Microvast Q1 Earnings Call Highlights

Key Points

• Revenue fell sharply in Q1 2026 to $60.6 million, down 48% year over year, as lower sales volumes and delayed customer procurement hit deliveries across the U.S., Europe, and Asia-Pacific.
• Despite the revenue drop, Microvast said its long-term growth plan remains intact, with the Huzhou Phase 3.2 expansion on track for 2026 and expected to add up to 2 GWh of annual production capacity.
• The company is also pushing a new LFP battery pack and school bus powertrain strategy, aiming to lower electric school bus costs and target total cost of ownership parity with diesel buses without relying heavily on subsidies.

Microvast NASDAQ: MVST reported a sharp year-over-year revenue decline in the first quarter of 2026, while management said the drop reflected temporary timing and market challenges rather than a change in the company’s long-term growth strategy.

The battery technology company posted first-quarter revenue of $60.6 million, down $55.9 million, or 48%, from the same period in 2025. Chief Financial Officer Rodney Worthen said the decrease was primarily driven by lower sales volume, with deliveries falling to approximately 274 megawatt-hours from about 536 megawatt-hours in the prior-year quarter.

Gross profit was $19.2 million, and gross margin was 31.6%, compared with 36.9% in the first quarter of 2025. Worthen said the margin decline was mainly tied to lower production utilization, reduced fixed-cost absorption, and higher raw material and energy costs stemming from supply chain disruptions.

“Even with these reduced sales volumes in the quarter, our margin position held strong, demonstrating the value of our technology,” Worthen said.

Revenue Pressured by Timing, Regional Headwinds

Management pointed to several factors behind the quarterly revenue decline, including customer procurement timing, tariff uncertainty, delayed OEM platform rollouts and shifting regional demand.

Worthen said U.S. sales declined from the prior year because Microvast’s largest customer pulled product into 2025 amid uncertainty around tariff outcomes. In Europe, revenue declined year over year due to delayed OEM platform rollouts and production ramp-ups, though the region represented 71% of quarterly revenue, up from 52% a year earlier.

In the Asia-Pacific region, revenue fell 66% year over year. Worthen attributed the decline primarily to regulatory and geopolitical dynamics affecting the Korean and Indian markets, as well as a shift in India toward lower-cost products.

The company also cited broader conditions affecting the battery sector, including moderating global electric vehicle demand growth, the expiration of government incentive programs, evolving tariff structures, and geopolitical instability.

Net Profit Driven by Non-Cash Items, Adjusted Loss Reported

Microvast reported GAAP net profit of $48.2 million for the quarter. However, after adjusting for non-cash items including $1 million of stock-based compensation and $63.8 million in fair value changes related to warrant liabilities and a convertible loan, the company recorded an adjusted net loss of $14.6 million. That compared with adjusted net profit of $19.3 million in the prior-year period.

Adjusted EBITDA was negative $5.5 million for the quarter, compared with positive adjusted EBITDA of $28.5 million in the same period last year.

Operating expenses declined 7.1% year over year to $27.1 million. General and administrative expenses decreased by $1.2 million, helped by lower credit loss allowances and reduced employee costs, partially offset by higher professional service fees. Research and development expenses rose by $0.6 million, which Worthen said was primarily due to expansion of the company’s domestic R&D presence in the U.S. Selling and marketing expenses declined by $1.5 million, mainly due to lower service fees.

Microvast ended the quarter with $174 million in cash, cash equivalents and restricted cash. Net cash used in operating activities was $22.8 million, compared with $7.2 million generated by operating activities in the same period of 2025. Net cash used in investing activities was $2.8 million, while financing activities generated $29.3 million, primarily due to higher proceeds from bank borrowings.

Huzhou Expansion Remains Key 2026 Catalyst

Founder, Chairman and Chief Executive Officer Yang Wu said Microvast remains focused on bringing additional capacity online through its Huzhou Phase 3.2 expansion, which he described as a critical component of the company’s growth strategy.

Wu said trial production for the company’s 55 amp-hour cell has been completed on the electrode section, while assembly and formation equipment is undergoing material-based commissioning. The company expects start of production in 2026, with Phase 3.2 expected to add up to 2 gigawatt-hours of annual production capacity.

During the question-and-answer portion of the call, Wu said Microvast has approximately 4 gigawatt-hours of production capacity across its primary Huzhou lines, Phase 3.1, and Phase 3.2, with legacy lines contributing as needed for lower-volume products and service needs. He said the company is increasingly shifting Huzhou allocation toward next-generation cell production.

Wu said the remaining milestones for Huzhou Phase 3.2 include final calibration of the assembly line and completion of internal quality validation for high-volume output. He said the company remains on track to move from trial production to full serial production in 2026.

Company Introduces LFP Pack and School Bus Powertrain Strategy

Microvast also announced its next-generation 290 amp-hour lithium iron phosphate, or LFP, battery pack, which Wu said is designed for commercial and heavy-duty industrial applications. The company expects to integrate the packs into its CAF electric powertrain solution.

Wu described CAF as a potential total solution for electrifying the U.S. school bus market, which he said includes nearly half a million conventional school buses. The proposed system would include high-voltage LFP packs, traction drivetrain components, and Microvast’s proprietary nitrogen generation and storage system. Wu said the nitrogen purging system is intended to substantially reduce the risk of thermal propagation.

Microvast plans to partner with mature, high-volume suppliers for specific drivetrain components. Wu said the company aims to lower the cost barrier for electric school bus platforms in the U.S. and reduce reliance on subsidies.

According to Wu, current electric school buses can cost more than $350,000, forcing school districts to rely on grant programs. He said Microvast is targeting total cost of ownership parity with diesel buses in under 10 years, excluding government subsidies and potential reductions in maintenance-related overhead.

The company plans to present the new battery pack at the School Transportation News EXPO in July 2026.

Management Reaffirms Focus on Profitability and High-Value Markets

Wu said Microvast’s 2026 strategy remains centered on accelerating the path to profitability, scaling with margin discipline, and capturing high-value markets in heavy industry and transit.

He said the company is working to optimize its R&D-to-production cycle and tighten execution across its global footprint. Microvast is also ramping a pack assembly line in Clarksville, Tennessee, to expand domestic capabilities and support anticipated customer demand. Wu said resumption of full-scale battery plant construction at the site remains dependent on securing additional financing and strategic partnerships.

Worthen said the company expects a steadier cadence as next-generation cell production timelines align with customer demand in the second half of the year. He said management views the first-quarter revenue decline as reflecting “a unique set of timing challenges” and expects a normalized delivery schedule and continued ramp-up through 2026.

About Microvast NASDAQ: MVST

Microvast Holdings, Inc, traded on NASDAQ under the symbol MVST, is a global provider of advanced lithium-ion battery solutions for transportation and stationary energy storage applications. The company designs, develops and manufactures a range of battery cells, modules and packs tailored to electric buses, commercial vehicles, passenger cars and grid storage systems. Its technology emphasizes fast charging, long cycle life and high energy density to meet stringent performance requirements in demanding operating environments.

Founded in 2006, Microvast has established a vertically integrated platform that spans research and development, pilot production and full-scale manufacturing.

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