combined financial statements of Cenntro and present periods prior to the Redomicile (as defined below).
Our combined financial statements as of December 31, 2024 and for the years ended December 31, 2024, and 2023, included in this Annual Report, are the combined financial statements of Cenntro and present periods prior to the Redomicile (as defined below).
Form 10-K Summary 92 SIGNATURES 92 1 Table of Contents ABOUT THIS ANNUAL REPORT Unless the context otherwise requires, the terms “Cenntro,” the “Company,” “we,” “us,” “our” and similar terms used in this Annual Report on Form 10-K refer (i), prior to the Redomiciliation (as defined herein) to Cenntro Electric Group Limited (CEGL), an Australian corporation, and its subsidiaries, and (ii), following the Re-domiciliation, to Cenntro Inc., a Nevada corporation, and its subsidiaries (including Cenntro Electric Group Limited).
Form 10-K Summary 93 SIGNATURES 93 1 Table of Contents ABOUT THIS ANNUAL REPORT Unless the context otherwise requires, the terms “Cenntro,” the “Company,” “we,” “us,” “our” and similar terms used in this Annual Report on Form 10-K refer (i), prior to the Redomiciliation (as defined herein) to Cenntro Electric Group Limited (“CEGL”), an Australian corporation, and its subsidiaries, and (ii), following the Re-domiciliation, to Cenntro Inc., a Nevada corporation, and its subsidiaries (including Cenntro Electric Group Limited).
ITEM 4. Mine Safety Disclosures 53 PART II ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 53 ITEM 6. [Reserved] 54 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 54 ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk 76 ITEM 8.
ITEM 4. Mine Safety Disclosures 54 PART II ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 54 ITEM 6. [Reserved] 55 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 55 ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk 78 ITEM 8.
(“Cennatic MX” when individually referenced), a Mexican company and 99% subsidiary of Cennatic and 1% subsidiary of Cenntro Automotive Corporation; ● Cenntro Automotive Corporation (“CAC” when individually referenced), a Delaware company and a wholly-owned subsidiary of Cenntro Electric Group Limited ACN 619 054 938; ● Cenntro Automotive Europe GmbH (formerly Tropos Motors Europe GmbH or “TME”) (“CAE” when individually referenced), a German company and wholly-owned subsidiary of Cenntro Electric Group, Inc; ● Cenntro Automotive S.A.S.
(“Cennatic MX” when individually referenced), a Mexican company and 99% subsidiary of Cennatic and 1% subsidiary of Cenntro Automotive Corporation; ● Cenntro Automotive Corporation (“CAC” when individually referenced), a Delaware company and a wholly-owned subsidiary of Cenntro Inc.; ● Cenntro Automotive Europe GmbH (formerly Tropos Motors Europe GmbH or “TME”) (“CAE” when individually referenced), a German company and wholly-owned subsidiary of Cenntro Electric Group, Inc; ● Cenntro Automotive S.A.S.
Financial Statements and Supplementary Data 76 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 76 ITEM 9A. Controls and Procedures 76 ITEM 9B. Other Information 77 ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 77 PART III ITEM 10. Directors, Executive Officers and Corporate Governance 78 ITEM 11. Executive Compensation 81 ITEM 12.
Financial Statements and Supplementary Data 78 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 78 ITEM 9A. Controls and Procedures 78 ITEM 9B. Other Information 79 ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 79 PART III ITEM 10. Directors, Executive Officers and Corporate Governance 80 ITEM 11. Executive Compensation 83 ITEM 12.
(“CEV Italy” when individually referenced), an Italian company and a wholly-owned subsidiary of CE EU; ● Cenntro Automotive Group Limited (“CAG HK” when individually referenced), a Hong Kong company and a wholly owned subsidiary of Cenntro Electric Group Limited ACN 619 054 938; ● Cenntro Technology Corporation (“CTC” when individually referenced), a California corporation and a wholly owned subsidiary of CEGI; ● Hangzhou Ronda Tech Co., Ltd.
(“CEV Italy” when individually referenced), an Italian company and a wholly-owned subsidiary of CE EU; ● Cenntro Automotive Group Limited (“CAG HK” when individually referenced), a Hong Kong company and a wholly owned subsidiary of Cenntro Inc.; ● Cenntro Technology Corporation (“CTC” when individually referenced), a California corporation and a wholly owned subsidiary of CEGI; ● Hangzhou Ronda Tech Co., Ltd.
(“Tooniu” when individually referenced), a PRC company and a wholly owned subsidiary of Cenntro Automotive Group Limited; ● Zhejiang Xbean Tech Co. Ltd. (“Zhejiang Xbean” when individually referenced), a PRC company and a wholly owned subsidiary of Zhejiang Sinomachinery Co., Ltd.; 4 Table of Contents PART I
(“Zhejiang Machinery” when individually referenced), a PRC company and a wholly owned subsidiary of Cenntro Automotive Group Limited; and ● Zhejiang Sinomachinery Co., Ltd. (“Zhejiang Sinomachinery” when individually referenced), a PRC company and a wholly owned subsidiary of Simachinery Equipment Limited. 4 Table of Contents PART I
(“Shengzhou Machinery” when individually referenced), a PRC company and a wholly owned subsidiary of Hangzhou Cenntro Autotech Co., Ltd.; ● Simachinery Equipment Limited (“Simachinery Equipment” when individually referenced), a Hong Kong company and a wholly owned subsidiary of Cenntro Automotive Group Limited; ● Teemak Power Corporation (“Teemak” when individually referenced), Delaware company and a wholly owned subsidiary of Cenntro Electric Group, Inc.; ● Teemak Power (Hong Kong) Limited (“Teemak HK” when individually referenced), a Hong Kong company and a wholly-owned subsidiary of Teemak; ● Zhejiang Cenntro Machinery Co., Ltd.
(“Shengzhou Machinery” when individually referenced), a PRC company and a 92.7% subsidiary of Hangzhou Ronda Tech Co., Ltd., 7.3% owned by Hangzhou Cenntro Autotech Co., Ltd.; ● Simachinery Equipment Limited (“Simachinery Equipment” when individually referenced), a Hong Kong company and a wholly owned subsidiary of Cenntro Automotive Group Limited; ● Teemak Power (Hong Kong) Limited (“Teemak HK” when individually referenced), a Hong Kong company and a wholly-owned subsidiary of Teemak; ● Zhejiang Cenntro Machinery Co., Ltd.
(“Hengzhong Tech” when individually referenced), a PRC company and a wholly owned subsidiary of Hangzhou Cenntro Autotech Co., Ltd.; ● Pikka Electric Corporation (“PEC” when individually referenced), a Delaware corporation and a wholly owned subsidiary of CEGI; ● Shengzhou Cenntro Machinery Co., Ltd.
(“Tooniu” when individually referenced), a PRC company and a wholly owned subsidiary of Cenntro Automotive Group Limited; ● Pikka Electric Corporation (“PEC” when individually referenced), a Delaware corporation and a wholly owned subsidiary of CEGI; ● Shengzhou Cenntro Machinery Co., Ltd.
(“CEGI” when individually referenced), a Delaware company and a wholly-owned subsidiary of Cenntro Electric Group Limited ACN 619 054 938; ● Cenntro EV Center Italy S.R.L.
