What changed in this filing

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Item 1. Business

2024-04-01 compared with 2023-06-30 · 554 added, 498 removed, 413 unchanged (72% of the section changed)

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Metro®, Logistar™, Logimax™, Avantier™, Teemak™ and Antric One.

We have successfully begun to produce and deliver these models into the global markets

We have successfully begun to produce and deliver these models into the global markets, apart from Logimax™.

We have also developed and introduced iChassis™:

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We continue to leverage our technology, vehicle development, and vehicle distribution capabilities with a goal to become a leading provider in the electric commercial vehicle (“ECV”) market.

Our greater mission is to

provide commercial vehicles that may be powered by sustainable sources while building eco-chains to reduce carbon dioxide for a better environment and quality of life.

With the global trend toward reducing the number of internal combustion engine (“ICE”) vehicles, electric-battery and fuel cell technologies stand out as strong

alternatives.

Our greater mission is to provide

commercial vehicles that may be powered by sustainable sources while building eco-chains to reduce carbon dioxide for a better environment and quality of life.

With the global trend toward reducing the number of internal combustion engine (“ICE”) vehicles, electric-battery and fuel cell technologies stand out as strong alternatives.

Prior to COVID-19, battery costs significantly decreased over the past decade.

We expect that over the long term, prices will continue to fall.

According to research service Bloomberg NEF (“BNEF”), lithium-ion battery pack prices

decreased from above $1,200 per kilowatt-hour in 2010 to $132/kWh in 2021.

According to research service Bloomberg NEF (“BNEF”), lithium-ion battery pack prices decreased from

above $1,200 per kilowatt-hour in 2010 to $132/kWh in 2021.

In real terms, this represented a decline of approximately 89%.

Although battery pack prices have recently increased and may continue to increase in the near-term due to

the rising price of lithium as a result of COVID-19 and other factors, we anticipate that battery prices will continue to decrease in the long-term.

BNEF further forecasts that by 2024, average prices are expected to fall to below $100/kWh,

though such reductions in average price may be delayed due to higher raw material prices in the near term.

By emphasizing investments in technology, supply-chains, vehicle distribution and aftermarket support, we have begun making our

own battery packs, preparing battery cell production, by building up vehicle distribution and service networks, and introducing our cloud-based parts distribution systems.

As investment in battery technology

continues to increase, we believe these cost reductions outlined by BNEF will continue to improve the economics of battery-powered ECVs, like ours.

In addition to our investment in battery-technology, we have established an asset-light, distributed manufacturing business model through which we may distribute our vehicles in

unassembled semi-knockdown vehicle kits (“vehicle kits”) for local assembly in addition to fully assembled vehicles.

Although battery pack prices have recently increased and may continue to increase in the near-term due to the rising price

of lithium as a result of COVID-19 and other factors, we anticipate that battery prices will continue to decrease in the long-term.

BNEF further forecasts that by 2024, average prices are expected to fall to below $100/kWh, though such reductions

in average price may be delayed due to higher raw material prices in the near term.

Additionally, while prices for key battery metals like lithium, nickel and cobalt have moderated slightly in recent months, BNEF expects average battery pack

prices to remain elevated in 2023 at $152/kWh (in real 2022 dollars).

BNEF expects battery price to start dropping again in 2024, when lithium prices are expected to ease as more extraction and refining capacity comes online.

Based on the updated

observed learning rate, BNEF’s 2022 Battery Price Survey predicts that average pack prices should fall below $100/kWh by 2026.

By emphasizing investments in technology, supply-chains, vehicle distribution and aftermarket support, we have begun

making our own battery packs, preparing battery cell production, by building up vehicle distribution and service networks, and introducing our cloud-based parts distribution systems.

As investment in battery technology continues to increase, we

believe these cost reductions outlined by BNEF will continue to improve the economics of battery-powered ECVs, like ours.

In addition to our investment in battery-technology, we have established an asset-light, distributed manufacturing business model through which we may distribute our vehicles

in unassembled semi-knockdown vehicle kits (“vehicle kits”) for local assembly in addition to fully assembled vehicles.

Some of our vehicle models have a modular design that allows for local assembly in micro factory facilities that require less

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substantially on private label channel partners to assemble and distribute the Metro® from vehicle kits that we manufactured in our facilities.

With building our own distribution and service infrastructure, we have begun the process of shifting

the manufacturing of our vehicle kits and in some cases fully assembled vehicles to third party Original Equipment Manufacturers (“OEMs”) manufacturing partners and, in the case of vehicle kits, assembling in our own facilities in North America

Our relationships with such third parties, our “manufacturing partners,” have allowed us to forego expensive capital investments in our own facilities and operate within our historic working capital limitations.

Throughout 2022 we began to re-align our distribution and marketing strategy away from relying mainly on third-party channel partners to a distribution model that combines wholly-owned EV Centers with local dealers in

order to improve overall operational efficiencies, product quality, brand value, market share, customer support and service.

Additionally, to meet our anticipated demand in the United States, we have established local assembly facilities in Northern America as we have launched assembly facilities in

Jacksonville, Florida and Freehold, New Jersey.

Our vehicle kits and in some cases fully assembled vehicles are completed by third party Original

Equipment Manufacturers (“OEMs”) manufacturing partners and, in the case of vehicle kits, assembled in our own facilities in North America and Europe.

Our relationships with such third parties, our “manufacturing partners,” have allowed us to

forego expensive capital investments in our own facilities and operate within our historic working capital limitations.

Throughout 2022 we began to re-align our distribution and marketing strategy away from relying mainly on third-party channel

partners to a distribution model that combines wholly-owned EV Centers with local dealers in order to improve overall operational efficiencies, product quality, brand value, market share, customer support and service.

Throughout 2023 we have

relied on our local EV Centers to develop local dealer networks that directly sell to local customers in order to improve overall operational efficiencies, product quality, brand value, market share, customer support and service.

Additionally, to meet our anticipated demand in the United States, we have established local assembly facilities in Northern America as we have launched assembly facilities

in Jacksonville, Florida and Freehold, New Jersey.

We are also in the of process establishing additional assembly facility in Ontario, California.

Additionally, we expect that our acquisition of CAE (f.k.a.

TME) in 2023 will further expand our local

assembly capacity in the European Union for production of our European ECV models, including the Teemak™ series, Antric products, in addition to the Metro®.

TME) in 2023 will further expand our

local assembly capacity in the European Union for production of some of our ECV models, including the Teemak™ series, Antric products, in addition to the Metro®.

Corporate Structure and History

Cenntro was incorporated in Australia on May 11, 2017, under the Australian Corporations Act 2001 (Cth) (the “Corporations Act”) with company registration number ACN 619 054

938, as an Australian public company limited by shares.

Our principal executive offices are located at 501 Okerson Road, Freehold, New Jersey, 07728, and our telephone number is (732) 820-6757.

