Kandi Technologies 2025 Full Year Earnings Call - Pivoting Toward Infrastructure and Robotics Amid Revenue Slump

Conference Operator: Greetings. Welcome to Kandi Technologies Full Year 2025 financial results call at this time operative only stand. I will now turn the conference over to Kewa Luo, IR Director. Thank you. You may begin.

Kewa Luo, Investor Relations Director, Kandi Technologies Group: 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. Jehn Ming 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 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.

Feng Chen, Chief Executive Officer, Kandi Technologies Group: 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. 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. 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. 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.

Feng Chen, Chief Executive Officer, Kandi Technologies Group: 从2026年开始，康迪将进入新的增长阶段。我们的战略仍然围绕双引擎展开。

Feng Chen, Chief Executive Officer, Kandi Technologies Group: Beginning in 2026, Kandi is entering new phase of growth. Our strategy will be anchored around two core engines.

Feng Chen, Chief Executive Officer, Kandi Technologies Group: 第一引擎是以北美市场为核心的非公路电动车业务，包括UTV、高尔夫球车、电动越野产品等。这是康迪的基本盘，也是我们现金流和渠道能力的基础。今年一季度，该核心业务的整体销售表现积极，渠道拓展持续取得进展，合作经销商数量持续增加，同时单店销售表现也有明显提升。这不仅进一步增强了我们在核心市场的覆盖能力和品牌影响力，也为全年业务增长奠定了良好基础。2026年，我们会围绕北美UTV业务进行重点升级，包括新车型设计、产品体验优化、渠道效率提升和供应链响应能力建设。我们已经制定了明显高于过去水平的内部销量目标，并引入具备量产车型经验的外部汽车设计团队，参与下一代UTV产品设计。我们的目标不是简单多卖几台车，而是提升康迪在北美户外休闲和低碳出行市场的产品竞争力。

Feng Chen, Chief Executive Officer, Kandi Technologies Group: 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 de-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.

Feng Chen, Chief Executive Officer, Kandi Technologies Group: 另外，2025年12月，公司签署协议收购美国高端电动越野摩托车品牌Rawrr。Rawrr并入后，我们的目标是在2026年把高端电动越野摩托车打造为北美产品组合中一个有实际贡献的新增长品类。Rawrr与康迪现有的北美渠道、供应链和产品矩阵之间具有协同空间。我们会重点推进品牌整合、渠道协同、供应链优化和产品迭代，让这个业务真正形成收入贡献，而不是停留在并购概念上。

Feng Chen, Chief Executive Officer, Kandi Technologies Group: 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.

Feng Chen, Chief Executive Officer, Kandi Technologies Group: 第二引擎目前有能源换电装备和智能机器人两个新兴业务组成。

Feng Chen, Chief Executive Officer, Kandi Technologies Group: Our second engine comprises emerging battery swapping equipment and intelligent robotics business.

Feng Chen, Chief Executive Officer, Kandi Technologies Group: 能源换电装备将是2026年最重要的突破口。2025年8月，公司旗下中换电进入宁德时代换电设备供应体系，并取得首个重卡换电站设备订单。2026年1月，中换电与宁德时代旗下时代奇迹签署战略合作协议，围绕重卡换电站量产展开合作。基于目前订单能见度和排产安排，我们确定在2026年能获得可观的收入。

Feng Chen, Chief Executive Officer, Kandi Technologies Group: 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.

Feng Chen, Chief Executive Officer, Kandi Technologies Group: 我们认为，换电装备业务对康迪的意义不只是新增收入，而是让公司从单一低碳出行产品进一步延伸到新能源基础设施装备领域。下一阶段，我们会重点推动重卡换电站订单的交付，小批量到规模化交付能力建设，以及港口、矿山、干线物流等场景的商业化机会。

Feng Chen, Chief Executive Officer, Kandi Technologies Group: 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.

Feng Chen, Chief Executive Officer, Kandi Technologies Group: 在智能机器人方向，我们聚焦四足机器人在安防巡检和物流园区等场景中的应用。公司已经与HawkRobo Systems签署了战略合作协议，将共同成立合资公司KH Robotics，并通过KH Robotics在北美推进本地化测试和商业部署准备。我们预计第一版demo将在2026年6月左右完成，并计划在下半年进入场景测试和首批试点部署阶段。这个业务目前仍处于早期阶段，我们不会过度承诺短期收入，但会用明确的产品节点和场景验证来推进。

Feng Chen, Chief Executive Officer, Kandi Technologies Group: 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.

Feng Chen, Chief Executive Officer, Kandi Technologies Group: 供应面方面，公司将继续强化中国大陆核心研发与制造、台湾地区灵活产能、美国本地组装和渠道前置的全球布局。这个体系的核心目的是提升公司面对关税、贸易政策和地缘政治不确定性的抗风险能力，同时提高对北美市场需求变化的响应速度。

Feng Chen, Chief Executive Officer, Kandi Technologies Group: 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.

Feng Chen, Chief Executive Officer, Kandi Technologies Group: 展望二零二六年，我们会重点看四件事。第一，北美UTV和低碳出行产品的销量恢复和产品升级。第二，Rawrr收购后的整合和实际收入贡献。第三，换电装备业务从首批订单交付走向规模化销售。第四，智能机器人业务完成demo、产品测试和首批试点。

Feng Chen, Chief Executive Officer, Kandi Technologies Group: 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.

Feng Chen, Chief Executive Officer, Kandi Technologies Group: 同时，我们会坚持审慎的资本配置原则。公司现金储备不是盲目扩张的理由，而是让我们在不确定环境中保持战略选择权。未来任何新业务投入、并购和产能布局都必须服务于长期股东回报，并接受商业化进展、现金回收周期和风险收益比的检验。

Feng Chen, Chief Executive Officer, Kandi Technologies Group: 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.

Feng Chen, Chief Executive Officer, Kandi Technologies Group: 今天的康迪拥有清晰的控股平台架构，聚焦的双引擎战略，韧性的全球供应链，以及充裕的现金储备。我坚信，凭借这些核心能力与战略布局，我们将把制造乐趣，驱动未来这一愿景转化为股东确实感受到的长期价值。

Feng Chen, Chief Executive Officer, Kandi Technologies Group: 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.

Feng Chen, Chief Executive Officer, Kandi Technologies Group: 接下来，我把时间交给我们的首席财务官 Jehn Ming Lim，为大家详细介绍公司二零二五年全年的业绩表现。谢谢大家。

Feng Chen, Chief Executive Officer, Kandi Technologies Group: Let me turn the call over to our CFO, Jehn Ming Lim, who will provide details on our full year 2025 financial performance. Thank you.

Jehn Ming Lim, Chief Financial Officer, Kandi Technologies Group: Thank you, Mr. Chen and Luo. 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 Kiwa for any final comments. Thank you.

Kewa Luo, Investor Relations Director, Kandi Technologies Group: 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.