KNDI

Greetings. Welcome to Kandi Technologies full year 2025 financial results call at this time all participants only listening mode as anyone require operator assistant during the conference please press star zero on your telephone keypad please note that this conference is being recorded. I will now turn the conference over to Kewa Luo, IR Director. Thank you. You may begin.

Thank you. Hello, everyone, and welcome to Kandi Technologies Group full year 2025 earnings conference call. As a reminder, today's call is being recorded. The current financial and operational highlights were issued in a press release earlier today and available online. You can access the earnings press release and subscribe to the company's email alerts by visiting the investor relations section of our website at ir.kandigroup.com. Joining us today are Mr. Feng Chen, Chief Executive Officer, and Mr. Alan Lim, Chief Financial Officer. Before we begin, please note that today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today.

Further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC. The company does not assume any obligations to update any forward-looking statements, except as required under applicable laws. Unless otherwise noted, all financial figures discussed today are in US dollars. I will now turn the call over to our CEO, Mr. Feng Chen, who will deliver his remarks in Chinese, followed immediately by English translation. Mr. Chen, please go ahead.

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Good day, investors and analysts. Welcome to Kandi Technologies earnings conference call for the full year 2025. Thank you for your continued interest in and support of us.

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2025 was a pivotal year for Kandi. The past two years have been defined by a challenging macro backdrop marked by evolving geopolitics, shifting trade policies and uneven demand across our end markets, which weighed on our operating performance. We are clear-eyed about near-term revenue dynamics. At the same time, we are encouraged by what our team delivered beneath the surface. Meaningful improvements in operating quality, a stronger cash flow profile, and a materially healthier balance sheet.

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In 2025, our gross margin improved to 42.6%, up from 30.8% in 2024. We generated $96.8 million in net cash from operating activities and ended with $211.9 million in cash on hand. These results reflect our commitment to high-quality earnings, more sustainable cash flows, and stronger returns on invested capital.

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Over the past 18 months, one of my key priorities as CEO together with the management team, has been to review and reassess Kandi's business boundaries, growth trajectory, and long-term overall direction. Amid the opportunities presented by technological innovation and industrial upgrading, we are placing even greater emphasis on focused execution, disciplined capital allocation, and the consistent delivery of major milestones.

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Beginning in 2026, Kandi is entering new phase of growth. Our strategy will be anchored around two core engines.

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Our first engine is the off-road electric vehicle business, centered on the North American market and spanning UTVs, golf carts, electric off-road products, and others. This business represents Kandi's core franchise, underpinning stable cash flows, and a well-established go-to-market distribution network. In the first quarter this year, the overall core business remained stable with continued progress in distribution channel expansion. Our dealer network continued to scale with a notable improvement in per-dealer sales performance, further broadening our market coverage and the brand presence in key markets and laying a solid foundation for full-year growth. In addition, as we enter 2026, we are actively advancing our North American UTV business across four dimensions. Next-generation model development, enhanced product experience, improved channel efficiency, and strengthened supply chain capabilities.

We have set internal sales targets meaningfully above historical levels and have engaged a external automotive design team with proven mass production experience to help design our next-generation UTV products. Our ambition goes beyond simply selling more units. We are focused on boosting Kandi's product competitiveness across the North American outdoor recreation and low-carbon mobility markets.

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In December 2025, we signed a agreement to acquire Rawrr, a premium U.S.-based electric off-road vehicle motorcycle brand. With Rawrr now part of the Kandi family, our goal is to establish premier electric off-road motorcycles as a meaningful new growth category within our North American product portfolio by 2026. We see strong synergies between Rawrr and Kandi's existing North American distribution network, supply chain, and product lineup. As we advance the integration, our primary priorities will be brand alignment, channel coordination, supply chain optimization, and product development, aiming to ensure this acquisition translates into meaningful, measurable revenue contribution rather than a transaction on paper.

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Our second engine comprises emerging battery swapping equipment and intelligent robotics business.

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Battery swapping equipment represents our most important breakthrough opportunity in 2026. In August 2025, our subsidiary China Battery Exchange was qualified as a battery swap equipment supplier within CATL's supply chain, securing its first order for heavy truck battery swap stations equipment. In January 2026, China Battery Exchange entered into a three-year strategic cooperation agreement with CATL's subsidiary, covering the mass production and delivery of heavy truck battery swap station equipment. Based on our current order visibility and production schedule, we are confident in achieving meaningful revenue growth in 2026.

