Cenntro Inc.

Cenntro Inc. operates as an emerging designer, manufacturer, distributor, and service provider of commercial vehicles powered by electricity or hydrogen energy sources, targeting fleet and municipal organizations for city services and last-mile delivery. The global electric vehicle (EV) market was valued at approximately $988.70 billion ⁴ in 2025 and is projected to reach approximately $2,529.10 billion ⁵ by 2034, growing at a compound annual growth rate of 11% ⁶. The global electric commercial vehicle (ECV) market is projected to reach revenues of $190.9 billion ⁷ in 2025, with an annual growth rate of 25.56% ⁸ from 2025 to 2033, reaching $1,298.26 billion ⁹ by 2033. The global hydrogen vehicle market is forecasted to grow at a CAGR of 31.94% ¹⁰ from 2025 to 2032, reaching approximately $19.92 billion ¹¹ by 2032. The company aims to become a leading provider in the ECV market by leveraging its technology, vehicle development, and distribution capabilities, with a mission to provide sustainable commercial vehicles and reduce carbon dioxide emissions.

The company's core business model revolves around the design, manufacturing, distribution, and servicing of commercial vehicles powered by electricity or hydrogen. Revenue is generated primarily through vehicle sales, spare-part sales, and other sales, which include outsourced ECV batteries and technical development/homologation assistance services to channel partners. The company has shifted its distribution strategy from relying mainly on third-party channel partners to a hybrid model combining Company-operated EV Centers with local distribution channels and dealer networks. In Europe, the company transitioned to a distribution partner-led model, while in North America, it uses a dealer-led network supported by Company-operated EV Centers.

Cenntro Inc. offers six series of commercial vehicle models: Metro®, Logistar™, iChassis™, Avantier™, Teemak™, Bison Motor™, and Antric One. The Metro® is a customizable ECV for city utility services and last-mile delivery, with the Metro MR specifically tailored for urban logistics and securing an order for 500 units ¹² in Japan in January 2025. The Logistar™ Series includes models like LS100, LS200, LS210, LS260, LS300, LS400, and LS450, designed for on-road applications with GVWR under 19,500 lbs. In 2025, 99 units ¹³ of the Logistar® 450P electric buses were delivered to QEV Technologies, S.L. in Europe, and 12 units ¹⁴ of the LS450 were delivered in the U.S. market. The LS450 has been confirmed as eligible for the NYTVIP program, with an estimated aggregate subsidy of approximately $6.7 million ¹⁵ for 55 submitted units ¹⁶. The LS210, an upgrade to the LS200, sold 120 units ¹⁷ in 2025, and 27 LS260s ¹⁸ were sold in the EU market during the same year. The company has decided to discontinue marketing and selling the LS100 product line. The Teemak™ Series consists of off-road vehicle models, with an enhanced Teemak™ Series anticipated for launch in Q4 2026. The Avantier™ Series includes micro ECV models like Avantier c, Avantier α, Avantier Ex, and Avantier Commuter, with 66 units ¹⁹ of the Avantier Commuter sold and delivered as of the related announcement. The Antric One is a cargo bike for last-mile city logistics, with production of an advanced version commencing in February 2024. The Cenntro iChassis™ is an open-platform, programmable chassis for autonomous driving applications, with 176 units ²⁰ sold in 2025. The second-generation hydrogen fuel cell Class 8 semi-tractor, the BM860H, developed by Bison Motors Inc., completed assembly and testing in December 2025, powered by a 210kW hydrogen fuel cell system ²¹ and providing an estimated driving range of up to 528 miles ²².

For the fiscal year ended December 31, 2025, Cenntro Inc. reported net revenues of approximately $18,080,161 ²³, a decrease of approximately $13,217,232 ²⁴ or 42.2% ²⁵ from $31,297,393 ²⁶ in 2024. Cost of goods sold was approximately $20,396,258 ²⁷, a decrease of approximately $3,292,588 ²⁸ or 13.9% ²⁹ from $23,688,846 ³⁰ in 2024. This resulted in a gross loss of approximately $2,316,097 ³¹ in 2025, compared to a gross profit of $7,608,547 ³² in 2024. The overall gross margin decreased to approximately negative 12.8% ³³ in 2025 from positive 24.3% ³⁴ in 2024, with vehicle sales gross margin at negative 3.22% ³⁵ in 2025 compared to positive 24.9% ³⁶ in 2024. Operating expenses totaled approximately $30,232,669 ³⁷ in 2025, down from $39,449,817 ³⁸ in 2024. Loss from operations was approximately $32,548,766 ³⁹ in 2025, compared to $31,841,270 ⁴⁰ in 2024. Net loss from continuing operations before tax was approximately $68,939,133 ⁴¹ in 2025, compared to $34,148,449 ⁴² in 2024. The net loss attributable to the Company's shareholders was approximately $72,981,773 ⁴³ in 2025, compared to $44,866,813 ⁴⁴ in 2024. As of December 31, 2025, cash and cash equivalents were approximately $4.5 million ⁴⁵, and working capital was approximately $19.0 million ⁴⁶. Total restrictions on the distribution of PRC subsidiaries' net assets were approximately $28.5 million ⁴⁷, or 72% ⁴⁸ of the Company's total consolidated net assets.

