Microvast Holdings Inc. (NASDAQ:MVST) stock plunged in premarket trading Tuesday after the battery maker reported weaker-than-expected third-quarter earnings and revenue.
Microvast reported an adjusted loss of 20 cents per share, missing the analyst estimate of earnings of 2 cents per share.
Revenue came in at $45.81 million, well below the $80.24 million analyst estimate.
Microvast Revenue Slumps As Demand Weakens
U.S. revenue fell 31% to $4.5 million from $6.6 million, primarily because a major customer moved purchases into 2025 amid tariff uncertainty.
Asia-Pacific revenue plunged 65% to $13.5 million. Weak demand, regulatory uncertainty and geopolitical tensions hurt sales. Customers in India also favored lower-cost products.
Quarterly sales volume dropped 62.2% to about 190 megawatt-hours (MWh).
Demand weakened across Europe and Asia-Pacific, particularly for heavy trucks, port equipment and mining machinery.
Lower orders from existing customers and changing commercial vehicle regulations added pressure.
Gross margin shrank to 5.2% from 37.6% a year earlier.
Lower sales volumes, pricing pressure and a $9.3 million inventory write-down weighed on profitability. The write-down reduced gross margin by 20.4 percentage points.
Cash, cash equivalents and restricted cash fell $44.8 million to $124.4 million at quarter-end.
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Microvast Moves to Preserve Cash
CEO Yang Wu said weak commercial vehicle demand in Europe and Asia-Pacific, along with pricing pressure, hurt revenue, margins and liquidity.
Microvast is cutting costs and preserving cash. It is also negotiating with lenders to refinance, extend or restructure debt coming due.
Microvast warned that substantial doubt about its ability to continue operating as a going concern remains unresolved. The company is exploring potential asset sales and negotiating with lenders to address near-term debt obligations. However, management cautioned that these efforts may not succeed.
Wu said equipment installation and commissioning at the Huzhou Phase 3.2 facility are complete. The Clarksville battery pack assembly line is also substantially finished.
However, the company’s financial recovery remains uncertain. Its refinancing efforts depend on lender decisions, while future sales hinge on customer demand.
China Battery Taxes Add Pressure
China introduced a 2% consumption tax on domestic lithium battery sales on Sept. 1, 2026. The tax will rise to 4% on Sept. 1, 2027.
China also reduced export rebates on certain battery products from 9% to 6% on April 1, 2026. The rebates will end Jan. 1, 2027.
Microvast faces additional pressure from rising raw material costs, tariffs, supply chain disruptions and reduced electric vehicle subsidies.
MVST Price Action: Microvast Holdings shares were down 56.28% at $0.27 during premarket trading on Tuesday, according to Benzinga Pro data.
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