Our current registered office and current

principal place of business in Australia are located at MinterEllison, Level 40, Governor Macquarie Tower, 1 Farrer Place, Sydney NSW 2000, Australia.

Our website address is www.cenntroauto.com.

Cenntro is a holding company incorporated in Australia and headquartered in New Jersey.

As a holding company with no material operations of its own, Cenntro Electric Group

Limited ACN 619 054 938 conducts operations through its subsidiaries in the United States, Europe, Mexico, Hong Kong, the Dominican Republic, and in the People’s Republic of China, which we refer to as the PRC or China.

On November 5, 2021, our predecessor NBG entered into an Acquisition Agreement with CAG to effect the Closing of the Combination which occurred on December 30, 2021, whereby NBG

purchased the Cenntro Shares to effect the Combination with the Acquisition Shares serving as good and valuable consideration.

Immediately after the Closing of the Combination, we changed our name from “Naked Brand Group Limited” to “Cenntro

Electric Group Limited”.

was incorporated in the State of Nevada on March 9, 2023, under The Nevada Revised Statutes (the “NRS”).

Our principal executive offices are located at 501

Okerson Road, Freehold, New Jersey, 07728, and our telephone number is (732) 820-6757.

Our current registered office and current principal place of business in Nevada are located at 701 S.

Carson Street, Suite 200, Carson City, NV 89701.

website address is www.cenntroauto.com.

Cenntro is a holding company incorporated in Nevada and headquartered in New Jersey.

As a holding company with no material operations of its own, Cenntro Inc.

operations through its subsidiaries in the United States, Australia, Europe, Mexico, Hong Kong, the Dominican Republic, and in the People’s Republic of China, which we refer to as the PRC or China.

On November 5, 2021, our predecessor Naked Brand Group Limited (“NBG”) entered into an acquisition agreement with CAG to effect a combination through reverse merger which

occurred on December 30, 2021 (the “Combination”), whereby NBG purchased the Cenntro Shares to effect the Combination using 174,853,546 ordinary shares (the “Acquisition Shares”) serving as good and valuable consideration.

Immediately after the

Closing of the Combination, we changed our name from “Naked Brand Group Limited” to “Cenntro Electric Group Limited” and the business conducted by Cenntro became the business conducted by the Company.

The transaction was accounted for as a

reverse recapitalization in which Cenntro was determined to be the accounting acquirer.

On February 27, 2024, our predecessor CEGL, a public company incorporated under the laws of Australia completed the Redomiciliation of CEGL.

As a result of the Redomiciliation, the jurisdiction

of incorporation of the ultimate parent company of the Cenntro group of companies was changed from Australia to Nevada, and as a result of CEGL becoming a subsidiary of the Company.

Prior to June 30, 2022, the Company historically qualified as a ‘foreign private issuer’ for purposes of reporting under the Securities Exchange Act of 1934, as amended (the

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Peter Wang was the founder and sole director of CMC.

CMC conducted

business to design and develop electric utility vehicles.

CMC conducted business to design and develop electric utility vehicles.

On January 28, 2014, Cenntro Automotives Group Limited (“CAG BVI”) was formed in British Virgin Islands to conduct electric vehicle related business worldwide outside of U.S.A.

On January 29, 2014, CAG BVI acquired

On January 29,

2014, CAG BVI acquired CMC.

CMC changed its name from “Cenntro Motor Corporation” to “Cenntro Motors Corporation” on August 5, 2014, and further changed from “Cenntro Motors Corporation” to “Cenntro Automotive Corporation” (“CAC”) on October 7,

On July 20, 2015, CAG BVI acquired Sinomachinery Equipment Limited, a Hong Kong corporation with its manufacturing subsidiary in PRC, Zhejiang Sinomachinery Co., Ltd.

(“Zhejiang Sinomachinery”).

Sinomachinery”).

Equipment Limited was renamed Simachinery Equipment Limited on November 2, 2015.

Sinomachinery Equipment Limited was renamed Simachinery Equipment Limited on November 2, 2015.

Zhejiang Sinomachinery registered Zhejiang Xbean Tech Co.

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On February 15, 2016, CAG Cayman formed its subsidiary, Cenntro Automotive (Hong Kong) Limited (“CAG HK”) in Hong Kong.

On March 2, 2016, CAG HK changed its name to “Cenntro Automotive Group Limited”.

CAG HK took over all Hong Kong and mainland China subsidiaries of CAG Cayman.

On March 2, 2016, CAG HK changed its name to “Cenntro Automotive Group

Subsequently CAG HK took over all Hong Kong and mainland China subsidiaries of CAG Cayman.

On May 6, 2015, CAG HK registered Hangzhou Cenntro Autotech Co., Ltd.

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On May 26, 2016, CAG Cayman merged with CAG BVI and CAG Cayman being the surviving entity.

After the merger, all shareholders of CAG BVI automatically became the shareholders of CAG Cayman and the percentage of

ownership unchanged.

After the merger, all shareholders of CAG BVI automatically became the shareholders of CAG Cayman and

the percentage of ownership unchanged.

CAG Cayman inherited and took over all existing rights, assets and liabilities of CAG BVI.

Subsequently CAG BVI was closed and cancelled.

CAG Cayman became the controlling parent company to continue carrying out the business

plan and operations.

CAG Cayman became the controlling parent company to continue carrying

out the business plan and operations.

In August 2016, Autotech acquired 100% equity interest of Hangzhou Hengzhong Tech Co., Ltd.

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On March 3, 2022, Cenntro Electric Group, Inc.

(CEGI) acquired 100% shares of Blitz F22-1 GmbH, a shell company registered on January 13, 2022 in Germany, and then renamed it

Cenntro Electric Group (Europe) GmbH.

(CEGI) acquired 100% shares of Blitz F22-1 GmbH, a shell company registered on January 13, 2022 in Germany, and then renamed it Cenntro Electric

Group (Europe) GmbH (“CEGE”).

On November 24, 2023, CEGI transferred 100% shares of CEGE to CEBV.

On March 23, 2022, CEGI acquired 65% of equity interest in Tropos Motors Europe GmbH (“TME”), a wholly owned subsidiary of Mosolf, and renamed TME to Cenntro Automotive Europe GmbH (“CAE”).

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Elektromobilite Araçlar A.Ş on February 21, 2023.

On December 16, 2022, CEGE invested in Antric GmbH (“Antric”) and became a 25% shareholder of Antric.

On August 31, 2023, CAE acquired the other 75% shares of Antric from Eric Diederich and

Moritz Heibrock, the original founders of Antric.

On January 16, 2023, CAC incorporated its wholly-owned subsidiary Cenntro Automotive S.A.S.

On January 31, 2023, CEGI incorporated its wholly-owned subsidiary Teemak Power Corporation in the state of Delaware.

On May 17, 2023, Teemak formed its wholly-owned subsidiary Teemak

Power (Hong Kong) Limited in Hong Kong.