(“CEGI” when individually referenced), a Delaware company and a wholly-owned subsidiary of Cenntro Inc.; ● Cenntro Elektromobilite Araçlar A.Ş (“CEA” when individually referenced) a Turkish company and wholly-owned subsidiary of CEBV); ● Cenntro EV Center Italy S.R.L.
Prior to the Redomiciliation, CEGL’s ordinary shares were registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and were listed on the Nasdaq Capital Market (“ Nasdaq ”).
The Company’s Common Stock issued in the Scheme was exempt from registration under Section 3(a)(10) of the Securities Act of 1933, as amended (the “Securities Act”). Prior to the Redomiciliation, CEGL’s ordinary shares were registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and were listed on the Nasdaq Capital Market (“Nasdaq”).
On February 27, 2024, Cenntro Electric Group Limited, a public company incorporated under the laws of Australia (“ CEGL ”) completed the redomiciliation of CEGL in accordance with the scheme implementation agreement, between CEGL and Cenntro Inc. (the “Redomiciliation”), a Nevada corporation (the “ Company ” or “ Cenntro ”).
On February 27, 2024, CEGL completed the redomiciliation of CEGL in accordance with the scheme implementation agreement, between CEGL and Cenntro (the “Redomiciliation”).
(“Zhejiang Machinery” when individually referenced), a PRC company and a wholly owned subsidiary of Cenntro Automotive Group Limited; ● Zhejiang Sinomachinery Co., Ltd. (“Zhejiang Sinomachinery” when individually referenced), a PRC company and a wholly owned subsidiary of Simachinery Equipment Limited; ● Jiangsu Tooniu Tech Co., Ltd.
(“Hengzhong Tech” when individually referenced), a PRC company and a wholly owned subsidiary of Hangzhou Cenntro Autotech Co., Ltd.; ● Hangzhou Hezhe Energy Technology Co. Ltd. (“Hangzhou Hezhe” when individually referenced), a PRC company and a 80% owned subsidiary of Hangzhou Ronda Tech Co., Ltd. ● Jiangsu Tooniu Tech Co., Ltd.
Removed
The Company’s Common Stock issued in the Scheme was exempt from registration under Section 3(a)(10) of the Securities Act of 1933, as amended (the “ Securities Act ”).

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed7 unchanged
Biggest changeHigh Low Fiscal Year Ended December 31, 2023 (1) First Quarter $ 0.87 $ 0.35 Second Quarter $ 0.49 $ 0.28 Third Quarter $ 0.50 $ 0.23 Fourth Quarter $ 1.59 $ 1.21 Fiscal Year Ended December 31, 2022 First Quarter $ 5.57 $ 1.05 Second Quarter $ 2.30 $ 1.34 Third Quarter $ 1.82 $ 0.95 Fourth Quarter $ 1.20 $ 0.26 (1) Accounts for a 1:10 reverse stock spit effective as of December 8, 2023. 53 Table of Contents Holders of Capital Stock As of December 31, 2023, we had 191 holders of our Common Stock.
Biggest changeHigh Low Fiscal Year Ended December 31, 2024 First Quarter $ 1.56 $ 1.00 Second Quarter $ 2.30 $ 1.34 Third Quarter $ 1.84 $ 1.11 Fourth Quarter $ 1.47 $ 1.02 Fiscal Year Ended December 31, 2023 (1) First Quarter $ 0.87 $ 0.35 Second Quarter $ 0.49 $ 0.28 Third Quarter $ 0.50 $ 0.23 Fourth Quarter $ 1.59 $ 1.21 (1) Accounts for a 1:10 reverse stock split effective as of December 8, 2023. 54 Table of Contents Holders of Capital Stock As of December 31, 2024, we had 240 holders of our Common Stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Shares of our Common Stock are currently quoted on the Nasdaq Capital Markets under the symbol “CENN”. We had 30,828,778 shares of Common Stock issued and outstanding as of December 31, 2023.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Shares of our Common Stock are currently quoted on the Nasdaq Capital Markets under the symbol “CENN”. We had 30,866,614 shares of Common Stock issued and outstanding as of December 31, 2024.

Item 7. Management's Discussion & Analysis

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

127 edited+49 added−38 removed131 unchanged
Biggest changeDollars) Combined Statements of Operations Data: Net revenues 22,079,905 8,941,835 Cost of goods sold (19,821,645 ) (9,455,805 ) Gross profit/(loss) 2,258,260 (513,970 ) Operating Expenses: Selling and marketing expenses (7,868,773 ) (6,525,255 ) General and administrative expenses (35,768,786 ) (32,822,709 ) Research and development expenses (8,469,241 ) (6,362,770 ) Provision for doubtful accounts — (5,986,308 ) Reverse of Deferred tax liabilities — 898,632 Impairment of ROU — (371,695 ) Impairment of Intangible assets — (2,995,440 ) Impairment of PPE (431,319 ) (550,402 ) Total operating expenses (52,538,119 ) (54,715,947 ) Loss from operations (50,279,859 ) (55,229,917 ) Other Income (Expense): Interest expense, net 402,414 (844,231 ) (Loss) Income from equity method investments (222,349 ) (12,651 ) Other (expense) income, net 621,633 (924,867 ) Loss on redemption of convertible promissory notes 12,507 (7,435 ) Change in fair value of convertible promissory notes and derivative liability 75,341 (37,774,928 ) Change in fair value of equity securities (2,600,721 ) (240,805 ) Convertible bond issuance cost — (5,589,336 ) Foreign currency exchange loss, net (848,781 ) (409,207 ) Impairment of Goodwill — (11,111,886 ) Gain (loss)from cross-currency swaps 8,664 — Impairment of Long-term investments (1,155,411 ) loss from acquisition of Antric (136,302 ) Loss on exercise of warrants (228,903 ) — Loss before income taxes (54,351,767 ) (112,145,263 ) Income tax expense (8,988 ) — Net loss (54,360,755 ) (112,145,263 ) Less: net loss attributable to non-controlling interests (161,430 ) (2,057,022 ) Net loss attributable to shareholders of the Company (54,199,325 ) (110,088,241 ) Comparison of the Years Ended December 31, 2023 and 2022 Net Revenues The following table presents our net revenue components by amount and as a percentage of the total net revenues for the periods presented.
