Microvast (NASDAQ:MVST) reported second-quarter revenue of $87.3 million, down 4.5% from the same period in 2025, as a tariff refund to a customer and lower U.S. sales weighed on results. The battery manufacturer also cited higher raw-material costs and lower production utilization as pressures on profitability.
Chief Financial Officer Rodney Worthen said the quarterly revenue decline of $4.1 million was primarily driven by a $2.7 million tariff refund issued to a customer, which was recorded as a reduction in current-period revenue.
Quarterly Loss Widens as Expenses Rise
Microvast recorded a GAAP net loss of $12 million in the second quarter. Its adjusted net loss was $5.3 million, compared with adjusted net profit of $16.3 million a year earlier. Non-GAAP adjusted EBITDA was $3.6 million, down from $25.9 million in the second quarter of 2025.
Operating expenses increased 16.1% year over year to $27.5 million. General and administrative expense rose by $2.7 million, or 24.2%, largely due to a $2.6 million increase in legal and other professional-service fees.
Research and development expense increased $1.1 million, or 14.8%, as the company expanded investment in new product development and incurred higher labor costs. Selling and marketing expense rose $1.3 million, or 38.5%, mainly due to higher service fees tied to customer-retention initiatives, partly offset by lower personnel costs.
First-Half Revenue and Sales Volumes Decline
For the first six months of 2026, revenue fell by $60 million, or 28.8%, from the prior-year period. The company attributed the decline primarily to a 24.3% reduction in sales volumes, which fell to about 717 megawatt-hours from roughly 947 megawatt-hours a year earlier, as well as the $2.7 million tariff refund.
First-half gross margin was 30.4%, compared with 36% in the first half of 2025. Operating expenses increased 3.3% to $54.6 million. Microvast reported GAAP net income of $36.2 million for the six-month period, while adjusted net loss was $19.9 million, compared with adjusted net profit of $35.6 million a year earlier. Non-GAAP adjusted EBITDA was negative $1.9 million, versus positive $54.4 million in the prior-year period.
By region, European sales rose 35% in the second quarter and accounted for 61% of revenue, up from 43% a year earlier. Year-to-date European sales were down 3%, which Worthen said reflected customer platform rollout delays in the previous quarter.
U.S. sales declined year over year, affected by the tariff refund and by the company’s largest customer bringing product into 2025 amid uncertainty surrounding tariff outcomes. Asia-Pacific sales declined 23% during the quarter and were down 45% year to date. The company cited shifting regulatory and geopolitical dynamics and a shift in Indian demand toward lower-cost products.
Cash Position and Manufacturing Expansion
Net cash used in operating activities was $33.3 million during the first half, compared with $44.3 million generated in the same period of 2025. Worthen attributed the change to a $60.6 million reduction in net income after non-cash items and a $17 million change in operating assets and liabilities.
Cash used in investing activities was $3.3 million, including the purchase of the company’s U.S. office building and capital expenditures for the Huzhou Phase 3.2 manufacturing expansion. Financing activities generated $8.2 million during the first half, driven primarily by higher bank-borrowing proceeds and lower deferred payments for property, plant and equipment, partly offset by increased debt repayments.
After foreign-exchange adjustments, cash declined by $26.2 million during the six months. Microvast ended the quarter with $143.1 million in cash equivalents and restricted cash.
Founder, Chairman and Chief Executive Officer Yang Wu said installation and commissioning of equipment for the Huzhou Phase 3.2 expansion had been completed. The company expects production capacity to ramp and anticipates start of production in 2026. The expansion is expected to add up to 2 gigawatt-hours of annual capacity across its large battery-cell platform.
Solid-State Battery Development and U.S. Assembly Plans
Wu also outlined developments in the company’s solid-state battery program. He said Microvast had scaled its development-stage series-connected bipolar cell architecture to a 17-layer monolithic stack producing about 72 volts without liquid electrolyte. In extended laboratory testing, the prototype retained about 88.5% of capacity after 200 cycles at 0.33C, according to the company.
The company said the architecture is primarily focused on robotics applications and could reduce the need for heavy interconnects and electronics used to drive high-torque robotic motors. Microvast also said a prototype cell showed no ignition or smoke in controlled hot-box testing up to 200 degrees Celsius.
In addition, Wu said an early laboratory all-solid-state silicon-sulfur prototype achieved initial specific capacity exceeding 1,000 milliamp-hours per gram and retained more than 90% of capacity after 15 cycles.
Looking ahead, Wu said Huzhou Phase 3.2 remains a central 2026 operational priority, with serial production expected later in the year. Pack-line assembly in Clarksville, Tennessee, remains scheduled for initial output by year-end, though full-scale battery plant construction there remains contingent on additional financing or strategic partnerships.
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.