On May 17, 2023, Teemak formed its wholly-owned subsidiary Teemak Power

(Hong Kong) Limited in Hong Kong.

On February 14, 2023, CEGI acquired all shares of Avantier Motors Corporation, a company incorporated on November 17, 2017, in the state of Delaware.

Avantier has not been

operating since incorporation.

Avantier has not been operating since

incorporation.

On March 13, 2023, Avantier formed its wholly-owned subsidiary Avantier HK in Hong Kong.

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in Spain from an individual Don Yong Wang.

On August 3, 2023, CEGI incorporated its wholly-owned subsidiary Pikka Electric Corporation in the state of Delaware.

On August 24, 2023, CEGI incorporated its wholly-owned subsidiary Cenntro Technology Corporation in the state of California.

On March 9, 2023, Cenntro Inc.

was incorporated under the laws of the state of Nevada.

On February 27, 2024, pursuant to the Redomiciliation CEGL became a wholly-owned subsidiary of Cenntro Inc.

As a result of the Redomiciliation, the jurisdiction of

incorporation of the ultimate parent company of the Cenntro group of companies was changed from Australia to Nevada, and as a result of CEGL becoming a subsidiary of the Company.

Holding Foreign Companies Accountable Act

Pursuant to the Holding Foreign Companies Accountable Act (the “HFCAA”), if the Public Company Accounting Oversight Board (the “PCAOB”), is unable to inspect an issuer’s auditors

for three consecutive years, the issuer’s securities are prohibited to trade on a U.S.

Pursuant to the Holding Foreign Companies Accountable Act (the “HFCAA”), if the Public Company Accounting Oversight Board (the “PCAOB”), is unable to inspect an issuer’s

auditors for three consecutive years, the issuer’s securities are prohibited to trade on a U.S.

stock exchange.

The PCAOB issued a Determination Report on December 16, 2021 (the “Determination Report”) which found that the PCAOB was unable to inspect or

investigate completely registered public accounting firms headquartered in:

The PCAOB issued a Determination Report on December 16, 2021 (the “Determination Report”) which found that the PCAOB was unable to

inspect or investigate completely registered public accounting firms headquartered in:

(1) mainland China of the People’s Republic of China because of a position taken by one or more authorities in mainland China;

and (2) Hong Kong, a Special Administrative

Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong.

Furthermore, the Determination Report identified the specific registered public accounting firms which are subject to these determinations.

December 23, 2022, United States Senate passed the Accelerating Holding Foreign Companies Accountable Act (the “AHFCAA”), which amended the HFCA Act by requiring the SEC to prohibit an issuer’s securities from trading on any U.S.

stock exchanges

if its auditor is not subject to PCAOB inspections for two consecutive years instead of three.

If trading in our Ordinary Shares is prohibited under the HFCA Act in the future because the PCAOB determines that it cannot inspect or fully

investigate our auditor at such future time, Nasdaq may determine to delist our Ordinary Shares.

and (2) Hong Kong, a Special

Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong.

Furthermore, the Determination Report identified the specific registered public accounting firms which are subject to these

determinations.

On December 23, 2022, United States Senate passed the Accelerating Holding Foreign Companies Accountable Act (the “AHFCAA”), which amended the HFCA Act by requiring the SEC to prohibit an issuer’s securities from trading on any

stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three.

If trading of our shares of Common Stock is prohibited under the HFCA Act in the future because the PCAOB determines that it

cannot inspect or fully investigate our auditor at such future time, Nasdaq may determine to delist our Common Stock.

On August 26, 2022, the PCAOB signed the SOP Agreements with the CSRC and China’s Ministry of Finance.

The SOP Agreements established a specific, accountable framework to make possible complete

inspections and investigations by the PCAOB of audit firms based in mainland China and Hong Kong, as required under U.S.

On December 15, 2022, the PCAOB announced its completion of inspections and investigations of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong in 2022.

The SOP Agreements established a specific, accountable framework to

make possible complete inspections and investigations by the PCAOB of audit firms based in mainland China and Hong Kong, as required under U.S.

On December 15, 2022, the PCAOB announced its completion of inspections and investigations of PCAOB-registered public accounting firms headquartered in mainland China and

Hong Kong in 2022.

Accordingly, the PCAOB vacated its Determination Report.

As a result, we do not expect to be identified as a “Commission-Identified Issuer” under the HFCAA for the fiscal year ended December 31, 2022, after we file our annual report on Form 10-K

for such fiscal year.

However, whether the PCAOB will continue to conduct inspections and investigations of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong completely to its satisfaction is subject to

uncertainty and depends on several factors out of our, and our auditor’s, control.

As a result, we do not expect to be identified as a “Commission-Identified Issuer” under the HFCAA for the fiscal year ended December 31, 2022, after we file our annual

report on Form 10-K for such fiscal year.

is subject to uncertainty and depends on several factors out of our, and our auditor’s, control.

Such factors include positions taken by authorities of the PRC.

We expect the PCAOB will continue to demand complete access to inspections and investigations to

accounting firms headquartered in mainland China and Hong Kong in the future and the PCAOB has stated that it has made plans to resume regular inspections in early 2023 and beyond.

Under the HFCAA, the PCAOB is required to make its determination on an annual basis with regards to its ability to fully inspect and investigate accounting firms based in mainland China and Hong

We expect the PCAOB will continue to demand complete access to inspections and

investigations to accounting firms headquartered in mainland China and Hong Kong in the future and the PCAOB has stated that it has made plans to resume regular inspections in early 2023 and beyond.

Under the HFCAA, the PCAOB is required to make its determination on an annual basis with regards to its ability to fully inspect and investigate accounting firms based in

mainland China and Hong Kong.

The possibility of being a “Commission-Identified Issuer” under the HFCAA and risk of delisting could continue to adversely affect the trading price of our securities.

Should the PCAOB again encounter impediments to inspections and

investigations in mainland China or Hong Kong as a result of positions taken by any authority in either jurisdiction, the PCAOB will issue new determinations under the HFCAA as and when appropriate.

Our current auditor, Guangzhou Good Faith CPA LTD (“Good Faith”,), the independent registered public accounting firm that issues the audit report included in this

Should the PCAOB again encounter impediments to

inspections and investigations in mainland China or Hong Kong as a result of positions taken by any authority in either jurisdiction, the PCAOB will issue new determinations under the HFCAA as and when appropriate.

Our current auditor, GGF CPA LTD (“GGF”), (fka Guangzhou Good Faith CPA LTD), the independent registered public accounting firm that issues the audit report included in this

annual report on Form 10-K, as a firm registered with the PCAOB (PCAOB ID:2729), is subject to laws in the U.S.

pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.

Faith, whose audit report is included in this report, is headquartered in Guangzhou, China.