Biggest changeDollars) Combined Statements of Operations Data: Net revenues 31,297,393 10,425,659 Cost of goods sold (23,688,846 ) (8,808,257 ) Gross profit 7,608,547 1,617,402 Operating Expenses: Selling and marketing expenses (7,364,678 ) (4,175,784 ) General and administrative expenses (26,321,333 ) (32,964,644 ) Research and development expenses (5,160,803 ) (7,721,459 ) Provision for credit losses (393,873 ) — Impairment of Goodwill (209,130 ) — Total operating expenses (39,449,817 ) (44,861,887 ) Loss from operations (31,841,270 ) (43,244,485 ) Other Expense: Interest income (expense), net (183,662 ) 402,415 (Loss) gain from long-term investments (299,772 ) 70,759 Other (expense) income, net (518,150 ) 521,708 Loss from early termination of lease contract (2,218,120 ) — Gain on redemption of convertible promissory notes — 12,507 Change in fair value of convertible promissory notes and derivative liability 7,194 75,341 Change in fair value of equity securities 1,019,285 (2,600,721 ) Foreign currency exchange loss, net 44,481 (941,995 ) Gain (loss)from cross-currency swaps (9,463 ) 8,664 Loss from acquisition in relation to the revaluation of the previously held equity interest (149,872 ) (136,302 ) Gain (Loss) on exercise of warrants 900 (228,903 ) Net loss from continuing operations before tax (34,148,449 ) (46,061,012 ) Income tax (benefit) expense 35,524 (8,988 ) Net loss from continuing operation (34,112,925 ) (46,070,000 ) Discontinued operations: Loss from discontinued operations, net of tax (10,795,692 ) (8,290,755 ) Net loss (44,908,617 ) (54,360,755 ) Less: net loss attributable to non-controlling interests (41,804 ) (161,430 ) Net loss attributable to the Company’s shareholders (44,866,813 ) (54,199,325 ) Comparison of the Years Ended December 31, 2024 and 2023 Net Revenues The following table presents our net revenue components by amount and as a percentage of the total net revenues for the periods presented.
The carrying amount of the long-lived asset or asset group is not recoverable when the sum of the undiscounted expected future net cash flows is less than the carrying value of the asset being evaluated. Impairment loss is calculated as the amount by which the carrying value of the asset exceeds its fair value.
The carrying amount of the long-lived asset or asset group is not recoverable when the sum of the undiscounted expected future net cash flows is less than the carrying value of the asset being evaluated. Impairment loss is calculated as the amount by which the carrying value of the asset exceeds its fair value.
We assume no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting forward-looking statements. 54 Table of Contents Our revenues and results of operations could differ materially from those projected in the forward-looking statements as a result of numerous factors, including, but not limited to, the following: the risk of significant natural disaster, the inability of our company to insure against certain risks, inflationary and deflationary conditions and cycles, currency exchange rates, and changing government regulations domestically and internationally affecting our products and businesses.
We assume no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting forward-looking statements. 55 Table of Contents Our revenues and results of operations could differ materially from those projected in the forward-looking statements as a result of numerous factors, including, but not limited to, the following: the risk of significant natural disaster, the inability of our company to insure against certain risks, inflationary and deflationary conditions and cycles, currency exchange rates, and changing government regulations domestically and internationally affecting our products and businesses.
Government grants The Company’s PRC based subsidiaries received government subsidies from certain local governments. The Company’s government subsidies consist of specific subsidies and other subsidies. Specific subsidies are subsidies that the local government has provided for a specific purpose, such as land fulfillment costs.
Government subsidies The Company’s PRC based subsidiaries received government subsidies from certain local governments. The Company’s government subsidies consist of specific subsidies and other subsidies. Specific subsidies are subsidies that the local government has provided for a specific purpose, such as land fulfillment costs.
Cost of goods sold Cost of goods sold mainly consists of production-related costs including costs of raw materials, consumables, direct labor, overhead costs, depreciation of plants and equipment, manufacturing waste treatment processing fees and inventory write-downs.
Cost of goods sold Cost of goods sold mainly consists of production-related costs including costs of raw materials, consumables, direct labor, overhead costs, depreciation of plants and equipment, manufacturing waste treatment processing fees, shipping cost and inventory write-downs.
We expect our selling and marketing expenses to increase as we introduce our new ECV models, further develop additional local dealership and service support networks to augment our expanding sales globally. 56 Table of Contents General and Administrative Expenses General and administrative expenses consist primarily of employee compensation and related expenses for administrative functions including finance, legal, human resources, and fees for third-party professional services.
We expect our selling and marketing expenses to increase as we introduce our new ECV models, further develop additional local dealership and service support networks to augment our expanding sales globally. 57 Table of Contents General and Administrative Expenses General and administrative expenses consist primarily of employee compensation and related expenses for administrative functions including finance, legal, human resources, and fees for third-party professional services.
As a result of the assessment made by CODM, the Company has only one reportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting. The Company’s long-lived assets are substantially located in the PRC and United States. The following table presents long-lived assets by geographic segment as of December 31, 2023 and 2022.
As a result of the assessment made by CODM, the Company has only one reportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting. The Company’s long-lived assets are substantially located in the PRC and United States. The following table presents long-lived assets by geographic segment as of December 31, 2024 and 2023.
Convertible promissory notes The Company has elected the fair value option to account for its convertible promissory notes issued during 2022. In accordance with ASC 825, the convertible promissory notes are marked-to-market at each reporting date with changes in fair value recorded as a component of other income (expense), in the consolidated statements of operations and comprehensive loss.
Convertible promissory notes The Company has elected the fair value option to account for its convertible promissory notes issued during 2023. In accordance with ASC 825, the convertible promissory notes are marked-to-market at each reporting date with changes in fair value recorded as a component of other income (expense), in the consolidated statements of operations and comprehensive loss.
The statute of limitations is extended to five years under special circumstances, where the underpayment of taxes is more than RMB100,000. In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion. U.S. federal tax matters are open to examination for years 2015 through 2023.
The statute of limitations is extended to five years under special circumstances, where the underpayment of taxes is more than RMB100,000. In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion. U.S. federal tax matters are open to examination for years 2015 through 2024.
We disclose the nature and terms, the income statement effects, the valuation methods and assumptions of the convertible promissory notes in Note 15 to our consolidated financial statements. Derivative liability Warrants recorded as liabilities at fair value in accordance with ASC 480 “Distinguishing Liabilities from Equity”.
We disclose the nature and terms, the income statement effects, the valuation methods and assumptions of the convertible promissory notes in Note 18 to our consolidated financial statements. Derivative liability Warrants recorded as liabilities at fair value in accordance with ASC 480 “Distinguishing Liabilities from Equity”.
We have not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholders’ equity or that are not reflected in our Audited Financial Statements.
We have not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholders’ equity or that are not reflected in our Unaudited Financial Statements.
Cost of goods sold The following table presents our cost of goods sold by amount and as a percentage of the total cost of goods sold for the periods presented. Year Ended December 31, 2023 2022 Amount % Amount % (Expressed in U.S.
Cost of goods sold The following table presents our cost of goods sold by amount and as a percentage of the total cost of goods sold for the periods presented. Year Ended December 31, 2024 2023 Amount % Amount % (Expressed in U.S.
For the years ended December 31, 2023 and 2022, the Company did not have any material interest or penalties associated with tax positions. The Company did not have any significant unrecognized uncertain tax positions as of December 31, 2023 or 2022.
For the years ended December 31, 2024 and 2023, the Company did not have any material interest or penalties associated with tax positions. The Company did not have any significant unrecognized uncertain tax positions as of December 31, 2024 or 2023.
Significant accounting estimates reflected in the Company’s consolidated financial statements include, but are not limited to, estimates and judgments applied in determination of provision for doubtful accounts, lower of cost and net realizable value of inventories, impairment losses for long-lived assets and investments, goodwill, valuation allowance for deferred tax assets and fair value measurement for share-based compensation expense, convertible promissory notes and warrants.
Significant accounting estimates reflected in the Company’s consolidated financial statements include, but are not limited to, estimates and judgments applied in determination of provision for credit losses, lower of cost and net realizable value of inventories, impairment losses for long-lived assets and investments, valuation allowance for deferred tax assets and fair value measurement for share-based compensation expense, convertible promissory notes and warrants.