The decrease in net revenues in 2025 was primarily due to a $12.1 million ⁴⁹ decrease in vehicle sales, driven by a decline in the average selling price from approximately $25,089 ⁵⁰ to $12,266 ⁵¹, mainly due to the suspension of government subsidies impacting LS400 sales. Spare-part sales also decreased by approximately $1.1 million ⁵². Geographically, net revenues from Europe increased by approximately $6.5 million ⁵³ to $12.2 million ⁵⁴ in 2025 from $5.7 million ⁵⁵ in 2024, representing 67.2% ⁵⁶ of total revenues in 2025, up from 18.3% ⁵⁷ in 2024. Conversely, North American revenues decreased significantly from $20,888,931 ⁵⁸ in 2024 to $1,852,544 ⁵⁹ in 2025, accounting for 10.2% ⁶⁰ of total revenues in 2025, down from 66.7% ⁶¹ in 2024. Asia's net revenues saw a slight decrease of approximately $0.6 million ⁶² to $4.0 million ⁶³ in 2025 from $4.6 million ⁶⁴ in 2024. The gross loss in 2025 was impacted by approximately $2.0 million ⁶⁵ of inventory write-offs related to battery equipment. Selling and marketing expenses decreased by approximately $4.9 million ⁶⁶ or 65.8% ⁶⁷ to $2.5 million ⁶⁸ in 2025, and general and administrative expenses decreased by approximately $6.0 million ⁶⁹ or 22.7% ⁷⁰ to $20.3 million ⁷¹. Research and development expenses decreased by approximately $2.3 million ⁷² or 45.5% ⁷³ to $2.8 million ⁷⁴.

During 2025, Cenntro Inc. introduced three new vehicle models: Avantier Ex, Avantier CX, and the BM860H. The Avantier Ex and Avantier CX target European and other non-U.S. markets, while the BM860H is primarily for the U.S. market. The company secured an order for 500 customized Metro MR vehicles ⁷⁵ for delivery in Japan in January 2025. It successfully delivered 99 units ⁷⁶ of Logistar® 450P electric buses to QEV Technologies, S.L. in Europe and 12 units ⁷⁷ of the LS450 in the U.S. market. The LS450 was confirmed as eligible for the NYTVIP program, with 55 units ⁷⁸ submitted for approval, representing an estimated aggregate subsidy of approximately $6.7 million ⁷⁹. The company also recommenced active research and development of an enhanced Teemak™ Series during 2025, with an anticipated launch in Q4 2026. In terms of manufacturing, the company terminated operations at assembly facilities in Jacksonville, Florida, and Herne, Germany, in 2024, and is considering relocating battery manufacturing operations from Monterrey, Mexico, to the United States. New lease agreements were entered into for facilities in Jiangsu, China, with a total area of approximately 5,398,050 square feet ⁸⁰, in Bochum, Germany, with approximately 4,392 square feet ⁸¹, and in Barstow, California, with approximately 100,860 square feet ⁸², and in Barcelona, Spain, with approximately 2,906 square feet ⁸³. The company disposed of all its remaining equity interests in Cenntro Electric CICS, S.R.L. on April 24, 2025.

Cenntro Inc. expects its level of capital expenditures to be relatively lower in 2025, with a focus on internally generated cash flow rather than relying on future external capital financing. The company does not plan to invest in any new production facilities in the near future unless necessary and intends to improve the efficiency of its existing EV Center networks. For the next twelve months, the business strategy includes the continued rollout of new ECV models in North America and Europe and the establishment and development of local distribution channels in the United States.

The company is advancing several product development programs to broaden its commercial and specialty vehicle offerings. These include the Teemak™ M2, an upgraded off-road utility vehicle series targeting the North American market, anticipated for launch in the fourth quarter of 2026. Additionally, a purpose-built electric shuttle bus derived from the LS450 platform, featuring an elevated roofline and enhanced interior, is under development. Electric-powered platform vehicles for yard logistics, facility transport, sightseeing, and passenger conveyance are also under further development. Beyond current vehicles, the company maintains a pipeline of next-generation energy and power technology products, including methanol-based hydrogen generation systems for on-site hydrogen supply and remote charging, and has successfully developed and validated solid-state battery manufacturing capabilities. The company intends to leverage these technology reserves to expand its product portfolio and addressable market opportunities as commercial and regulatory conditions support the transition to cleaner energy solutions.