While our auditor is based in the PRC and is registered with PCAOB and subject to PCAOB inspection, in the event it is later determined that the

PCAOB is unable to inspect or investigate completely the Company’s auditor because of a position taken by an authority in a foreign jurisdiction, then such lack of inspection could cause trading of our securities to be prohibited under the HFCA

Act, and ultimately result in a determination by a securities exchange to delist the Company’s securities.

The PCAOB continues to demand complete access in mainland China and Hong Kong moving forward and is making plans to resume regular

inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations as needed.

The PCAOB has also indicated that it will act immediately to consider the need to issue new determinations

with the HFCA Act, if needed.

whose audit report is included in this report, is headquartered in Guangzhou, China.

While our auditor is based in the PRC and is registered with PCAOB and subject to PCAOB inspection, in the event it is later determined that the PCAOB is unable

to inspect or investigate completely the Company’s auditor because of a position taken by an authority in a foreign jurisdiction, then such lack of inspection could cause trading of our securities to be prohibited under the HFCA Act, and

ultimately result in a determination by a securities exchange to delist the Company’s securities.

The PCAOB continues to demand complete access in mainland China and Hong Kong moving forward and resumed regular inspections in 2023 and beyond, as

well as to continue pursuing ongoing investigations and initiate new investigations as needed.

The PCAOB has also indicated that it will act immediately to consider the need to issue new determinations with the HFCA Act, if needed.

Transfers of Cash to and from Our Subsidiaries

Cash transfers through the Company since inception are primarily attributed to:

1) capital contribution from the Cenntro Electric Group Limited (“CEGL”) to its

1) capital contribution from CEGL to its subsidiaries;

2) shareholder loans from CEGL to its

subsidiaries;

2) shareholder loans from CEGL to its subsidiaries;

or 3) payment from one group company to another through intercompany transactions.

During the year ended December 31, 2022, the total material cash transfer of other assets

within the organization was approximately USD 44.5 million.

The transfer consisted of approximately $12.0 million loan from CEGL, to Cenntro Automotive Group Limited, a wholly owned Hong Kong subsidiary (“CAGHK"), and approximately $7.0 million

loan to Cenntro Automotive Corporation, a wholly owned Delaware subsidiary (“CAC”).

There was no cash amount transferred from the operating subsidiaries to the holding companies during the year 2022 in

the form of loans, advances, or dividends.

As of the date of this filing, none of our operating subsidiaries have made any dividend or distributions to the holding company or through the intermediate

holding companies, or to investors including U.S.

During the year ended December 31, 2023, the total material cash transfer of other assets within the organization was approximately USD$23 million.

The transfer consisted of approximately $15.0 million loan from CEGL, to Cenntro Electric Group Inc., a wholly owned Delaware subsidiary ("CEGI)"), and approximately $8.0 million loan to Cenntro Automotive Corporation, a wholly owned Delaware

subsidiary ("CAC").

There was no cash amount transferred from the operating subsidiaries to the holding companies during the year 2023 in the form of advances, dividends, or other assets.

As of the date of this report, none of our operating

subsidiaries have made any dividend or distributions to the holding company or through the intermediate holding companies, or to investors including U.S.

Our subsidiaries are permitted to pay dividends to us only out of their accumulated profits.

Additionally, each of our subsidiaries in the PRC must make appropriations from

after-tax profit to a statutory surplus reserve fund.

The reserve fund requires an annual appropriation of 10% of after-tax profit (determined under accounting principles generally accepted in the PRC at each year-end) after offsetting

accumulated losses from prior years until such reserve reaches 50% of the subsidiary’s registered capital.

The reserve fund can only be used to increase the registered capital and eliminate further losses of the respective companies under PRC

Additionally, each of

our subsidiaries in the PRC must make appropriations from after-tax profit to a statutory surplus reserve fund.

The reserve fund requires an annual appropriation of 10% of after-tax profit (determined under accounting principles generally

accepted in the PRC at each year-end) after offsetting accumulated losses from prior years until such reserve reaches 50% of the subsidiary’s registered capital.

The reserve fund can only be used to increase the registered capital and eliminate

further losses of the respective companies under PRC regulations.

These reserves are not distributable as cash dividends, loans or advances.

A PRC company cannot distribute any profits until any losses from the prior fiscal years have been offset.

Profits retained from prior fiscal years may be

distributed together with distributable profits from the current fiscal year.

Total restrictions placed on the distribution of the Company’s PRC subsidiaries’ net assets were approximately $71.6 million, or 35.7% of the Company’s total

consolidated net assets as of December 31, 2022.

A PRC company cannot distribute any profits until any losses from the prior fiscal years have been

Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year.

Total restrictions placed on the distribution of the Company’s PRC subsidiaries’ net assets were approximately

$66.6 million, or 54.6% of the Company’s total consolidated net assets as of December 31, 2023.

In addition, under the regulations of the State Administration of Foreign Exchange of the PRC (“SAFE”), Renminbi is not convertible into foreign currencies for capital

account items, such as loans, repatriation of investments, and investments outside of China, unless the prior approval of the SAFE is obtained and prior registration with the SAFE is made.

The EV Market

The ECV Market

According to a January 2022 report by Allied Market Research, the global EV market was valued at approximately $163.01 billion in 2020 and is projected to reach approximately

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regulations toward vehicle emissions are expected to drive the growth of the electric vehicle market.

Many governments around the world, including the United States, China, Germany, and various other European countries, are regulating vehicle emissions and fuel

economy standards and offering incentives to commercial and government operators to purchase more energy efficient vehicles.

The mitigation of greenhouse gas emissions from ICE vehicles is an integral part of various nations’ strategies to meet

the objectives of the 2015 Paris Agreement, which the United States rejoined in February 2021.

According to Statista, in 2024 the ECV market is projected to reach revenues of US$623.3bn globally.

Statista projects that it is expected the

ECV market will demonstrate a steady annual growth rate (CAGR 2024-2028) of 9.82% and projected market volume of US$906.7bn by 2028.

Many governments around the world, including the United States, China, Germany, and various other European countries, are regulating vehicle emissions and fuel economy

standards and offering incentives to commercial and government operators to purchase more energy efficient vehicles.

The mitigation of greenhouse gas emissions from ICE vehicles is an integral part of various nations’ strategies to meet the

objectives of the 2015 Paris Agreement, which the United States rejoined in February 2021.

As of the date of this report, over 25 countries have made announcements regarding their intention to phase out ICE vehicles include the following:

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Ban the sale of new ICE cars starting in 2030.

In the United States, the Biden administration announced plans to put the United States on a path to achieve net-zero emissions,

economy-wide, by no later than 2050.

Several states in the United States have also announced the ban of new ICE vehicles including California by 2030 and New York by 2035.

In 2021, President Biden signed

an executive order that mandates the replacement of all civilian federal vehicles, over 600,000 vehicles, with U.S.-made clean and zero-emission vans, trucks and passenger vehicles.