While management believes its judgments, estimates and assumptions are reasonable, they are based on information presently available and actual results may differ significantly from those estimates under different assumptions and conditions. 68 Table of Contents Basis of presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
While management believes its judgments, estimates and assumptions are reasonable, they are based on information presently available and actual results may differ significantly from those estimates under different assumptions and conditions. Basis of presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.
The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. 75 Table of Contents Non-controlling Interest A non-controlling interest in subsidiaries represents the portion of the equity (net assets) in the subsidiaries not directly or indirectly attributable to the Company’s shareholders.
The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants Non-controlling Interest A non-controlling interest in subsidiaries represents the portion of the equity (net assets) in the subsidiaries not directly or indirectly attributable to the Company’s shareholders.
On March 27, 2023, Antric signed another non-cancellable operating lease agreement for approximately 2,949 square feet in Bochum, Germany, the lease period starts on April 1, 2023 and ends on December 31, 2026. The monthly rent increased to €8,597.80 (or approximately $9,510.89).
On March 27, 2023, Antric signed another non-cancellable operating lease agreement for approximately 2,949 square feet in Bochum, Germany, the lease period starts on April 1, 2023 and ends on December 31, 2026. The monthly rent increased to €8,597.80 (or approximately $9,345.81).
Gross margin of vehicle sales is defined as gross profit of vehicle sales divided by total revenue of vehicle sales 57 Table of Contents Results of Operations The following table sets forth a summary of our statements of operations for the periods indicated: Year Ended December 31, 2023 2022 (Expressed in U.S.
Gross margin of vehicle sales is defined as gross profit of vehicle sales divided by total revenue of vehicle sales 58 Table of Contents Results of Operations The following table sets forth a summary of our statements of operations for the periods indicated: Year Ended December 31, 2024 2023 (Expressed in U.S.
The Company does not expect that its assessment regarding unrecognized tax positions will materially change over the next 12 months. Foreign currency translation and transaction The consolidated financial statements are presented in United States dollars (“USD” or “$”). The functional currency of certain of CEGL’s PRC subsidiaries is the Renminbi (“RMB”).
The Company does not expect that its assessment regarding unrecognized tax positions will materially change over the next 12 months. 75 Table of Contents Foreign currency translation and transaction The consolidated financial statements are presented in United States dollars (“USD” or “$”). The functional currency of certain of the Company’s PRC subsidiaries is the Renminbi (“RMB”).
In June 2021, we signed two non-cancellable operating lease agreements for approximately 11,690 square feet and 3,767 square feet, respectively, of two floors of an office building in Hangzhou, China. The lease period for each lease agreement began in June 2021 and ends in May 2025.
Contractual Obligations In June 2021, we signed two non-cancellable operating lease agreements for approximately 11,700 square feet and 3,767 square feet, respectively, of two floors of an office building in Hangzhou, China. The lease period for each lease agreement began in June 2021 and ends in May 2025.
The carrying value of cash and cash equivalents, restricted cash, wealth management products, accounts receivable, prepayment, goodwill and other current assets, accounts payable, accrued expenses and other current liabilities and amount due from and due to related party, current were approximate fair value because of the short-term nature of these items.
The carrying value of cash and cash equivalents, restricted cash, wealth management products, accounts receivable, prepayment, goodwill and other current assets, accounts payable, other current liabilities and amount due from and due to related parties, current were approximate fair value because of the short-term nature of these items.
Since inception in 2013 through December 31, 2023, we have spent over approximately $90.0 million in research and development activities related to our operations. We plan to increase our research and development expenditure over the long term as we build on our technologies in vehicle development, driving control, cloud-based platforms, and innovations for promoting sustainable energy.
Since inception in 2013 through December 31, 2024, we have spent over approximately $94.4 million in research and development activities related to our operations. We plan to increase our research and development expenditure over the long term as we build on our technologies in vehicle development, driving control, cloud-based platforms, and innovations for promoting sustainable energy.
The rent is COP 46,796,001.49 (or approximately $10,344.77) per month and the value of the lease fee shall be readjusted in a proportion equal to the consumer price index (CPl) certified by DANE as of December 31 of the immediately preceding year, plus two (2) points.
The rent is COP 46,796,001.49 (or approximately $11,778.71) per month and the value of the lease fee shall be readjusted in a proportion equal to the consumer price index (CPl) certified by DANE as of December 31 of the immediately preceding year, plus two (2) points.
The term of this lease is one year, beginning on April 5, 2023 and ending on April 4, 2024. The monthly rent is $5,950. On March 25, 2022, we completed the acquisition of TME, and change its name to Cenntro Automotive Europe GmbH ("CAE”).
The term of this lease is one year, beginning on April 5, 2023 and ending on April 4, 2024. The lease was not renewed. The monthly rent is $5,950. On March 23, 2022, we completed the acquisition of TME, and change its name to Cenntro Automotive Europe GmbH ("CAE”).
The consideration received remains a contractual liability until goods or services have been provided to the customer. For the years ended December 31, 2023 and 2022, the Company recognized $464,636 and $1,105,076 revenue that was included in contractual liabilities as of January 1, 2023 and 2022, respectively.
The consideration received remains a contractual liability until goods or services have been provided to the customer. For the years ended December 31, 2024 and 2023, the Company recognized$1,120,355 and $464,636 revenue that was included in contractual liabilities as of January 1, 2024 and 2023, respectively.
Impairment loss for long-lived assets of $431,319 and $3,917,537 were recorded in the Company’s consolidated statements of operations and comprehensive loss for the years ended December 31, 2023 and 2022, respectively. Goodwill Goodwill represents the future economic benefits arising from other assets acquired in a business combination.
Impairment loss for long-lived assets of nil and $431,319 were recorded in the Company’s consolidated statements of operations and comprehensive loss for the years ended December 31, 2024 and 2023, respectively. Goodwill Goodwill represents the future economic benefits arising from other assets acquired in a business combination.
Change in fair value of equity securities A loss in the change in fair value of equity securities for the year ended December 31, 2023 was approximately $2.6 million compared to approximately $0.2 million of a loss in the change in fair value of equity securities for the year ended December 31, 2022.
Change in fair value of equity securities A gain in the change in fair value of equity securities for the year ended December 31, 2024 was approximately $1.0 million compared to approximately $2.6 million of a loss in the change in fair value of equity securities for the year ended December 31, 2023.
If after assessing these qualitative factors, the Company determines it is "more-likely-than not" that the fair value is less than the carrying value, a quantitative assessment of goodwill is required.
If after assessing these qualitative factors, the Company determines it is “more-likely-than not” that the fair value is less than the carrying value, a quantitative assessment of goodwill is required.
