Kandi Technologies Group, Inc. Annual Report: A Performance Review

I’ve put together this guide to help you understand how Kandi Technologies performed this year. My goal is to break down their complex financial filings into simple terms so you can decide if this company fits your investment goals.

1. What does this company do?

Kandi has shifted its focus from standard electric cars to electric off-road vehicles, such as ATVs, UTVs, and go-karts. They design and build these products in China, primarily for the U.S. market.

Important Structure Note: Kandi is a "holding company" based in the British Virgin Islands (BVI). When you buy KNDI stock, you aren't buying a direct piece of the Chinese factories. You are buying a stake in a BVI company that owns those factories through contracts. This structure gives the company flexibility, but it limits your legal protections. You have no direct claim on the assets located in China.

2. Financial Performance: A Tough Year

Kandi is struggling to grow. Total revenue fell from $127.6 million in 2024 to $87.4 million in 2025—a 31% drop.

• Where the money comes from: Most sales ($82.8 million) now come from off-road vehicles. The rest comes from electric vehicle parts and other products.
• Geographic shift: U.S. sales fell from $74.2 million to $64.2 million. China sales plummeted from $53.3 million to $23.2 million, showing weak demand in their home market.
• Customer Concentration: Kandi relies on a few big buyers. In 2025, their top customers accounted for 60% of all sales. The largest single customer made up 28% of total revenue. If one of these major buyers leaves, it would significantly hurt the company’s income.

3. Major Risks: The "Reality Check"

Beyond the "China Factor," the company faces several operational risks:

• "Foreign Private Issuer" Status: Because Kandi is a BVI company, they don't follow strict U.S. rules regarding executive pay disclosure or quarterly reporting. You get less transparency and fewer updates than with a typical U.S. stock.
• Legal Hurdles: If you have a legal dispute, you may have to sue in the BVI. Even if you win, collecting money from a company with assets in China is often impossible.
• Regulatory Volatility: The Chinese government can change rules quickly. New laws regarding data privacy or anti-monopoly rules could impact their ability to operate or stay listed on a U.S. exchange.
• Supply Chain: They rely on a small group of suppliers. In 2025, two suppliers accounted for 66% of their total purchases. If these suppliers face production delays, Kandi’s production stops because they have few alternatives.

4. Future Outlook

Kandi is in a "prove it" phase. They reduced their workforce from 840 employees in 2023 to 595 in 2025 to cut costs. They are betting their future on the U.S. off-road market, using their Dallas-based subsidiary to manage sales and distribution.

While they hold over 200 patents and benefit from a lower 15% tax rate in China, the declining revenue and heavy reliance on a few customers make this a high-stakes investment. Their success depends on growing their U.S. network while managing the risks of their BVI-China structure.

Final Thought for Investors: Kandi is currently navigating a significant revenue decline. Before investing, consider whether the potential of their U.S. off-road vehicle strategy outweighs the risks of their BVI-China corporate structure and their heavy reliance on a very small group of customers and suppliers.