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In our view, the battery swap equipment business represents more than an incremental revenue stream for Kandi. It demonstrates a remarkable extension of our footprint from low-carbon mobility products into the broader new energy infrastructure sector. Looking ahead, our priorities are centered on execution on heavy truck battery swap station order deliveries, ramping up our mass delivery capacity and capturing emerging commercial opportunities across ports, mining operations and long haul freight applications.

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On the intelligence robotics business front, our focus is on the deployment of autonomous quadruped robots in security, patrol and logistics parking environments. We have entered a strategic partnership agreement with HawkRobo Systems LLC to form a joint venture, KH Robotics, through which we are developing localized testing, validation and commercial operations capabilities in North America. We expect to complete the first functional demo by approximately June 2026, followed by field testing and initial pilot deployments in the second half of the year. This business remains at an early stage of deployment. Rather than providing near-term revenue guidance, we will evaluate and communicate progress through clearly defined product milestones and real-world use case validation.

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Regarding supply chain capabilities, we will continue to build out our global footprint anchored by core R&D and manufacturing in Mainland China with flexible capacity in Taiwan and local assembly and front-end distribution network in the United States. The architecture provides meaningful structural insulation against geopolitical uncertainty and trade volatility, while also enabling us to respond more quickly and effectively to evolving demands in the North American market.

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In sum, looking ahead to 2026, we are focused on four clear priorities. First, restoring sales momentum and advancing product upgrades across our UTV and low-carbon mobility lineup in North America. Second, successfully integrating Rawrr and translating the acquisition into tangible revenue contribution. Third, advancing the battery swap equipment business from initial order delivery to large-scale deliveries. Fourth, advancing our intelligent robotics business through the completion of functional demo, followed by field testing and initial pilot deployments.

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At the same time, we will maintain a disciplined approach to capital allocation. Our cash positions are not a justification for indiscriminate expansion, but rather a means to preserve flexibility in an uncertain environment. Any future investments in new business initiatives, acquisitions, or capacity expansion must be guided by long-term shareholder returns, and will be rigorously evaluated against clear benchmarks, including commercial progress, cash payback cycles, and risk-adjusted returns.

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Today, Kandi has a clear platform structure, a focused dual engine strategy, a resilient global supply chain, and a solid cash position. I firmly believe that with this core competencies and strategic positioning in place, we are well equipped to translate our vision of manufacturing joy, driving the future into tangible long-term value for shareholders.

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Let me turn the call over to our CFO, Alan Lim, who will provide details on our full year 2025 financial performance. Thank you.

Thank you, Mr. Chen and Kewa. Thank you everyone for joining us today. I will go over our financial results for 2025. The net revenues were $87.4 million, a decrease of 31.5% from $127.6 million for 2024, primarily due to reduced demand for EV products in the PRC market and fewer sales of crossover golf carts and other vehicle models. Ongoing trade uncertainties, including the potential tariffs and trade restrictions, together with persistent inflation and elevated interest rates, adversely affected consumer demand for higher priced recreational vehicles, which in turn impacted sales to Kandi's major retail customers and distributors. The cost of goods sold was $50.1 million, a decrease of 43.2% from $88.3 million for 2024. The decrease was primarily due to the corresponding decrease in sales.

The gross profit was $37.3 million, compared with $39.3 million for 2024. Gross margin was 42.6%, up from 30.8% for 2024. The improvement in gross margin was primarily driven by increased sales of the previously impaired inventory. The total operating expenses were $91.5 million, a decrease of 12.6% from $108.1 million for 2024. The factors including the research and development expenses were $7.6 million, up 52.6% from $5.0 million for 2024, mainly due to the completion of research and development projects during the current period. Secondly, the selling and marketing expenses were $16.7 million, a decrease of 21.5% from $21.2 million for 2024.