The Biden administration has also announced a goal of building

more than 500,000 EV chargers across the United States and has expressed its support for an expansion of federal tax credits and incentives targeted at EVs and EV manufacturing.

In August 2021, the Biden Administration announced that it had set

the goal for half of all new vehicles to be electric by 2030, as part of a plan that also includes construction of a nationwide network of charging stations and various financial incentives to consumers and auto industry companies.

2021, President Biden signed the $1.2 trillion bipartisan infrastructure bill into law, which bill includes $7.5 billion for electric vehicle charging infrastructure, $3 billion to support the domestic battery material processing industry and $3

billion to support the development of domestic battery manufacturing and recycling facilities.

We believe the Biden administration’s strong support for EVs and renewables will encourage an even more rapid shift from ICEs to EVs in the United

States, particularly in the commercial vehicle market.

In the United States, the Biden administration announced plans to put the United States on a path to achieve net-zero emissions, economy-wide, by no later than 2050.

states in the United States have also announced the ban of new ICE vehicles including California by 2030 and New York by 2035.

In 2021, President Biden signed an executive order that mandates the

replacement of all civilian federal vehicles, over 600,000 vehicles, with U.S.-made clean and zero-emission vans, trucks and passenger vehicles.

The Biden administration has also announced a goal of building more than 500,000 EV chargers across

the United States and has expressed its support for an expansion of federal tax credits and incentives targeted at EVs and EV manufacturing.

In August 2021, the Biden Administration announced that it had set the goal for half of all new vehicles

to be electric by 2030, as part of a plan that also includes construction of a nationwide network of charging stations and various financial incentives to consumers and auto industry companies.

In November 2021, President Biden signed the $1.2

trillion bipartisan infrastructure bill into law, which bill includes $7.5 billion for electric vehicle charging infrastructure, $3 billion to support the domestic battery material processing industry and $3 billion to support the development of

domestic battery manufacturing and recycling facilities.

We believe the Biden administration’s strong support for ECVs and renewables will encourage an even more rapid shift from ICEs to ECVs in the United States, particularly in the commercial

vehicle market.

In August 2022, the Inflation reduction Act was signed into law marking the most significant action the U.S.

Congress has taken to invest in clean energy and climate change.

The Inflation

Reduction Act, among other actions includes a federal tax credit for up to 30% of the sales price for commercial EVs.

The Inflation Reduction Act also allocates significant incentive funds under the Diesel Emission Reduction Act program for use

in the commercial EV market.

The Inflation Reduction Act, among other actions

includes a federal tax credit for up to 30% of the sales price for commercial ECVs.

The Inflation Reduction Act also allocates significant incentive funds under the Diesel Emission Reduction Act program for use in the commercial EV market.

Further, in February 2023, the Biden Administration announced the latest set of actions aimed at further enhancing the U.S.

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Incentive programs and new regulations affecting passenger and commercial vehicles vary by country.

However, there is strong sentiment to reduce global greenhouse gas emissions

from leading governments.

However, there is strong sentiment to reduce global greenhouse gas

emissions from leading governments.

For heavy-duty vehicles, the European Union mandated a 15% reduction in CO2 emissions (from 2019 levels) by 2025 and a 30% reduction target (from 2019 levels) by 2030.

Also, by 2025, manufacturers will be required to

ensure that at least a 2% market share of the sales of new vehicles is made up of zero-and-low-emission vehicles to counteract steadily increasing road traffic emissions.

For light-duty vehicles, the European Union has mandated a 15% reduction in

CO2 emissions by 2025 and a 31% reduction target by 2030.

The European Union may impose financial penalties on vehicle manufacturers for failure to achieve certain CO2 emission targets imposed on such manufacturers, with such penalties scaling

upward based on the level of CO2 emission exceedance for their vehicles.

We believe that increasing government regulations and incentives, together with shifting consumer preferences, will encourage significant growth in the market for ECVs.

Also, by 2025, manufacturers will be

required to ensure that at least a 2% market share of the sales of new vehicles is made up of zero-and-low-emission vehicles to counteract steadily increasing road traffic emissions.

For light-duty vehicles, the European Union has mandated a 15%

reduction in CO2 emissions by 2025 and a 31% reduction target by 2030.

The European Union may impose financial penalties on vehicle manufacturers for failure to achieve certain CO2 emission targets imposed on such manufacturers, with such

penalties scaling upward based on the level of CO2 emission exceedance for their vehicles.

We believe that increasing government regulations and incentives, together with shifting consumer preferences, will encourage significant growth in the

market for ECVs.

Last-mile Delivery and City Services

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applications.

As of the date of this report, we offer seven series of commercial vehicle models that are ready to be sold on the global markets.

As of the date of this report, we offer six series of commercial vehicle models that are ready to be sold on the global markets apart from Logimax™.

The Metro® is a customizable ECV used in commercial applications such as city services (i.e., street cleaners, firetrucks and garbage trucks) and last-mile delivery.

was “born electric,” meaning that, unlike many other ECVs that are converted from existing ICE designs, the Metro® was purpose-built from inception to be highly energy efficient and providing for a greater range, implementing a number of

Metro® was “born electric,” meaning that, unlike many other ECVs that are converted from existing ICE designs, the Metro® was purpose-built from inception to be highly energy efficient and providing for a greater range, implementing a number of

proprietary design elements, including a lightweight structure and efficient power system.

The Metro® chassis is designed with a unique cab-forward feature.

By moving the cab of the Metro® forward over the front wheels, we have been able to increase its cargo volume

ratio and decrease the cost of materials used in its manufacturing.

By moving the cab of the Metro® forward over the front wheels, we have been able to increase its cargo

volume ratio and decrease the cost of materials used in its manufacturing.

In addition, the chassis of the Metro® has been designed to support a variety of fittings, allowing the vehicle to be used for a number of different applications, which we

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Our modular vehicle design enables us to manufacture a wide range of variations of Metro® models around a uniform chassis

The Metro® complies with all applicable vehicle safety standards related to light-duty commercial vehicles in North America and the Asian and European countries in which it is

The Metro® complies with all applicable vehicle safety standards related to light-duty commercial vehicles in North America and the Asian and European countries in which it

The Metro® has passed N1 homologation requirements in Asia.

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Logistar™ Series are the vehicles for on-road applications with the gross vehicle weight rate (“GVWR”) under 19,500 lbs.

It consists of Logistar 100 (LS100), Logistar 200 (LS200),

Logistar 260 (LS260), Logistar 300 (LS300), and Logistar 400 (LS400).

It consists of Logistar 100 (LS100), Logistar 200

(LS200), Logistar 260 (LS260), Logistar 300 (LS300), and Logistar 400 (LS400).

LS100, LS200, and LS260 meet with European Union regulatory requirement and are mainly targeted for European markets, and LS300 and LS400 meet with U.S.

regulatory requirements

and are mainly targeted for North American markets.

requirements and are mainly targeted for North American markets.