Actual results could vary materially as a result of a number of factors, including: • The costs of bringing our new facilities into operation; • The timing and costs involved in rolling out new ECV models to market; • Our ability to manage the costs of manufacturing our ECVs; • The costs of maintaining, expanding and protecting our intellectual property portfolio, including potential litigation costs and liabilities; • Revenues received from sales of our ECVs; • The costs of additional general and administrative personnel, including accounting and finance, legal and human resources, as well as costs related to litigation, investigations, or settlements; • Our ability to collect future revenues; and • Other risks discussed in the section titled “ Risk Factors .” For the twelve months from the date hereof, we also plan to continue implementing measures to increase revenues and control operating costs and expenses, implementing comprehensive budget controls and operational assessments, implementing enhanced vendor review and selection processes as well as enhancing internal controls. 65 Table of Contents Long-Term Liquidity Requirements In the long-term, we plan to regionalize the manufacturing and supply chain relating to certain components of our ECVs in the geographic markets in which our ECVs are sold.
Actual results could vary materially as a result of a number of factors, including: • The costs of bringing our new facilities into operation; • The timing and costs involved in rolling out new ECV models to market; • Our ability to manage the costs of manufacturing our ECVs; • The costs of maintaining, expanding and protecting our intellectual property portfolio, including potential litigation costs and liabilities; 63 Table of Contents • Revenues received from sales of our ECVs; • The costs of additional general and administrative personnel, including accounting and finance, legal and human resources, as well as costs related to litigation, investigations, or settlements; • Our ability to collect future revenues; and • Other risks discussed in the section titled “ Risk Factors .” For the twelve months from the date hereof, we also plan to continue implementing measures to increase revenues and control operating costs and expenses, implementing comprehensive budget controls and operational assessments, implementing enhanced vendor review and selection processes as well as enhancing internal controls.
Other income (expense), net Other income net for the year ended December 31, 2023 was approximately $0.6 million, representing a change of approximately $1.5 million compared to approximately $0.9 million of other expense, net for the year ended December 31, 2022.
Other income (expense), net Other expense net for the year ended December 31, 2024 was approximately $0.5 million, representing a change of approximately $1.1 million compared to approximately $0.5 million of other income, net for the year ended December 31, 2023.
On July 20, 2022, Antric signed a non-cancellable operating lease agreement for approximately 4,361 square feet in Bochum, Germany, the lease period ends on December 31, 2026. The monthly rent is €3,605.26 (or approximately $3,988.14). On September 1, 2022, the lease area increased to 7,326 square feet and the monthly rent increased to €6,000.32 (or approximately $6,637.55).
On July 20, 2022, Antric signed a non-cancellable operating lease agreement for approximately 4,361 square feet in Bochum, Germany, the lease period ends on December 31, 2026. The monthly rent is €3,605.26 (or approximately $3,918.92). On September 1, 2022, the lease area increased to 7,326 square feet and the monthly rent increased to €6,000.32 (or approximately $6,522.35).
The additional deposit is €18,000.96 (or approximately $19,912.66). On January 20, 2023, Antric signed another non-cancellable operating lease agreement for approximately 252 square feet in Bochum, Germany, the lease period starts on February 1, 2023 and ends on December 31, 2026. The monthly rent increased to €6,315.38 (or approximately $6,986.07).
The additional deposit is €18,000.96 (or approximately $19,567.04). On January 20, 2023, Antric signed another non-cancellable operating lease agreement for approximately 252 square feet in Bochum, Germany, the lease period starts on February 1, 2023 and ends on December 31, 2026. The monthly rent increased to €6,315.38 (or approximately $6,864.82).
Net revenues ended December 31, 2023 and 2022 were generated from (a) vehicles sales, which primarily represent net revenues from sales of Metro® vehicles (including vehicle kits), Logistar™ 200, Logistar™ 260 and Logistar™ 100, (b) sales of ECV spare-parts related to our Metro® vehicles, and (c) other sales, which primarily were: (i) the sales of inventory of outsourced ECV batteries and (ii) charges on services provided to channel partners for technical developments and assistance with vehicle homologation or certification .
Net revenues ended December 31, 2024 and 2023 were generated from (a) vehicles sales, which primarily represent net revenues from sales of Metro® vehicles (including vehicle kits), Logistar™ 200, Logistar™ 210, Logistar™ 210V, Logistar™ 260, Logistar™ 400, Antric®, Avantier™, Logistar™ 100, Neibor® 150 and Clubcar, (b) sales of ECV spare-parts related to our Metro® vehicles, and (c) other sales, which primarily were: (i) the sales of inventory of outsourced ECV batteries and (ii) charges on services provided to channel partners for technical developments and assistance with vehicle homologation or certification.
Our current business strategy for the next twelve months includes (i) the continued rollout of our new ECV models and green energy related products in North America and Europe, as applicable and (ii) the establishment and development of local distribution channels in the United States and the European Union.
Our current business strategy for the next twelve months includes (i) the continued rollout of our new ECV models in North America and Europe, as applicable and (ii) the establishment and development of local distribution channels in the United States.
Operating expenses Our operating expenses consist of general and administrative, selling and marketing expenses, and research and development expenses. General and administrative expenses are the most significant components of our operating expenses. Operating expenses also include provision for doubtful accounts and impairment loss for long- lived assets.
Operating expenses Our operating expenses consist of general and administrative, selling and marketing expenses, and research and development expenses. General and administrative expenses are the most significant components of our operating expenses. Operating expenses also include provision for credit losses and impairment loss for long- lived assets and goodwill.
Derivatives are recorded in the Consolidated Balance Sheets at fair value. The fair value is based upon either market quotes for actively traded instruments or independent bids for nonexchange traded instruments. The accounting for changes in fair value of a derivative instrument depends on whether the instrument has been designated and qualifies as part of a hedging relationship.
The fair value is based upon either market quotes for actively traded instruments or independent bids for nonexchange traded instruments. The accounting for changes in fair value of a derivative instrument depends on whether the instrument has been designated and qualifies as part of a hedging relationship.
Year Ended December 31, 2023 2022 Amount % Amount % (Expressed in U.S.
Year Ended December 31, 2024 2023 Amount % Amount % (Expressed in U.S.
The Company’s financial instruments not reported at fair value primarily consist of cash and cash equivalents, restricted cash, accounts receivable, prepayments and other current assets, amount due from and due to related parties, accounts payable and accrued expenses and other current liabilities.
The Company’s financial instruments not reported at fair value primarily consist of cash and cash equivalents, restricted cash, accounts receivable, other current assets, amount due from and due to related parties, accounts payable and other current liabilities and short-term loans.
Income(loss) from and impairment on equity method investments Entities over which we have the ability to exercise significant influence but do not have a controlling interest through investment in common shares, or in-substance common shares, are accounted for using the equity method.
(Loss) gain from long-term investments Entities over which we have the ability to exercise significant influence but do not have a controlling interest through investment in common shares, or in-substance common shares, are accounted for using the equity method.
Available-for-sale investments and Debt Security investments The Company’s available-for-sale investment consist of wealth management products purchased from banks and convertible loans. The Company’s short-term available-for-sale investment are classified as short-term investments on the consolidated balance sheets based on the contractual maturity date which is less than one year.
The Company’s short-term available-for-sale investment are classified as short-term investments on the consolidated balance sheets based on the contractual maturity date which is less than one year. The wealth management products purchased from banks are stated at the net asset value The Company’s debt security investments consist of convertible loan.
