Microvast Holdings (MVST) risk factors, FY2025 10-K

Risks Related to Being a Public Company

1. 01The restatement of our previously issued quarterly financial statements has subjected us to additional costs, risks and uncertainty and may also affect investor confidence and harm our reputation
2. 02Effective December 31, 2025, we no longer qualify as a “smaller reporting company” and commencing with our Quarterly Report on Form 10-Q for the fiscal quarter ending March 31, 2026, we may no longer take advantage of reduced disclosure and reporting requirements applicable to smaller reporting companiesNew

Risks Related to Our Business and Industry

1. 03In prior periods, we disclosed that substantial doubt as to our ability to continue as a going concern existed due to liquidity constraint and recurring operating losses100% rewritten
2. 04For the years ended December 31, 2025, 2024, and 2023, the Company incurred net losses of $29.2 million, $195.5 million, and $106.4 million, and generated cash flows from operating activities of $75.9 million, $2.8 million, and used cash flow in operating activities of $75.3 million, respectivelyNew
3. 05We may be unable to meet our current capital requirements and will require additional capital to meet our outstanding accounts payable and current liabilities43% rewritten
4. 06We may be unable to meet our future capital requirements and we may require additional capital to support business growth, and this capital might not be available on acceptable terms, or at all
5. 07With a limited operating history and ongoing losses, achieving or sustaining profitability remains uncertain30% rewritten
6. 08Our business and our ability to complete the Clarksville expansion could be adversely affected by mechanics liens filed by contractors that we do not have sufficient funds to pay25% rewritten
7. 09Our future growth depends upon the willingness of commercial-vehicle and specialty-vehicle operators and consumers to adopt EVs, and the availability of alternative technology
8. 10We may not be able to substantially increase our manufacturing output in order to fulfill orders from our customers
9. 11Some battery components pose safety risks, potentially causing accidents that could lead to liability, manufacturing delays and negatively impact market acceptance55% rewritten
10. 12Our revenue heavily depends on a limited customer base, a trend likely to continue22% rewritten
11. 13The unavailability, reduction or elimination of, or uncertainty regarding, government and economic incentives or subsidies available to end-users and OEMs in the U.S., China, Europe and other jurisdictions could have a material adverse effect on our business, financial condition, operating results and prospects
12. 14The demand for batteries in transportation and other markets depends on the attractiveness of fossil fuel alternatives. Extended periods of low oil prices could adversely affect demand for electric and hybrid electric vehicles24% rewritten
13. 15We may not be able to maintain our competitive position if we face intense competition from other battery manufacturers, many of which have significantly greater resources
14. 16Failing to anticipate customer preferences and develop appealing products could prevent us from maintaining or growing our revenue and profitability
15. 17Our future depends on the needs and success of our customers, as well as the demand for our customers’ products or services
16. 18We may be subject to declinin g average selling prices, which may harm our revenue and gross profits
17. 19Our products might fail to qualify as “domestic origin” for purposes of “Buy America” requirements imposed on the recipients of U.S. government grants
18. 20We may experience significant delays in the design, production and launch of our new products, which could harm our business, prospects, financial condition and operating results
19. 21Our failure to cost-effectively manufacture our batteries in quantities which satisfy our customers’ demand and product specifications and their expectations for product quality and reliable delivery could damage our customer relationships and result in significant lost business opportunities for us22% rewritten
20. 22Our working capital requirements involve estimates based on the demand expectations and may decrease or increase beyond those currently anticipated, which could adversely impact our operating results and financial condition
21. 23Inaccurate manufacturing planning may lead to surplus inventory or shortages
22. 24We rely on complex machinery for our operations and our production involves a degree of risk and uncertainty in terms of operational performance and costs
23. 25We rely on third parties to manufacture chargers and charging poles and to build charging stations that are necessary for using our products, and our ability to market our products depends on the establishment of charging station networks that meet the needs of our products
24. 26We currently purchase certain key raw materials and components from third parties, some of which we only source from one supplier or from a limited number of suppliers primarily located in Asia23% rewritten
25. 27If rising prices or availability of raw materials continues to persist, our business and results of operations may be adversely affected86% rewritten
26. 28significantly affect the availability and cost of raw materials, and may therefore have a material adverse effect on our business, results of operations, and financial conditionNew
27. 29If we are unable to integrate our products into vehicles manufactured by our OEM customers, our results of operations could be impaired
28. 30Under certain circumstances, our customers can modify or terminate their contracts
29. 31Losing our senior executives or key personnel could severely disrupt our business26% rewritten
30. 32The success of our business depends on our ability to attract, train and retain highly-skilled employees and key personnel
31. 33Our management has limited experience in operating a public company
32. 34We may acquire or invest in other companies or technologies, which could divert our management’s attention, result in dilution to our stockholders and otherwise disrupt our operations and adversely affect our business