The Logistar™ 400 is a medium-duty electric commercial truck designed to meet the delivery requirements of tier 1 logistics companies as well as upfitters.

The Logistar™ 400 is a

The Logistar™ 400

Class 4 (over 14,000 lbs.) truck under U.S.

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It can be configured as a delivery van or a shuttle bus or equipped with a cargo box or a truck bed.

In addition, the Logistar™ 400 can be upfitted for different applications

of city service, such as a vending truck, fire truck, garbage truck and repair truck.

In addition, the Logistar™ 400 can be upfitted for different

applications of city service, such as a vending truck, fire truck, garbage truck and repair truck.

We expect that the most common use of the Logistar™ 400 will be for intra-city delivery.

The Logistar™ 400 has a cargo volume that is over three times the cargo

volume of the Metro® and a payload capacity more than seven times the payload capacity of the Metro®.

The Logistar™ 400 has a cargo volume that is over three

times the cargo volume of the Metro® and a payload capacity more than seven times the payload capacity of the Metro®.

As of the date of this report, the homologation status of the Logistar™ 400 has been completed.

On June 23, we received certification for our

LS400 by the California Air Resources Board (“CARB”) as a zero-emission vehicle in the state of California.

The certification is awarded to vehicle manufacturers who meet specific emissions standards in compliance with California Air Resources

Board (“CARB”) regulations.

On June 23, we received

certification for our LS400 by the California Air Resources Board (“CARB”) as a zero-emission vehicle in the state of California.

The certification is awarded to vehicle manufacturers who meet specific emissions standards in compliance with

California Air Resources Board (“CARB”) regulations.

In December 2022, the LS400 previously received its certificate of conformity from the United States Environmental Protection Agency (“EPA”).

Because we received credentials from both CARB and the EPA, we can now sell

our LS400 in every state throughout the U.S.

Because we received credentials from both CARB and

the EPA, we can now sell our LS400 in every state throughout the U.S.

In December 2023, the LS400 received approval from the California Air Resources Board (“CARB”) to participate in California’s Hybrid and Zero-Emission Truck and Bus Voucher

Incentive Project (“HVIP”) in the state of California, providing a $60,000 point-of-sale voucher for the Company’s customers.

The LS400’s certification as a zero-emission vehicle cleared the way for the LS400 to be approved for participation in

The approval to participate in the HVIP program is awarded to vehicle manufacturers, like Cenntro, that meet specific on-road zero-emission powertrain standards in

compliance with CARB regulations.

California’s HVIP incentive program is intended to advance adoption and commercialization of fleet vehicles, helping to reduce the total cost of ownership of hybrid and zero-emission commercial vehicles in the

state of California.

We have also designed the Logistar™ 200, a multi-purpose vehicle customized for transporting light goods specifically for the EU market.

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(i) as a van, (ii) as a flat-bed truck, and (iii) as a cargo truck.

of the three models is specialized for last-mile delivery, city delivery and city services.

We completed homologation of the Logistar™ 200 in the European Union in January 2022 and it is commercially available in the EU market, and countries

that adopt EU vehicle homologations.

The Logistar ™ 260, or LS 260, is positioned above the Logistar 200

and defines a new size in the van segment.

With dimensions of 5.50 meters long, 1.85 meters wide and a height of 2 meters, the LS 260 offers a cargo space of 7.5 cubic meters or 265 cubic feet, two side loading doors and convenient rear doors

with a loading opening of up to 270°.

The load volume, payload and range of the Logistar™ 260 will be targeted for a wide range of applications in the trades, couriers, express and parcel services, logistics solutions, and facility

As of the date of this report, the LS 260 passed all homologation tests in accordance with European Union (EU) standards and requirements and receive EU type approval.

E ach of the three models is specialized for last-mile delivery, city delivery and city services.

We completed homologation of the Logistar™ 200 in the European Union in January 2022 and it is commercially available in the EU

market, and countries that adopt EU vehicle homologations.

The Logistar ™ 260, or LS 260, is positioned above the Logistar 200 and

defines a new size in the van segment.

With dimensions of 5.50 meters long, 1.85 meters wide and a height of 2 meters, the LS 260 offers a cargo space of 7.5 cubic meters or 265 cubic feet, two side loading doors and convenient rear doors with

a loading opening of up to 270°.

The load volume, payload and range of the Logistar™ 260 will be targeted for a wide range of applications in the trades, couriers, express and parcel services, logistics solutions, and facility management.

of the date of this report, the LS 260 passed all homologation tests in accordance with European Union (EU) standards and requirements and receive EU type approval.

The Logistar™ 100, or LS 100, is a versatile, compact light cargo van purpose-built to serve diverse commercial applications, especially in population-dense urban areas.

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(525 kg) of payload, and a cargo capacity of 73.3 cubic feet (2 cubic meters).

The combination of its cargo space and multiple entry points at the side and rear of the

vehicle makes the LS100 ideal for multiple applications, including package delivery, trade and maintenance services, hospitality, and catering.

The LS100 completed all homologation tests in compliance with the standards and requirements of the

European Union (EU) in July and received type approval from the EU in August.

As a result, and as of the date of this report, the LS100 is eligible for sale in all 27 EU member states and other countries that adopt EU vehicle homologation

The combination of its cargo space and multiple entry points at the side and rear of the vehicle

makes the LS100 ideal for multiple applications, including package delivery, trade and maintenance services, hospitality, and catering.

The LS100 completed all homologation tests in compliance with the standards and requirements of the European

Union (EU) in July and received type approval from the EU in August.

As a result, and as of the date of this report, the LS100 is eligible for sale in all 27 EU member states and other countries that adopt EU vehicle homologation standards.

In January 2023, we introduced the Logistar™ 300 (LS300) in a full-size van segment.

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There are two vehicle models within this series which include:

the LogiMax 800 (LM800) and

LogiMax 864H (LM864H).

the LogiMax 800 (LM800)

and LogiMax 864H (LM864H).

The LM800 is powered by electricity while the LM864H is hybrid model powered either by electricity or hydrogen.

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The LogiMax 864M (LM864H) is a 6x4 semi-tractor hydrogen fuel cells.

The LMH864 has a total weight of 25 tons and is

designed for short- and long-haul applications.

The semi-tractor’s electric motors are fully powered by high-efficiency sustainable hydrogen fuel cells with eight 210-liter banks that convert hydrogen into electric power by combining it with

oxygen, producing only water as byproduct.

Additionally, the LMH864 has an operational range and refueling time comparable to many diesel trucks making it suitable for longer distances and heavy, energy-intensive responsibilities in areas

where battery charging is limited.

The LMH864 represents an additional zero emissions product choice from Cenntro that is performance-heavy despite also being a sustainable vehicle.

As of the date of this report, we expect the LMH864 to be

available for commercial use in late 2023 pending homologation.