The decrease was mainly due to the decreases in freight expenses and commission expenses in line with the decrease in revenue. The general and administrative expenses were for $54.4 million, a decrease of 5.7% from $57.7 million for 2024. The decrease was mainly due to the decreased depreciation and amortization in the current period, following the material impairment of long-term assets provision in 2024. The loss from operations was $57.2 million, compared with $68.8 million for 2024. The net loss for the current year was $95.6 million, compared with $51.0 million for 2024. The decrease in net loss was primarily attributed to the higher ad expenses resulting from the anti-dumping duty expenses and increased litigation costs compared to the prior year.

The basic and diluted net loss attributable to the company's shareholders to share was $1.12, compared with basic and diluted net loss per share of $0.59 for 2024. Turning to our balance sheets. Our financial position remains healthy and stable. As of December 31st, 2025, the company had cash and cash equivalents, the receiver cash and certificates of deposit totaling $211.9 million, compared with $126.3 million as of December 31st, 2024. That concludes my remarks. I will now hand the call back to Kewa for any final comments. Thank you.

Thank you once again for joining us today. If you have any further questions, please reach out using the contact information provided on our website. We appreciate your time and interest in Kandi Technologies. This concludes today's conference call. You may now disconnect.

Hello, ladies and gentlemen. Thank you for standing by for Kandi Technologies Inc. Earnings Conference Call for the first half of 2025. [Operator Instructions]. Today's conference is being recorded. I will now turn the call over to your host, Ms. Kewa Luo, the IR Director of the company. Please go ahead.

Hello, everyone, and welcome to Kandi Technologies Earnings Conference Call for the first half of 2025. As a reminder, today's call is being recorded. The company's financial and operational highlights were issued in our press release earlier today and are available online. You can access the earnings press release and subscribe to the company's e-mail alerts by visiting the Investor Relations section of our website at ir.kandigroup.com. Joining us today are Mr. Feng Chen, Chief Executive Officer; and Mr. Alan Lim, Chief Financial Officer. Before we begin, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today. Further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC. The company does not assume any obligation to update any forward-looking statements except as required under applicable laws. Unless otherwise noted, all financial figures discussed today are in U.S. dollars. I will now turn the call over to our CEO, Mr. Feng Chen, who will deliver his remarks in Chinese, followed immediately by our English translation. Mr. Chen, please go ahead.