33. 35Our planned expansion into new applications and new markets as we continue to expand our global presence poses additional risks which could adversely affect our business, financial condition and results of operations
34. 36These factors may cause our costs of doing business in certain markets to exceed our comparable costs incurred in other markets in which we do business. Any negative impact from our business efforts in new markets could adversely affect our business, operating results and financial condition as a whole
35. 37Our battery packs rely on software and hardware that are highly technical, and if these systems contain errors, bugs or vulnerabilities, or if we are unsuccessful in addressing or mitigating technical limitations in our systems, our business could be adversely affected
36. 38We may be subject to financial and reputational risks due to product recalls and product liability claims, and we could face substantial liabilities which exceed our resources73% rewritten
37. 39We typically offer warranties for our battery products against any defects due to product malfunction or workmanship for a period ranges from one to eight years from the date of purchase. We provide a reserve for these potential warranty expenses, which is based on an analysis of historical warranty issuesNew
38. 40If we have quality issues with our BMS and ESS container, our sales, profit, and cash flows could decrease and our relationships with our customers and our reputation may be harmed
39. 41The reduction, elimination, or expiration of government incentives for, or regulations mandating the use of, renewable energy could reduce demand for our ESS container and harm our business43% rewritten
40. 42If renewable energy technologies are not suitable for widespread adoption or sufficient demand for our offerings does not develop or takes longer to develop than we anticipate, our sales may decline, and we may be unable to achieve or sustain profitability
41. 43Existing electric utility industry policies and regulations, and any subsequent changes, may present technical, regulatory, and economic barriers to the purchase and use of our ESS container that may significantly reduce demand for our products or harm our ability to compete81% rewritten
42. 44The U.S. Congress, the Trump Administration, or any new administration may make substantial changes to fiscal, tax, and other federal policies that may adversely affect our business
43. 45Restrictions on the ability of U.S. companies to invest in the PRC may impact our businessNew
44. 46As components of electric vehicles, our products as installed in the products of our customers are subject to motor vehicle standards and the failure of the vehicles to satisfy such mandated safety standards could have a material adverse effect on the demand for our products, our business and our operating results
45. 47Moreover, we may incur our own significant costs in complying with these regulations. Regulations related to the electric vehicle industry and alternative energy are currently evolving and we face risks associated with changes to these regulations
46. 48We may fail to comply with certain health and production safety laws and regulations governing hazardous materials
47. 49Environmental regulation compliance is costly; non-compliance could lead to fines, damage our reputation, and negatively impact our business86% rewritten
48. 50Our operations expose us to litigation, environmental and other legal compliance risks, including increased climate change legislation restricting GHG emissions40% rewritten
49. 51structures our investments and could limit our ability to enforce our rights. See the section titled “ Business — Legal Proceedings .”New
50. 52Our general liability insurance may not be sufficient to cover potential liability from product liability claims
51. 53Our insurance coverage strategy may not be adequate to protect us from all business risksNew
52. 54If currency exchange rates fluctuate substantially in the future, our financial results, which are reported in U.S. dollars, and the value of our securities could be adversely affected46% rewritten
53. 55Our debt covenants agreements contain covenant restrictions that may limit our ability to operate our businessNew
54. 56Additional funds may not be available to use for when we need or want themNew
55. 57We may be negatively impacted by an early obsolescence of our manufacturing and other equipmentNew
56. 58U.S. tax law changes on international activities could significantly affect our finances and operational results
57. 59We may face unforeseen tax liabilities that could affect our financial health
58. 60International operations could lead to complex and unfavorable tax outcomes63% rewritten
59. 61Our batteries and our website, systems, and data we maintain may be subject to intentional disruption, other security incidents, or alleged violations of laws, regulations, or other obligations relating to data handling that could result in liability and adversely impact our reputation and future sales
60. 62We are legally obligated to take back used batteries from clients and the cost of doing so may differ materially from our estimates
61. 63We may have difficulties transferring and communicating technology globally, especially if communications and visa processes between the U.S. and other countries worsen
62. 64Our $200 million grant from the DOE was withdrawn and there is no certainty that the Company will qualify or have access to future awards or grants in the United States
63. 65Our financial results may vary significantly from period to period due to fluctuations in our operating costs and other factorsNew
64. 66We may fail to meet our publicly announced guidance or other expectations about our business, which could cause our stock price to declineNew
65. 67Artificial Intelligence presents risks and challenges that can impact our business, including by posing security risks to our confidential information, proprietary information and personal data
66. 68Our business may be adversely affected by any disruptions caused by union activitiesNew
67. 69Any failure by us to comply with a variety of U.S. and international privacy and consumer protection laws may harm usNew

