Microvast Flags Going-Concern Doubt After Sales Collapse

The Tip Desk · November 9, 2026 · 4 min read

Third-quarter revenue fell to $45.8 million and the company said cash is expected to be insufficient for the next twelve months absent financing or debt relief.

Microvast Holdings (MVST), a battery-systems maker, reported third-quarter revenue of $45.8 million, down $77.5 million, or 62.8%, from $123.3 million a year earlier, as sales volume collapsed to approximately 189.6 MWh from approximately 501.7 MWh.

Revenue fell sequentially from $87.3 million in the second quarter, following a first-quarter-to-second-quarter increase from $60.6 million to $87.3 million. Founder, Chairman and Chief Executive Officer Yang Wu said the quarter presented a highly challenging operating environment, citing softer commercial-vehicle demand in Europe and APAC and industry pricing pressure. The company said the volume decline reflected weaker sales across Europe and APAC on softer demand for heavy-duty trucks, port equipment and heavy mining equipment, reduced orders from several long-standing customers, and regulatory and geopolitical dynamics including the Indian and Korean markets and a shift toward lower-cost products in India. U.S. sales versus the year-ago period were primarily due to the company’s largest customer bringing product into 2025 amid tariff uncertainty.

Gross margin compressed to 5.2% from 29.5% in the second quarter. A $9.3 million write-down for obsolete specialized energy-storage-system components and other inventories reduced the quarter’s gross margin by 20.4 percentage points. Excluding that non-cash charge, the company attributed the remaining decline to the volume reduction, lithium-battery pricing pressure and weaker absorption of fixed manufacturing and operating costs.

Operating expenses rose to $69.0 million from $27.5 million in the second quarter, including $35.7 million of non-cash long-lived-asset impairments — $15.0 million in China, $4.4 million in Germany and $16.3 million in the United States — that the company said resulted from impairment testing of production-line and construction-in-progress assets triggered by the sales, gross-margin and operating-performance decline. Net loss widened to $76.8 million from a $12.0 million net loss in the second quarter, or $0.20 a share. Non-GAAP adjusted net loss was $76.0 million, compared with a $5.3 million adjusted loss in the second quarter. Non-GAAP adjusted EBITDA was negative $60.8 million.

Cash, cash equivalents and restricted cash declined to $124.4 million at September 30, 2026, from $143.1 million at June 30. Of the cash and cash equivalents, $30.4 million was held by Chinese subsidiaries and $14.4 million by European subsidiaries; the company said it is currently unable to repatriate cash from China and Europe to fund U.S. operations. Total debt was $177.0 million, including $135.3 million of bank borrowings and $41.7 million of convertible bonds issued by Microvast Power Systems Co., Ltd. Current bank borrowings, notes payable and current bonds payable totaled approximately $196.0 million, with a working-capital deficit of $3.1 million. Usable cash across all entities was approximately $71.3 million as of October 31, 2026.

Near-term obligations include $41.7 million of convertible bonds due on or before January 31, 2027, and $84.0 million of short-term bank loans of PRC subsidiaries maturing over the next twelve months. The company said it is in ongoing negotiations with lenders to refinance, extend or restructure those obligations and that a failure to make payments would result in an event of default and acceleration of substantially all bank borrowings and bonds payable. Subsequent to September 30, it repaid a remaining $22.4 million loan facility and refinanced an additional $8.9 million of short-term bank borrowings.

Management concluded that plans to alleviate substantial doubt about the company’s ability to continue as a going concern cannot be deemed probable of being effectively implemented, and that the substantial doubt has not been alleviated. Absent additional financing, refinancing or further cost reductions, the company said it expects available cash to be insufficient to meet obligations over the next twelve months, including near-term debt maturities and pending legal settlements. It said it has limited visibility into revenue for the next several quarters, that one significant European customer was recently acquired by a third party, and that it is implementing cost-reduction initiatives, reducing or deferring discretionary capital expenditures and targeted workforce reductions. Capital expenditures were $2.3 million in the quarter.

Installation and commissioning of Huzhou Phase 3.2 production equipment have been completed, with ramp dependent on customer demand, yields, qualification and working capital; the company said the line will operate below designed capacity unless volumes increase. The Clarksville pack assembly line is substantially completed, and full-scale construction remains contingent on additional financing or strategic partnerships.