Estimated useful lives are as follows: Buildings 20 years Machinery and equipment 5-10 years Office equipment 5 years Motor vehicles 3-5 years Leasehold improvement 3-10 years Others 3 years The Company reassesses the reasonableness of the estimates of useful lives and residual values of long-lived assets when events or changes in circumstances indicate that the useful lives and residual values of a major asset or a major category of assets may not be reasonable.
Estimated useful lives are as follows: Land Infinite Plant and building 20 years Machinery and equipment 5-10 years Office equipment 5 years Motor vehicles 3-5 years Leasehold improvement Over the shorter of the lease term or estimated useful lives The Company reassesses the reasonableness of the estimates of useful lives and residual values of long-lived assets when events or changes in circumstances indicate that the useful lives and residual values of a major asset or a major category of assets may not be reasonable.
Working Capital As of December 31, 2023, our working capital was approximately $75. 6 million, as compared to a working capital of approximately $132.8 million as of December 31, 2022.
Working Capital As of December 31, 2024, our working capital was approximately $36.8 million, as compared to a working capital of approximately $75.6 million as of December 31, 2023.
Pursuant to each agreement, we paid the first six months of our rent obligations in June 2021 and thereafter will be obligated to make rental payments in advance semi-annually. The total annual base rent under these two lease agreements is $171,397 for the term ending May 2022 and $173,987 for the term ending May 2023.
Pursuant to each agreement, we paid the first six months of our rent obligations in June 2021 and thereafter will be obligated to make rental payments in advance semi-annually. The total annual base rent under these two lease agreements is $186,866 for the term ending May 2023 and $167,521 for the term ending May 2024.
The Company determines the appropriate classification of its investments in equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. The private equity funds are measured at fair value with gains and losses recognized in earnings.
Changes in fair values are reflected in the consolidated statements of operations and comprehensive loss. The Company determines the appropriate classification of its investments in equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. The private equity funds are measured at fair value with gains and losses recognized in earnings.
Some of the limitations are: • such measures do not reflect our cash expenditures; • such measures do not reflect changes in, or cash requirements for, our working capital needs; • although depreciation and amortization are recurring, non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and such measures do not reflect any cash requirements for such replacements; and • the exclusion of stock-based compensation expense, which has been a significant recurring expense and will continue to constitute a significant recurring expense for the foreseeable future, as equity awards are expected to continue to be an important component of our compensation strategy. 61 Table of Contents Due to these limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business.
Some of the limitations are: • such measures do not reflect our cash expenditures; • such measures do not reflect changes in, or cash requirements for, our working capital needs; • although depreciation and amortization are recurring, non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and such measures do not reflect any cash requirements for such replacements; and • the exclusion of stock-based compensation expense, which has been a significant recurring expense and will continue to constitute a significant recurring expense for the foreseeable future, as equity awards are expected to continue to be an important component of our compensation strategy.
Change in fair value of convertible promissory notes and derivative liability An income in the change in fair value of convertible promissory notes and derivative liability for the year ended December 31, 2023 was approximately $0.08 million compared to approximately $37.8 million of a loss in the change in fair value of convertible promissory notes and derivative liability for the year ended December 31, 2022.
Change in fair value of convertible promissory notes and derivative liability An income in the change in fair value of convertible promissory notes and derivative liability for the year ended December 31, 2024 was approximately nil compared to approximately $0.08 million of an income in the change in fair value of convertible promissory notes and derivative liability for the year ended December 31, 2023.
Starting from the last quarter of 2021, we began generating revenue from the sales of the Logistar™ 200, Logistar™ 100, Logistar™ 260, Teemak™ and Neibor® 150 in Europe.
Starting from the last quarter of 2021, we began generating revenue from the sales of the Logistar™ 200, Logistar™ 100, Logistar™ 260, Teemak™ and Neibor® 150 in Europe, Clubcar, Logistar™ 210 and Logistar™ 260 in Asia, Avantier™ and Logistar™ 400 in the US.
We believe that non-GAAP financial information, when taken collectively, may be helpful to investors in assessing operating performance. Adjusted EBITDA is a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP.
We use Adjusted EBITDA to evaluate ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors in assessing operating performance. Adjusted EBITDA is a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP.
The increase in selling and marketing expenses in 2023 was primarily attributed to the increase in service fees related to European market and distribution channel research and salary and social insurance of approximately $1.6 million and $0.7 million, respectively, offset by a decrease in marketing expense of approximately $1.1 million.
The increase in selling and marketing expenses in 2024 was primarily attributed to the increase in service fees related to global market and distribution channel research and marketing expense of approximately $0.7 million and $2.8 million, respectively, offset by a decrease in share-based compensation and salary and social insurance of approximately $0.1 million and $0.2 million, respectively.
Net interest income was approximately $0.4 million for the year ended December 31, 2023, a change of approximately $1.2 million or approximately 146.3% compared to the approximately $0.8 million in interest expense for the year ended December 31, 2022.
Net interest expense was approximately $0.2 million for the year ended December 31, 2024, a change of approximately $0.6 million compared to the approximately $0.4 million in interest income for the year ended December 31, 2023.
TME signed a non-cancellable operating lease agreement for approximately 5,212 square meters in 2019, the lease period starts on July 1, 2019 and ends on June 30, 2024, the monthly rent is €18,891 (or approximately $20,468). On August 31, 2023, we completed the acquisition with Antric GmbH in Germany.
TME signed a non-cancellable operating lease agreement for approximately 5,212 square meters in 2019, the lease period starts on July 1, 2019 and ends on June 30, 2024, the monthly rent is €18,891 (or approximately $20,534.52).
Gross Profit/(Loss) Gross profit for the year ended December 31, 2023 was approximately $2.3 million, an increase of approximately $2.8 million from approximately $0.5 million of gross loss for the year ended December 31, 2022. For the years ended December 31, 2023 and 2022, our overall gross margin was approximately 10.2% and -5.7%, respectively.
Gross Profit Gross profit for the year ended December 31, 2024 was approximately $7.6 million, an increase of approximately $6.0 million from approximately $1.6 million for the year ended December 31, 2023. For the years ended December 31, 2024 and 2023, our overall gross margin was approximately 24.3% and 15.5%, respectively.
For the Years Ended December 31, 2023 2022 Period end USD: RMB exchange rate 7.0999 6.8972 Average USD: RMB exchange rate 7.0809 6.7290 Period end USD: EUR exchange rate 1.1062 0.9348 Average USD: EUR exchange rate 1.0817 0.9493 74 Table of Contents Foreign currency transactions denominated in currencies other than functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions.
For the Years Ended December 31, 2024 2023 Period end USD: RMB exchange rate 7.2993 7.0999 Average USD: RMB exchange rate 7.1957 7.0809 Period end USD: EUR exchange rate 1.0351 1.1062 Average USD: EUR exchange rate 1.0820 1.0817 Foreign currency transactions denominated in currencies other than functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions.
The Company considers available quantitative and qualitative evidence in evaluating potential impairment of its long-term investments. An impairment charge is recorded when the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. The adjusted carrying amount of the assets become new cost basis.
An impairment charge is recorded when the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. The adjusted carrying amount of the assets become new cost basis.