As of the date of this report, we intend to launch initial sales of the LM864H in North America and Europe.

The LMH864 has a total weight of 25 tons and is designed for short- and long-haul applications.

semi-tractor’s electric motors are fully powered by high-efficiency sustainable hydrogen fuel cells with eight 210-liter banks that convert hydrogen into electric power by combining it with oxygen, producing only water as byproduct.

Additionally,

the LMH864 has an operational range and refueling time comparable to many diesel trucks making it suitable for longer distances and heavy, energy-intensive responsibilities in areas where battery charging is limited.

The LMH864 prototype model

represents an additional zero emissions product choice from Cenntro that is performance-heavy despite also being a sustainable vehicle.

Teemak™ Series

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It is especially designed for- and useful in-narrow city streets and pedestrian zones.

unique selling proposition for the Antic One compared to other vehicles is, that the Antic One is a cargo-bike.

Thus, no driver’s license is required to operate it and the Antic One is permitted to use bike lanes, what makes the vehicle

particularly agile in dense city centers.

One unique selling

proposition for the Antic One compared to other vehicles is, that the Antic One is a cargo-bike.

Thus, no driver’s license is required to operate it and the Antic One is permitted to use bike lanes, what makes the vehicle particularly agile in

dense city centers.

Another advantage includes the Antic One’s exchangeable batteries.

A battery-swap for the Antic One takes less than a minute and each swap enables the driver to ride for approximately 50 km.

other cargo bikes the Antric One has a robust construction, cargo volume and payload (>2m 3 volume,

270kg payload in the container).

Compared to other cargo bikes the

Antric One has a robust construction, cargo volume and payload (>2m 3 volume, 270kg payload in the container).

The production for Antic One began in November 2022.

By August 2023 we estimate the production of the advanced version of the Antric One will commence.

We intend for the advanced version to be less expensive to

produce while maintaining its high quality.

We intend to include new features to this second generation Antic One that will make riding easier and more comfortable.

The production of our advanced version of the Antric One commenced in February 2024.

We anticipate the advanced version of the Antric One to be less expensive to produce while maintaining its high quality.

We intend to include new features to

this second generation Antic One that will make riding easier and more comfortable.

Cenntro iChassis™

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chassis to be driven autonomously.

We sold three iChassis in 2022.

We sold 303 iChassis in 2023.

Our Product Development and Manufacturing Process

Our capability of vehicle development is at the core of what we believe positions us to effectively compete in the ECV market.

Since inception in 2013 through

December 31, 2022, we have spent approximately $ 81.5 million in research and development activities related to our operations, developing various technologies and products, including the following:

Since inception in 2013 through December 31,

2023, we have spent approximately USD$90 million in research and development activities related to our operations, developing various technologies and products, including the following:

Vehicle Development

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We have developed level 2 AC chargers (7kw/10kw) and level 3 DC chargers (120kw), which have received EU CE and US ETL certificates.

These chargers will support the charge of the

vehicles that we sell to our customers as well as the vehicles that are made by other auto manufacturers as long as they meet the EU (Mennekes/CCS2) and USA (J1772/CCS1) standards.

These chargers will support the charge of

the vehicles that we sell to our customers as well as the vehicles that are made by other auto manufacturers as long as they meet the EU (Mennekes/CCS2) and USA (J1772/CCS1) standards.

Electric vehicle chargers are essential for ECV users to charge their ECV for daily use.

Many ECV users require to install their own charging stations instead of relying on public

charge stations.

Many ECV users require to install their own charging stations instead of relying on

public charge stations.

It would be more convenient and more practical if our customers could purchase their vehicle chargers directly from us when they buy ECVs from us.

It will be guaranteed that the charger will work with our vehicle seamlessly.

It will be guaranteed that the charger will work with our vehicle

Manufacturing

We have established an asset-light manufacturing business model under both a distributed manufacturing model and original equipment manufacturing (“OEM”) model.

Our distributed

manufacturing model focuses on the production of semi-knock down vehicle kits from our centralized manufacturing facilities which are then distributed for local final assembly.

Alternatively, we work with tier-one automakers under our OEM model

who produce completed vehicles for us that meet our design and specifications.

Under our distributed manufacturing model, some of our vehicle models have a modular design that allows for local assembly in small factory facilities which require less capital

distributed manufacturing model focuses on the production of semi-knock down vehicle kits from our centralized manufacturing facilities which are then distributed for local final assembly.

Alternatively, we work with tier-one automakers under our

OEM model who produce completed vehicles for us that meet our design and specifications.

Under our distributed manufacturing model, some of our vehicle models have a modular design that allows for local assembly in small factory facilities which require less

capital investment.

We manufacture our own vehicle kits in our facilities in China where we leverage the economies of scale coupled with our matured supply-chain to efficiently manufacture vehicle kits.

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In some cases, we provide technology and vehicle modules to the OEM contractors.

We believe our distributed manufacturing and OEM manufacturing methodologies 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.

As of the date of this report, we have established and built six manufacturing and assembly facilities, Jacksonville and Freehold in United States, Changxing and Yangzhong in

China, Herne in Germany, and Monterrey in Mexico.

We believe our distributed manufacturing and OEM manufacturing methodologies 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.

As of the date of this report, we have established and built seven manufacturing and/or assembly facilities, in Jacksonville, Florida, Ontario, California and Freehold, New

Jersey in the United States, Changxing and Yangzhong in China, Herne in Germany, and Monterrey in Mexico.

Our Distribution and Service Infrastructure

Up until approximately December 31, 2021, we outsourced the vast majority of the marketing and sales of our vehicles to third party “channel partners” and relied substantially on

private label channel partners to assemble the ECVs from vehicle kits that we manufactured in our China-based facilities.

Our relationships with such third parties, our “channel partners,” have allowed us to forego expensive capital investments

in our own facilities and operate within our historic working capital limitations.

We believe a wholly owned distribution and service infrastructure is very important to an automobile manufacturer, and we have decided to build our own

distribution and service infrastructure after we secured sufficient capital from the last reversed merging transaction.

We are currently in the process of establishing our own distribution and service infrastructure.

To do so, we have invested in our own distribution and service infrastructure network which consists of regional electric vehicle centers (“EV Centers”), local dealers, and local

We have established our distribution and service infrastructure, which consists of our wholly owned local Electric Vehicle Centers (“EV Centers”), local dealer networks,

parts fulfillment centers, and local service providers.

We continuously develop, expand, and improve our distribution and service infrastructure.

We believe that having a good and capable distribution and service infrastructure is essential for

our business.

We have invested many resources to build this distribution and service infrastructure.

We believe a wholly owned distribution and service infrastructure is important to an automobile manufacturer like us.

To that end, we have

decided to build our own distribution and service infrastructure after we secured sufficient capital to do so.

We distribute and sell our products directly by our corporate sales department or by our local EV Centers.

