10-K: Cenntro Inc. Reports Fiscal Year 2025 Results

Cenntro Inc. filed its annual report on Form 10-K for the fiscal year ended December 31, 2025, detailing a significant decrease in revenue and a net loss, alongside strategic shifts in its distribution model and product development.

Summary

• Cenntro Inc. reported net revenues of $18.1 million for the fiscal year ended December 31, 2025, a decrease of 42.2% from $31.3 million in the prior year.
• The company experienced a gross loss of $2.3 million, with a negative gross margin of -12.8% for the year, a significant decline from a gross profit of $7.6 million and a positive gross margin of 24.3% in 2024.
• Net loss for the year was $73.0 million, compared to $44.9 million in the previous year.
• The company's strategy has shifted, with a focus on dealer-led distribution in North America and channel partners in international markets, leading to the closure of some EV centers.
• Product development continues, with advancements in hydrogen-powered heavy-duty vehicles and next-generation energy products.
• The company is addressing Nasdaq's minimum bid price deficiency through a 1-for-60 reverse stock split, effective April 13, 2026.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing as negative due to the significant decline in revenue, the shift to a gross loss, and the substantial increase in net loss, despite some positive developments in international markets and product diversification.

Positives

• Net revenues in the European market increased by $6.5 million to $12.2 million for the year ended December 31, 2025, compared to $5.7 million in 2024.
• The company is advancing product development in hydrogen-powered heavy-duty vehicles, with a prototype BM860H completed and tested in December 2025.
• Cenntro has secured an order for 500 customized Metro MR vehicles for delivery in Japan, indicating expansion into Asian markets.
• The company has made progress in securing government incentive support for the LS450 through the New York Truck Voucher Incentive Program (NYTVIP), with an estimated aggregate subsidy of $6.7 million for submitted applications.
• The company has a pipeline of next-generation energy and power technology products under development, including methanol-based hydrogen generation systems and solid-state battery manufacturing capabilities.

Negatives

• Net revenues decreased by 42.2% to $18.1 million in 2025 from $31.3 million in 2024.
• Gross loss for the year ended December 31, 2025, was $2.3 million, a significant deterioration from a gross profit of $7.6 million in 2024.
• The company reported a net loss of $73.0 million for the year ended December 31, 2025, an increase from a net loss of $44.9 million in 2024.
• The gross margin for vehicle sales was negative 3.22% in 2025, down from a positive 24.9% in 2024.
• The company identified a material weakness in its internal control over financial reporting related to accounting staff expertise and internal control processes.

Risks

• The company has a limited operating history and faces significant challenges in an emerging industry, including the ability to design and manufacture safe, reliable, and quality ECVs on an ongoing basis.
• The company has historically incurred losses and may not be profitable in the future, with significant up-front investments in R&D, supply chain, and facilities.
• The company's ability to develop and manufacture ECVs of sufficient quality, on schedule, and at scale is still evolving, with potential for manufacturing bottlenecks and delays in launching new models.
• The company's reliance on its new hybrid distribution model is subject to substantial risks, as it does not maintain full control over all remaining channel partners and its newly established EV Center dealerships are relatively new.
• Changes in international trade policies, tariffs, and rising political tensions, particularly between the U.S. and China, may adversely impact the company's business and operating results.
• The company's common stock may be delisted under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect its auditors.
• The company is subject to numerous significant challenges and uncertainties outside of its control, including limited control or oversight over manufacturing partners and channel partners.

Future Outlook

The company plans to continue the rollout of new ECV models in North America and Europe, establish local distribution channels in the United States, and expand its technology through continued investment in R&D. Long-term plans include regionalizing manufacturing and supply chains in North America and the European Union.

Management Comments

• We believe that these cost reductions outlined by BNEF will continue to improve the economics of battery-powered ECVs, like ours.
• We believe our distributed manufacturing methodology allows us to execute our business plan with less capital than would be required by the traditional, vertically integrated automotive model and, in the long-term, drive higher profit margins.
• We believe that a reinvigorated and in-house managed distribution model that is founded on local and strategically placed EV Centers together with local dealers and service networks will enhance brand recognition, provide economic advantages and reduce time to market for our ECVs.
• We believe our strategy to manage and support our EV Centers and distribution network will distinguish Cenntro from other traditional EV automakers and build a solid distribution and service infrastructure in local markets.
• We believe that investing in the regionalization of our manufacturing and supply chain can ultimately provide significant benefits to us and our channel partners.

Industry Context

StockSavvy.ai notes that Cenntro operates in the rapidly growing electric commercial vehicle (ECV) market, which is projected to reach $1.298 trillion by 2033, driven by government regulations and incentives aimed at reducing emissions. The company is also positioning itself in the emerging hydrogen vehicle market, which is expected to grow significantly.