The increase in general and administrative expenses in 2023 was primarily attributed to (i) an increase in share-based compensation of approximately $1.4 million, (ii) an increase in ROU amortization of approximately $2.1 million, (iii) an increase in ROU interest expense of approximately $1.0 million, (iv) an increase in office expense of approximately $0.6 million, (v) an increase in others of approximately $0.4 million, which mainly related to garage liability insurance fee, and (vi) the increase in rental expense, travelling fee, freight and depreciation of approximately $0.6 million, $0.3 million, $0.3 million and $0.6 million, respectively, offset by the decrease in salary and social care expense and FOH stripping fee of approximately $2.8 million and $1.8 million, respectively. 59 Table of Contents Research and Development Expenses Research and development expenses for the year ended December 31, 2023 were approximately $8.5 million, an increase of approximately $2.1 million or approximately 33.1% from approximately $6.4 million for the year ended December 31, 2022.
The decrease in general and administrative expenses in 2024 was primarily attributed to (i) a decrease in share-based compensation of approximately $1.7 million, (ii) a decrease in legal and professional fee of approximately $3.2 million, (iii) a decrease in salary and social care expense of approximately $0.7 million, (iv) a decrease in office expense of approximately $1.1 million, (v) a decrease in rental expense of approximately $0.2 million, offset by the increase in ROU amortization, freight and leasehold improvement depreciation of approximately $0.2 million and $0.2 million, respectively. 60 Table of Contents Research and Development Expenses Research and development expenses for the year ended December 31, 2024 were approximately $5.2 million, a decrease of approximately $2.6 million or approximately 33.2% from approximately $7.7 million for the year ended December 31, 2023.
An impairment charge is recorded when the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. The adjusted carrying amount of the assets become a new cost basis. Key Operating Metrics We prepare and analyze operating and financial data to assess the performance of our business and allocate our resources.
An impairment charge is recorded when the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. The adjusted carrying amount of the assets become a new cost basis.
The following table sets forth our key performance indicators for the years ended December 31, 2023 and 2022. Year ended December 31 2023 2022 Gross margin of vehicle sales 11.7 % -0.27 % Gross margin of vehicle sales .
The following table sets forth our key performance indicators for the years ended December 31, 2024 and 2023. Year ended December 31 2024 2023 Gross margin of vehicle sales 24.9 % 18.8 % Gross margin of vehicle sales .
The increase in cost of goods sold in 2023 was primarily attributable to the increase of cost of vehicle sales of approximately $10.5 million. The increase of cost of vehicle sales was mainly caused by the increased vehicle sales during the year 2023.
The increase in cost of goods sold in 2024 was primarily attributable to the increase of cost of vehicle sales of approximately $8.4 million and the increase of inventory write-down of approximately $5.56 million. The increase of cost of vehicle sales was mainly caused by the increased vehicle sales during the year 2024.
For the year ended December 31, 2023, net revenues from Europe, North America, Asia (including China) and Latin America as a percentage of total revenues was 73.4%, 4.6%, 21.8% and 0.2%, respectively, compared to 78.9%, 7.8%, 13.3% and nil, respectively for the corresponding period in 2022.
For the year ended December 31, 2024, net revenues from Europe, North America, Asia (including China) and other regions (including Africa and Latin America) as a percentage of total revenues was 18.3%, 66.7%, 14.6% and 0.4%, respectively, compared to 43.8%, 9.8%, 46.1% and 0.3%, respectively for the corresponding period in 2023.
Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit. Impairment loss for goodwill of $nil and $11,111,886 were recorded for the years ended December 31, 2023 and 2022, respectively.
Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit. 72 Table of Contents Impairment loss for goodwill of $209,130 and nil was recorded for the years ended December 31, 2024 and 2023.
The costs and related accumulated depreciation of assets sold or otherwise retired are eliminated from the Company’s accounts and any gain or loss is included in the consolidated statements of operations and comprehensive loss. The cost of maintenance and repair is charged to expenses as incurred, whereas significant renewals and betterments are capitalized.
The costs and related accumulated depreciation of assets sold or otherwise retired are eliminated from the Company’s accounts and any gain or loss is included in the consolidated statements of operations and comprehensive loss.
Net cash used in operating activities for the year ended December 31, 2023 was primarily attributable to (i) our net loss of approximately $5 4.4 million and adjusted for non-cash items of approximately $18.3 million, which primarily consisted of amortization of operating lease right-of-use asset, share based compensation expense, impairment of long-term investments, depreciation and amortization, loss (gain) on disposal of long-term investment, loss from equity securities investment , foreign currency exchange loss, impairment of slow-moving inventories, impairment of PPE and intangible assets, loss on exercise of warrants, equity pick up loss of the investment and changes in fair value of equity securities of approximately $4.5 million, $5.2 million, $1.2 million, $1. 7 million,$ 0.1 million, $1.4 million, $1.5 million, $0.7 million, $0.4 million, $0.2 million, $0.2 million and $1.2 million, respectively, (ii) the decrease in accrued expense and other current liabilities and operating lease liabilities of approximately $1.1 million and $4.0 million respectively, (iii) increase in account receivable, accounts payable, deferred revenue, inventories and prepayments and other assets of approximately $5.9 million, $3.1 million, $2.5 million, $12.2 million and $4.6 million, respectively. 66 Table of Contents Investing Activities Net cash used in investing activities was approximately $16.4 million for the year ended December 31, 2023.
Net cash used in operating activities for the year ended December 31, 2024 was primarily attributable to (i) our net loss of approximately $44.9 million and adjusted for non-cash items of approximately $19.9 million, which primarily consisted of amortization of operating lease right-of-use asset, share based compensation expense, depreciation and amortization, foreign currency exchange loss, loss from early termination of lease contract and impairment of slow-moving inventories of approximately $4.6 million, $3.4 million, $2.0 million, $1.1 million, $2.2 million and $6.5 million, respectively, (ii) the decrease in account receivable, inventories, accrued expense and other current liabilities and operating lease liabilities of approximately $1. 4 3 million, $7.9 million, $1.7 million and $4.0 million, respectively, (iii) increase in deferred revenue and prepayments and other assets of approximately $0.5 million and $0.2 million, respectively.
For equity investments that do not have readily determinable fair values the Company measures the equity investment at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the Company. 72 Table of Contents Impairment for long-term investment The Company reviews its long-term investments for impairment whenever an event or circumstance indicates that other-than-temporary impairment has occurred.
For equity investments that do not have readily determinable fair values the Company measures the equity investment at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the Company.
We compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP measures only supplementally. As noted in the table below, Adjusted EBITDA includes adjustments to exclude the impact of stock-based compensation expense and material infrequent items. It is reasonable to expect that these items will occur in future periods.
As noted in the table below, Adjusted EBITDA includes adjustments to exclude the impact of stock-based compensation expense and material infrequent items. It is reasonable to expect that these items will occur in future periods.
The monthly rent is $29,225.38 and the annual increase is the higher of a) the consumer price index, or b) 2.5%. On December 15, 2022, we signed a non-cancellable operating lease agreement for approximately 41,160 square feet as a facility in Howell, New Jersey.
The monthly rent is $29,225.38 and the annual increase is the higher of a) the consumer price index, or b) 2.5%. 66 Table of Contents On December 8, 2022, we signed a non-cancellable operating lease agreement for approximately 10,656 square feet as a headquarters and service center in Dominica Republic.