Risks Related to Doing Business in China

1. 70Adverse changes in the PRC’s political, economic, and other policies could materially affect China’s economic growth and negatively impact our business growth and competitiveness, as well as adverse trade relations with the United States
2. 71PRC government regulations significantly impact our Chinese operations, with changes potentially increasing costs or limiting activities. We could become subject to regulations issued by the CAC and the requirements of the PRC government’s cyber or data security laws, which could impact our activities in China89% rewritten
3. 72Any future revocation of approvals or any future failure to obtain approvals applicable to our business or any adverse changes in foreign investment policies of the PRC government may have a material adverse impact on our business, financial condition and results of operations
4. 73If labor costs in the PRC increase substantially, our PRC subsidiaries' business and our costs of operations may be adversely affected
5. 74The PRC government may exert substantial influence over the manner in which we conduct our business operations in China
6. 75China's legal and judicial system may not adequately protect our business and operations and the rights of our investors
7. 76Restrictions under PRC law on our China subsidiaries’ ability to make dividends and other distributions could materially and adversely affect our ability to grow, make investments or acquisitions that could benefit our business, pay dividends to you, and otherwise fund and conduct our business
8. 77Tariffs imposed on products of the PRC into the United States may lead to increased costs and impact our business

Risks Related to our Intellectual Property

1. 78Protecting our intellectual property rights, especially in China, may be challenging, and infringement claims could result in substantial costs44% rewritten
2. 79Our reliance on unpatented proprietary technologies is significant
3. 80Our success partly hinges on protecting our trade secrets, confidential information, technology, trademarks, and other intellectual property rights
4. 81Infringement claims against us could lead to substantial costs

Risks Related to Ownership of Common Stock

1. 82We may issue additional shares of common stock or other equity or convertible securities, which may depress the market price of our common stock and could make it difficult for another company to acquire us
2. 83Resales of our common stock may cause the market price of our securities to drop significantly, even if our business is doing well
3. 84Even though the warrants have become exercisable, there is no guarantee that the warrants will be in the money prior to their expiration, and they may expire worthless21% rewritten
4. 85The Tuscan Group is likely to make a substantial profit even if the trading price of our common stock materially declines due to the nominal purchase price the Tuscan Group paid for the Founder Shares (as defined below)75% rewritten
5. 86Our Charter and Bylaws contain certain provisions that limit the ability of stockholders to take certain actions and could delay, discourage or prevent takeover attempts that stockholders may consider favorable
6. 87These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in the Board or management
7. 88The price of our common stock may be volatile or may decline regardless of our operating performance
8. 89These broad market and industry factors may materially reduce the market price of common stock, regardless of our operating performance. In addition, price volatility may be greater if the public float and trading volume of common stock is low
9. 90We do not intend to pay dividends on common stock for the foreseeable future
10. 91If securities analysts do not publish research or reports about us, or if they issue unfavorable commentary about us or industry or downgrade the common stock, the price of the common stock could decline
11. 92We may be exposed to liabilities under the FCPA, U.K. Bribery Act, Chinese and other anti-corruption laws, and any determination that we violated these laws could have a material adverse effect on our business
12. 93We face risks related to health epidemics, including any ongoing public health crises, which has disrupted our business and could have a material adverse effect on our business and results of operations
13. 94Our facilities or operations could be damaged or adversely affected as a result of natural disasters and other catastrophic events
14. 95Our lengthy and variable sales cycle makes it difficult for us to accurately forecast our revenue and other operating results. As a result, we expect our results of the operation to fluctuate on a quarterly and annual basis, which could cause our stock price to fluctuate or decline