[Interpreted] Good day investors and analysts. Welcome to Kandi Technologies Earnings Conference Call for the first half of 2025. We sincerely appreciate your taking the time to join us as we review the company's first half performance. In the first half of 2025, the global macroeconomic landscape remains clouded by considerable uncertainty, creating real headwinds for our business. Nevertheless, thanks to our agility and strategic foresight we made substantial progress on several key initiatives while enhancing our traditional off-road vehicle operations, we also leveraged our core strengths to expand into the emerging fields of embodied intelligence and new energy infrastructure. Through the confirmation of several pivotal partnerships, we steadily advanced our transformation from a conventional manufacturing enterprise into a holding platform with intelligent equipment manufacturing at its core. This transformation initiatives not only speaks to our resilience in a challenging environment but also reaffirms our confidence in delivering sustainable growth over the long term. I will begin with an update on the latest developments in our core business. Following the adjustments and upgrades made in the first half of the year, we have entered a new phase of refined operations with the goal of delivering steady high-quality growth. Through more efficient resource allocation, inventory optimization and disciplined cost control, we are gradually improving our profitability and strengthening our cash flow management. Let's look more closely at these business operations from 3 key aspects. In product sales, our focus on inventory management within retail channels drove a notable improvement in gross margin to 45.2% for the first half of 2025, up 13.5 percentage points from 31.7% in the same period of 2024. This reflects the effectiveness of our refined operations and cost control initiatives. Meanwhile, by optimizing our internal production structure and streamlining assembly line processes, we have enhanced manufacturing efficiency and shortened delivery cycles, further strengthening product delivery reliability. Second, on the sales channel front, we are creating a more balanced and strategic distribution layout to enhance both our market penetration and service capabilities. To that end, we have reinforced key partnerships with major retailers, including Lowe's, while further expanding our dealer network. Our products are now carried in 1,050 retail outlets with our dealer network demonstrating steady growth. Thanks to the concerted efforts of our new sales team, the dealer to retail sales mix has improved from 129 previously to 228 as of the end of June, reflecting a more diversified and resilient channel structure. Beyond our traditional sales channels, we are actively exploring high-margin direct-to-consumer channels, e-commerce platforms and major distributor networks while evaluating and optimizing the long-term profitability of our key account partnerships, we aim to achieve an optimal balance among brand visibility, market share and profitability. Finally, we have proactively accelerated the design and development of several new products, the design schematics are finalized, and we anticipate launching these products by the middle of next year. Their introduction will provide new growth momentum, broaden our product portfolio and further enhance our market competitiveness. Moving on to our emerging business segments, supported by keen market insights, we maintain an innovation-driven approach to these segments. With particular emphasis on intelligent equipment and new energy infrastructure, let me walk you through our latest initiatives in those 2 fields. In the first half of this year, we embarked on a deep collaboration with Deep robotics, a leading Chinese innovator in embodied intelligence to jointly develop intelligent golf equipment and quadruped robots for security inspections, leveraging our independently developed cloud edge terminal intelligence computing system. These emerging small devices are designed to precisely meet diverse market needs unlocking substantial growth potential for our intelligent equipment business. In the new energy infrastructure sector, battery swapping technology remains a key strategic cornerstone for us. Kandi has been advancing the adoption and application of this technology for over a decade, establishing ourselves as the industry a pioneer. Through our subsidiary, China Battery Exchange, Zheijang, Technology Co., Ltd., we have become a supplier of heavy truck battery swapping station equipment to CATL, the global leader in power batteries and have successfully secured our first order to support the rollout of its ambitious 10,000 stations plan. This collaboration not only strengthens our technological leadership, but also positions us to generate substantial revenue. Before I conclude, a brief look at our financial position. As of June 30, 2025, the company held $257 million in cash, cash equivalents, restricted cash and certificates of deposit. Our balance sheet remains exceptionally strong, providing ample liquidity to support both our strategic growth initiatives and ongoing business expansions. In summary, Kandi demonstrated resilience and a strong capacity for sustained growth amidst external challenges and internal transformation during the first half of 2025. Despite some short-term volatility, we believe our disciplined focus on optimized operations, strategic e-collaboration and technological innovation has positioned the company for long-term development. Looking ahead, we are confident in our dual engine strategy, balancing stable cash flow businesses with growth incubation businesses. Through disciplined execution and continuous innovation, we will strengthen our position in off-road vehicle sector, while strategically expanding into intelligent equipment and new energy markets maintaining our competitive edge and creating long-term value for our shareholders and investors. Now let me turn the call over to our CFO, Alan Lim, who will provide details on our financial performance. Thank you.

Thank you, Mr. Chen and Kewa. Thank you, and thank you, everyone, for joining us today. I will go over our unaudited financial results for the first half of 2025. The net revenues were $36.3 million, down 39.3% from $59.8 million for the same period of 2024. Primarily reflecting the lower sales of off-road vehicles and EV products. The cost of goods sold was $19.9 million, a decrease of 51.3% from $40.9 million for the same period of 2024. The decrease was primarily due to the corresponding decrease in sales. The gross profit was $16.4 million compared with $19.0 million for the same period of 2024. The gross margin improved significantly to 45.2% up from 31.7% last year, driven by more favorable product mix and regional revenue distribution as well as increased sales of previously impaired inventory. The total operating expenses were $18.3 million, a decrease of 21.4% from $23.3 million for the same period of 2024. Regarding the breakdown for expenses, Research and development expenses were $2.5 million, up 48.5% from $1.7 million for the same period of 2024, mainly due to a battery product R&D project launched in the first half of 2025. The selling and marketing expenses were $4.5 million, down 35.8% from $7.0 million for the same period of 2024. The decrease was comparable with the scale of decrease in revenue. The general and administrative expenses were $11.3 million, down 22.6% from $14.6 million for the same period of 2025. The decrease was mainly due to a lower depreciation resulting from the long-lived asset impairment recorded at the end of 2024 and reduced stock-based compensation expenses compared with the prior year period. The net income was $1.7 million compared with $2.4 million for the same period of 2024. The basic and diluted net income attributable to the company's stockholders per share were $0.02 compared with $0.03 for the same period of 2024. Turning to our balance sheet. Our financial position remains strong. As of June 30, 2025, the company had cash and cash equivalents, the restricted cash and certificates of deposits totaling $256.7 million, compared with $126.3 million as of December 31, 2024. That concludes our remarks. I will now hand the call back to Kewa for any final comments. Thank you.