As of December 31, 2023, we have developed six series of commercial vehicle models, Metro®, Logistar™, Logimax™, Avantier™, Teemak™ and Antric One. We have successfully begun to produce and deliver these models into the global markets, apart from Logimax™.
As of December 31, 2024, we have developed five series of commercial vehicle models, Metro®, Logistar™, Logimax™, Avantier™ and Teemak™. We also provide other delivery platforms including Antric One and iChassie, along with Electric Charger Products. We have successfully begun to produce and deliver these models into the global markets, apart from Logimax™.
The rent is $9,000 per month and the annual increase is 5%. 67 Table of Contents On December 8, 2022, we signed a non-cancellable operating lease agreement for approximately 10,656 square feet as a headquarters and service center in Dominica Republic. The lease period commenced on February 15, 2023 and ends five years.
The lease period commenced on February 15, 2023 and ends five years. The rent is $9,000 per month and the annual increase is 5%. On July 28, 2022, we signed a non-cancellable operating lease agreement for approximately 12,000 square feet as an EV center in Jacksonville, Florida.
The estimated fair value adjustment is presented in a respective single line item within other expense in the consolidated statement of operations because the change in fair value of the convertible notes was not attributable to instrument-specific credit risk. 69 Table of Contents In connection with the issuances of convertible promissory notes, the Company issued investor warrants and placement agent warrants to purchase ordinary shares of the Company.
The estimated fair value adjustment is presented in a respective single line item within other expense in the consolidated statement of operations because the change in fair value of the convertible notes was not attributable to instrument-specific credit risk.
The lease period began on February 1, 2023 and ends five years, the first annual base rent is $493,920 and the annual increase is 3%. On December 29, 2022, we signed a non-cancellable operating lease agreement with BAL Freeway Associates, LLC for approximately 64,000 square feet as a facility.
On December 29, 2022, we signed a non-cancellable operating lease agreement with BAL Freeway Associates, LLC for approximately 64,000 square feet as a facility in Ontario, California. The lease period commenced on April 1, 2023 and ends five years following a one-month rent abatement period. The base rent for the first year is $115,200 per month.
Based on the updated observed learning rate, BNEF’s 2022 Battery Price Survey predicts that average pack prices should fall below $100/kWh by 2026.
Lithium prices are expected to ease as more extraction and refining capacity comes online. Based on the updated observed learning rate, BNEF’s 2022 Battery Price Survey predicts that average pack prices should fall below $100/kWh by 2026.
On August 4, 2022, we signed a non-cancellable operating lease agreement in Mexico as a facility. For the first 12 months, the rentable area is 58,413 square feet.
The lease period began on February 1, 2023 and ends five years, the first annual base rent is $493,920 and the annual increase is 3%. On August 4, 2022, we signed a non-cancellable operating lease agreement in Mexico as a facility. For the first 12 months, the rentable area is 58,413 square feet.
Interest income (expense), net Interest income (expense), net, consists of interest income on deposit and short-term products and interest expense on convertible bonds.
Interest income (expense), net Interest expense, net, consists of interest income on deposit and wealth management products purchased from banks and interest expense on convertible bonds.
Shipping and handling costs for product shipments occur prior to the customer obtaining control of the goods are accounted for as fulfilment costs rather than separate performance obligations and recorded as sales and marketing expenses.
All transactions are settled in cash within the normal credit period, and there is no financing component. 73 Table of Contents Shipping and handling costs for product shipments occur prior to the customer obtaining control of the goods are accounted for as fulfilment costs rather than separate performance obligations and recorded as sales and marketing expenses.
The increased loss was attributed to a downward adjustment of approximately $2.3 million due to the fair value change of our investment on participating shares in Micro Money Fund SPC with an original investment value of $5 million, and a loss of $1.4 million related to the redemption of $1 million of Micro Money Fund, offset by an upward adjustment of approximately $1.0 million from our investment on partnership shares in MineOne Fix Income Investment IL.P with an original investment value of $25 million.
The increased gain was attributed to an upward adjustment of approximately $1.0 million from our investment on partnership shares in MineOne Fix Income Investment I L.P with an original investment value of $25 million, and the Company made redemption of almost all funds in Micro Money Fund SPC, which brought $3.64 million loss in fair value change in 2023.
As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of its certain fund investment.
The warrants are measured at each reporting period, with changes in fair value recognized in the statement of operations. As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of its certain fund investment.
The rent is $9,000 per month and the annual increase is 5%. On March 22, 2023, we signed a non-cancellable operating lease agreement for approximately 26,579 square feet as a local plant in Colombia, the lease period began on May 1, 2023 and the lease term is two years.
On 17 January 2023, Cedar transferred the lease to CEGE, effectively from 1 February, 2023. 65 Table of Contents On March 22, 2023, we signed a non-cancellable operating lease agreement for approximately 26,579 square feet as a local plant in Colombia, the lease period began on May 1, 2023 and the lease term is two years.
The change of other income in 2023 compared to 2022 was primarily attributable to the decrease in litigation compensation of approximately $1.3 million paid to Sevic Systems SE over IP dispute and an increase of approximately $0.3 million in liquidation income from Shengzhou Cenntro Machinery Co., Ltd. and Zhejiang Xbean Tech Co. Ltd. during the year 2023.
The change of other income (expense) in 2024 compared to 2023 was primarily attributable to i) the increase in investment loss of approximately $0.7 million and the decrease of approximately $0.4 million in liquidation income from Shengzhou Cenntro Machinery Co., Ltd. and Zhejiang Xbean Tech Co. Ltd. during the year 2023.
The Company does not use derivatives for trading purposes and is not a party to leveraged derivative contracts. 70 Table of Contents Depending on the nature of the underlying risk being hedged, these cross-currency swap are accounted for either as cash flow, net investment or mark to market hedges against changes in the value of the hedged item.
Depending on the nature of the underlying risk being hedged, these cross-currency swap are accounted for either as cash flow, net investment or mark to market hedges against changes in the value of the hedged item. Derivatives are recorded in the Consolidated Balance Sheets at fair value.
The convertible promissory notes payable accounted for under the fair value option election are each a debt host financial instrument containing embedded features that would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and subsequent periodic estimated fair value measurements in accordance with GAAP.
The Company has elected to apply the fair value option to: i) convertible promissory notes payable due to the complexity of the various conversion and settlement options available to notes holders; ii) convertible loan receivable, which was recognized as debt security in long-term investments, and iii) cross-currency swap, which was recognized as short-term investments. 68 Table of Contents The convertible promissory notes payable accounted for under the fair value option election are each a debt host financial instrument containing embedded features that would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and subsequent periodic estimated fair value measurements in accordance with GAAP.
The change was primarily attributable to (i) a decrease in interest expense to convertible bonds of approximately $1.1 million; (ii) the increase in interest income of approximately $0.7 million from short-term money market investment; (iii) offset by a decrease in interest income of approximately $0.6 million from bank deposit.
The decrease was primarily attributable to (i) a decrease in interest income of approximately $0.5 million from bank deposit.; (ii) a decrease in interest income of approximately $0.3 million from wealth management products purchased from banks; (iii) offset by a decrease in interest expense to convertible bonds of approximately $0.3 million.

… 134 more changes not shown on this page.

Other CENN 10-K year-over-year comparisons