Cenntro Inc. plans to regionalize manufacturing and supply chains for key ECV components, such as vehicle upfitting and battery packs, in the geographic markets where its ECVs are sold. The long-term strategy involves establishing supply chain relationships in North America and the European Union to support manufacturing and assembly needs, aiming to reduce transit times and import duties from China. This shift to a "merge in transit" model, consolidating component shipments at local assembly facilities, is expected to reduce overall ECV assembly costs in certain geographical markets. The company also intends to bring the production of select core vehicle models in-house to gain greater control over product definition, supply chain, quality standards, and long-term technology development.

The company plans to increase its research and development expenditure over the long term, building on technologies in vehicle development, driving control, cloud-based platforms, and sustainable energy innovations. Since inception through December 31, 2025, approximately $96.7 million ⁸⁴ has been spent on R&D activities.

The company expects to increase its market share in current ECV markets and penetrate new markets worldwide, such as Morocco, the Dominican Republic, and Turkey. This expansion will leverage existing channel partners and form new partnerships, supported by increased brand recognition. The company is targeting new markets where local governments incentivize the shift from ICEs to EVs.

Cenntro Inc. faces substantial risks, including its limited operating history and challenges in an emerging industry, particularly in high-volume ECV manufacturing. The company has historically incurred losses, with approximately $59.0 million ⁸⁵ in operating losses in 2025, and may not achieve profitability due to significant investments in R&D, manufacturing, and supply chain operations. Delays in launching and ramping up production of new ECV models, such as the Avantier Ex, Avantier CX, and BM860H, could adversely affect the business. The shift from a channel partner-reliant distribution model to a hybrid model combining Company-operated EV Centers and dealer networks is uncertain, and if EV Centers are ineffective or fail to meet sales targets, operating results could be negatively impacted. The company's reliance on third-party suppliers, including single-source suppliers for components like the Metro® airbag module, exposes it to supply chain disruptions, price increases, and potential production delays. Changes in international trade policies, particularly between the U.S. and China, including the additional 20% tariff ⁸⁶ on Chinese imports announced on March 4, 2025, could impact supply chains and cost structures. The commercial viability of the Cenntro iChassis™ depends on the availability and integration of third-party autonomous driving hardware and software. The company has identified a material weakness in its internal control over financial reporting due to insufficient accounting personnel with U.S. GAAP knowledge. The business is highly dependent on government subsidies and economic incentives for ECVs, and any reduction or elimination of these could adversely affect competitiveness. The market for ECVs is new and rapidly evolving, and end-users' willingness to adopt ECVs is crucial for growth. Continued elevated inflation levels could increase costs and negatively impact demand. The use of lithium-ion battery cells carries the risk of fire or smoke, potentially leading to redesigns and negative public perception. Global operations expose the company to unfavorable regulatory, political, legal, economic, tax, and labor conditions, and difficulties in protecting intellectual property rights, particularly in China, could harm the business. Compliance with environmental regulations, including those in China and the EU regarding battery recycling and hazardous substances, can be expensive, and noncompliance may result in fines. Cybersecurity threats, including physical or electronic break-ins, viruses, and cyber-attacks, could disrupt operations and harm the company's reputation. The company's common stock may be delisted under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect its auditors for two consecutive years, or if Nasdaq's proposed $5 million ⁸⁷ minimum market value continued listing requirement is approved and the company fails to maintain it.

Management's message to shareholders emphasizes Cenntro Inc.'s position as an emerging designer, manufacturer, distributor, and service provider of commercial vehicles powered by sustainable energy sources, with a goal to become a leading provider in the electric commercial vehicle (ECV) market. The company is focused on leveraging its technology, vehicle development, and distribution capabilities to build eco-chains and reduce carbon dioxide. Management highlights the asset-light, distributed manufacturing business model and the shift to a hybrid distribution strategy combining Company-operated EV Centers with local distribution channels and dealer networks to improve operational efficiencies, product quality, brand value, market share, customer support, and service. Strategic priorities include the continued rollout of new ECV models in North America and Europe, the establishment and development of local distribution channels in the United States, and ongoing investments in research and development for new ECV models, materials, techniques, and sustainable energy technologies. Management also notes the intention to regionalize manufacturing and supply chains for key ECV components to reduce costs and strengthen the brand in local markets, and to expand product offerings to include next-generation energy and power technology products.