Thank you once again for joining us today. If you have any further questions, please reach out using the contact information provided on our website. We appreciate your time and interest in Kandi Technologies. This concludes today's conference call. You may now disconnect.

Thank you. This concludes today's call. Have a wonderful afternoon. You may now disconnect your lines. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

Greetings, and welcome to the Kandi Technologies Full Year 2024 Financial Results Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. I will now turn the conference over to your host, Ms. Kewa Luo, Investor Relations Manager. Thank you, you may begin.

Thank you, operator. Hello, everyone. Thank you all for joining us on today's conference call to discuss Kandi's results for the full year 2024. Earlier today, we issued a press release covering the results. You can find the press release on the company's website as well as from Newswire services. Please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today. Further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Additionally, unless otherwise stated, all figures mentioned during the conference call are in US dollars. Before we continue, I would like to introduce the team joining me on today's call. Joining us are Mr. Feng Chen, CEO, and Ms. Alan Lim, CFO. Mr. Chen will deliver his prepared remarks in Chinese, which I will translate afterwards. With that, let me now turn the call over to our CEO, Mr. Feng Chen. Go ahead, Mr. Chen.

[Foreign Language] Good day and thank you for joining us. Over the past year, we not only strengthened our leadership in the electric off-road sector, but also enhanced our manufacturing capabilities and expanded our market reach, laying a solid foundation for the strategic progress we achieved in 2024. I am proud of the resilience and innovation demonstrated across the organization from our broad strategic guidance to our team's daily execution and I appreciate the continued engagement of our investors. [Foreign Language] In 2024, we delivered modest yet meaningful revenue growth, driven by steady demand for our electric off-road vehicles and the ongoing optimization of our geographic footprint. While our revenue grew steadily, we continued to invest in the future, strengthening our overall product portfolio, advancing next-generation battery technology, and reinforcing our balance sheet. This disciplined approach enabled us to preserve profitability and maintain a robust cash position as we navigated evolving market dynamics. [Foreign Language] Our core electric off-road segment remains the engine of Kandi's business. Last year, we introduced several new models tailored to North American preferences including the innovator e10K utility vehicle, a new lineup of electric golf carts built for everyone from entry-level riders to seasoned off-road enthusiasts, as well as our limited-edition NFL golf carts. Meanwhile, Kandi made a strong presence at multiple golf cart expos and industry summits, earning widespread praise from dealers and attendees. [Foreign Language] Behind the scene, we are enhancing our operational resilience through targeted upgrades to our Taiwan manufacturing footprint. These improvements have increased our flexibility and responsiveness, enabling us to better align production with shifting customer demand while maintaining high standards of quality and efficiency. [Foreign Language] To ensure we deliver on our ambitious plans, we recently implemented a management incentive program that aligns leadership rewards directly with key performance metrics. This initiative is already motivating our senior team to push harder on sales growth, operational excellence, and new product development, ultimately driving improved results across the company. [Foreign Language] Looking ahead, our priorities are clear. We will bring forward innovative battery and vehicle solutions, expand our dealer network, deepen strategic partnerships, and execute our US localization roadmap, highlighted by our recent partnership with CBAK Energy to localize lithium cell and pack production in the United States. By allowing production closer to end market and leveraging clean energy incentives, we are positioning Kandi for sustainable long-term growth. [Foreign Language] In closing, I'm confident that the steps we have taken in 2024 have strengthened Kandi’s platform and prepared us to seize new opportunities. I want to thank our employees, partners, and shareholders for their trust and collaboration.

Thank you, Mr. Chen. And thank you everyone for joining today's conference call. As noted earlier, there will be no live Q&A session for today's call. If you have any questions following today's presentation, please email us at [email protected] or [email protected]. We will respond to all inquiries within the next five business days. Please note that our responses will be limited to the information that has been publicly disclosed and will comply with the applicable SEC regulations. This concludes our conference call. Thank you and have a good day.

Thank you, ladies and gentlemen. This concludes the conference call today. You may disconnect your lines. Thank you for your participation.