Comparison to Industry Standards

• The global EV market was valued at approximately $988.70 billion in 2025 and is projected to reach $2,529.10 billion by 2034, with a CAGR of 11%.
• The global electric commercial vehicle (ECV) market is projected to reach $190.9 billion in 2025, with a CAGR of 25.56% from 2025-2033, reaching $1,298.26 billion by 2033.
• The global hydrogen vehicle market is projected to grow at a CAGR of 31.94% from 2025 to 2032, reaching approximately $19.92 billion by 2032.

Management Changes

Legal Proceedings

• Xiongjian Chen filed a complaint alleging breach of contract and tort claims related to stock options, seeking $19 million in damages. The court dismissed claims against CAG and CEL for lack of personal jurisdiction, and dismissed claims against Wang and CENN without prejudice, allowing Plaintiff to amend his complaint. The District Court dismissed all claims except for the promissory estoppel claim against Peter Wang.
• Cenntro Electric Group (Europe) GmbH (CEGE) initiated legal proceedings against its former landlord for the return of a EUR 180,000 rental deposit.
• Cenntro Automotive Corporation (CAC) submitted an application for arbitration against Anhui Deepway Technology Co., Ltd. (Deepway) for economic damages and continuation of performance of a Strategic Cooperation Agreement. The parties reached a settlement, and the arbitration was withdrawn.
• CEGL filed a lawsuit against MHP Americas, Inc. (MHP) for breach of contract related to SAP S/4HANA implementation, seeking remittance of $512,226 paid and rescission of the remaining contract. Mediation is scheduled.
• BAL Freeway Associates, LLC filed an Unlawful Detainer against Cenntro Automotive Corporation for non-payment of rents. Partial settlement was reached, restoring possession to BAL Freeway Associates, with damages remaining outstanding.
• Shenzhen Jiangxin Automation Technology Co., Ltd. filed a lawsuit against Hangzhou Ronda Tech Co., Limited (Ronda) seeking payment for equipment purchase price and accrued interest. Ronda asserted a counterclaim for non-fulfillment of contractual obligations.
• Wuxi Hefu Metal Products Technology Co., Ltd. filed a lawsuit against Hangzhou Ronda Tech Co., Limited (Ronda) seeking payment of mold development fees plus accrued interest. The court froze Ronda's bank deposits.
• American Quartz Group, Inc. filed an Unlawful Detainer action against Bison Motors Inc. (Bison) seeking possession of the premises. Bison filed a separate complaint against AQGI asserting claims including forcible detainer and conversion.
• Ride Man LLC filed a civil complaint against Cenntro Automotive Corporation and Cenntro, Inc. alleging breach of warranty and violations of the New Jersey Consumer Fraud Act in connection with the purchase of commercial electric vehicles.

Related Party Transactions

• On July 28, 2022, Cenntro Electric Group (Europe) GmbH (CEGE) invested EUR 2.5 million to acquire 25% of Antric GmbH's share capital.
• On March 25, 2022, CAE entered into a managing directors contract with Mr. Gregory Hancke, entitling him to an annual base salary of €240,000.
• On April 15, 2025, Cenntro Inc. entered into a loan agreement with Zhongchai Holding (Hong Kong) Limited, an indirect wholly owned subsidiary of Greenland Technologies, to borrow up to $1.0 million at 7.50% per annum.

Stakeholder Impact

• Shareholders may experience dilution due to future issuances of common stock.
• The company's common stock price may be volatile and decline due to various factors, including market conditions and the company's financial performance.
• Concentration of ownership among executive officers and directors may limit the influence of new investors on significant corporate decisions.
• Failure to maintain Nasdaq listing could lead to reduced investor protections and liquidity on over-the-counter markets.
• The company's financial results and operations could be adversely affected by changes in China's economic, political, or social conditions, or government policies.

Next Steps

• Continue the rollout of new ECV models in North America and Europe.
• Establish and develop local distribution channels in the United States.
• Address Nasdaq's minimum bid price deficiency through the 1-for-60 reverse stock split effective April 13, 2026.
• Progress toward commercial production of the BM860H hydrogen fuel cell semi-tractor following completion of certification processes.
• Continue to leverage technology reserves to expand product portfolio and addressable market opportunities.

Key Dates

Recommendation

While Cenntro is operating in a growing market with innovative products like hydrogen vehicles, the significant revenue decline, gross loss, and increased net loss in FY2025, coupled with the ongoing challenges of scaling production and distribution, warrant a cautious approach. The company's efforts to address Nasdaq listing requirements and its strategic restructuring are positive, but the financial performance indicates a need for stabilization before a more positive outlook can be considered. Therefore, a 'hold' recommendation is appropriate, pending evidence of improved financial performance and successful execution of its strategic initiatives.

Keywords

Cenntro Inc., Form 10-K, Annual Report, Electric Commercial Vehicles, ECV, Automotive, Manufacturing, Distribution, Financial Results, Net Loss, Revenue Decline, Reverse Stock Split, Nasdaq, Hydrogen Vehicles