Microvast warns cash may not cover obligations over 12 months, with $71.3 million available
Key Facts
Microvast warned that its available cash may not be sufficient to meet obligations over the next 12 months without additional financing, debt refinancing or maturity extensions, or further cost cuts. In its filing with the U.S. Securities and Exchange Commission, the company said usable cash across its entities was about $71.3 million as of October 31, 2026. The warning comes amid a sharp decline in sales and margins and alongside the release of third-quarter results. Management acknowledged that substantial doubt about the company’s ability to continue as a going concern had not been alleviated. It said its plans to address this doubt could not be considered probable of being effectively implemented.
Third-quarter revenue fell to $45.8 million, compared with $123.3 million in the same period of 2025, a decline of 62.8%. The company attributed most of the decrease to a 62.2% drop in sales volume, from about 501.7 megawatt-hours to 189.6 megawatt-hours. Chief Executive Yang Wu said the company faced a very challenging operating environment during the quarter. He added that demand for commercial vehicles weakened in key markets in Europe and Asia-Pacific, alongside pricing pressure in the sector. Wu linked the declines in sales, margin and operating performance to the liquidity constraints the company faced.
Gross margin fell to 5.2% in the third quarter from 37.6% a year earlier. The company said a $9.3 million write-off of obsolete inventory reduced margin by 20.4 percentage points. The write-off included specialized components for energy storage systems and other inventory. The company also cited the effects of lower sales volume and pricing pressure on margin. The contraction in margin, alongside the revenue decline, reflects a simultaneous drop in business activity and profitability during the period.
Cash and cash equivalents and restricted cash totaled $124.4 million as of September 30, 2026, compared with $169.2 million as of December 31, 2025, and $142.6 million as of September 30, 2025. But the usable cash figure the company later reported, $71.3 million as of October 31, reflects the amount it said was available across its entities. The company recorded net cash used in operating activities of $65.4 million during the nine months ended September 30, 2026. In the comparable period of 2025, operating activities generated $59.5 million. This shift in operating cash flow coincided with the declines in sales and margins.
The company faces obligations that include $41.7 million in convertible notes, due no later than January 31, 2027, as well as $84.0 million in short-term bank loans at its subsidiaries in China. The loans mature at various times over the next 12 months. Microvast said it is in ongoing negotiations with lenders over these obligations. But it warned that refinancing or maturity extensions on acceptable terms are not assured, nor is completion of those arrangements at all. The outcome of these negotiations is among the factors the company linked to cash sufficiency.
Microvast said it is pursuing initiatives to reduce operating expenses across all business areas and is cutting or deferring some discretionary capital expenditures. The measures include targeted workforce reductions in some operations. It said the cost-cutting program is not yet complete and that its cash costs have pressured short-term liquidity. Increasing production at its Huzhou Phase 3.2 line also depends on customer demand, production quality, product qualification, operating efficiency and working capital availability. The company warned that the line will operate below its designed capacity unless production increases sufficiently.
In trading, MVST shares closed at $0.2202 on November 10, 2026, according to EL7 data. Investing.com had reported that the stock fell 45.77% in after-hours trading on November 9 to $0.3349, following the results announcement. That came after the regular session closed at $0.6175. The decline reflects the market’s reaction to the third-quarter results during and after the announcement session. According to the company’s filing, liquidity over the coming months remains tied to financing, debt negotiations and completion of cost-cutting measures.