We also distribute and sell our products through our local dealer

networks in Europe and in the United States, which are developed by our local EV Centers.

We provide our services through our local EV centers, our local dealers, or our local service providers.

To support our local service providers or dealers, our local EV

centers provide training and support to our local dealers and local service providers.

To distribute parts for vehicle maintenance, repair, and warranty handling, we have setup two parts fulfillment centers, one in Dusseldorf, Germany and on in Freehold, New

Jersey in the United States.

Up on the order or request from local dealer or service provider, our central parts warehouse in China or our local parts fulfillment centers will fulfill orders or requests and delivery the parts to local dealers or

service providers.

Our regional EV Centers are Cenntro wholly-owned subsidiaries, which sign up local dealers and service providers to become Cenntro dealers and Cenntro service providers.

By establishing these local dealers and service networks

regionally around our EV Centers, we will more seamlessly handle local sales and provide local services.

Aside from developing local dealers and service providers and maintaining good relationships with them, our regional EV Center will also

handle regional corporate users, such as national fleets.

As of December 31, 2022, we have established seven EV Centers in Dusseldorf, Germany, Barcelona, Spain, Casablanca, Morocco, Hangzhou, China, Santo Domingo, Dominican Republic,

Jacksonville and Freehold, USA.

Our local EV Centers are an essential part of our distribution and service infrastructure and they are Cenntro wholly owned subsidiaries, which sign up local dealers and

service providers to become Cenntro dealers and Cenntro service providers.

By establishing these local dealers and service networks regionally around our EV Centers, we believe we can more seamlessly handle local sales and provide local services.

Aside from developing local dealers and service providers and maintaining good relationships with them, our local EV Center will also handle local corporate users, such as national fleets.

As of December 31, 2023, we have established eleven EV

Centers in Dusseldorf, Germany, Warsaw, Poland, Budapest, Hungary, Istanbul, Turkey, Barcelona, Spain, Casablanca, Morocco, Hangzhou, China, Santo Domingo, Dominican Republic, and Jacksonville, Florida and Freehold, New Jersey in the United

Our Parts Distribution System (“PARDISYS”)

We believe an effective and efficient parts distribution system is important for vehicle after-market support and customer satisfaction.

Therefore, we have invested resources

and are in processing of building a cloud-based parts distribution system.

This cloud-based parts distribution system will allow us to provide and timely deliver our spare parts to our service providers and customers globally.

The cloud-based

system will also keep our parts inventory leaner and more responsive in order to better manage our working capital more efficiently.

In order to satisfy that goal, we established two production-side parts warehouse in Changxing, China and Yangzhong, China which store our produced parts that can be locally

We have invested resources into our cloud-based parts distribution system because we believe an effective and efficient parts distribution system is important for vehicle

after-market support and customer satisfaction.

Through our cloud-based parts distribution system we globally provide and timely deliver spare-parts to our service providers and customers.

The cloud-based system also keeps our parts inventory

leaner and more responsive to better manage our working capital more efficiently.

In order to satisfy that goal, we established two production-side parts warehouses in Changxing, China and Yangzhong, China which store our produced parts that can be locally

sourced on a global scale.

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send certain parts from production-site warehouses to remote warehouses for quicker local delivery.

As of December 31, 2022, we have established four remote parts warehouses in Dusseldorf in Germany, Barcelona in Spain, and Freehold, New Jersey

and Jacksonville, Florida.

As of December 31, 2022, we have established two spare-parts fulfillment warehouses in Dusseldorf in Germany, and Freehold, New Jersey.

Our Battery Technology and Production

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technological investments needed to extend the range and safety of EV operation.

To that end, we have developed technology for an advanced lithium iron phosphate (“LFP”) battery that will be safer while lowering overall cost, and providing a longer battery

To that end, we have developed technology for an advanced lithium iron phosphate (“LFP”) battery that will be safer while lowering overall cost, and providing a longer

battery life.

Our advanced LFP battery technology will provide EVs a large power output that is fast charging without causing damage the battery.

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third-party equipment designer and manufacture from China to our specifications.

We have established a battery manufacturing facility in Monterrey, Mexico to produce our advanced LFP battery, and as of the date of this report, we are waiting for the

installation of purposely built production lines.

We have leased a newly constructed battery manufacturing facility in Monterrey, Mexico to produce our advanced LFP battery for our ECVs and energy storage applications.

the date of this report, the manufacturing and acquisition of our production equipment is complete and production equipment has been shipped to the Monterrey facility.

We expect our production line installation to be installed in quarter two of

Sales and Marketing

We believe that the quality and reputation of our products and our distribution and service infrastructure will support the company’s goals to retain and attract new customers.

We distribute and sell our products to our end-customers through o ur wholly-owned EV Centers and through our network of Cenntro dealers and

distributors.

Previously, Cenntro sold its products through a channel partner network which enabled each partner to distribute products under respective private labels.

While this model offered benefits of

leveraging sales through each partners customer network;

are partners ‘white labeled’ our vehicles which diluted our brand value and placed too much of Cenntro’s reliance in each channel partner’s ability to conduct marketing in order to

With the expansion of our product lines, our ECV distribution model required a shift from strict reliance on channel partners to a hybrid model that utilizes both select channel partners and combines direct sales with established

regional dealers and branded EV Centers

We believe that the quality and reputation of our products and our distribution and service infrastructure will support the company’s goals to retain and attract new

We distribute and sell our products to our end-customers through our wholly-owned EV Centers and through our network of Cenntro dealers and distributors.

Previously, Cenntro

sold its products through a channel partner network which enabled each partner to distribute products under respective private labels.

While this model offered benefits of leveraging sales through each partners customer network;

‘white labeled’ our vehicles which diluted our brand value and placed too much of Cenntro’s reliance in each channel partner’s ability to conduct marketing in order to drive sales.

With the expansion of our product lines, our ECV distribution

model required a shift from strict reliance on channel partners to a hybrid model that utilizes both select channel partners and combines direct sales with established regional dealers and branded EV Centers.

Under a strictly channel partner distribution model, we had little control over sales and quality.

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Further, Cenntro’s EV Centers work with well-established commercial vehicles dealers to build out and scale markets.

We believe this hybrid model will serve us and our customers to

improve customer satisfaction and enhance our brand recognition.

The Company’s distribution and service infrastructure also includes the development of a cloud-based parts distribution system as a global spare parts fulfillment

We believe this hybrid model will serve us and our

customers to improve customer satisfaction and enhance our brand recognition.

The Company’s distribution and service infrastructure also includes the development of a cloud-based parts distribution system as a global spare parts fulfillment system.

This system will enhance the after-sales spare parts support for our appointed service providers as well as our enterprise customers in servicing our commercial electric vehicles.

Over the past year, Cenntro has significantly scaled its EV Center growth.

In 2022, Cenntro has significantly scaled its EV Center growth.

In 2022 Cenntro added six EV Centers to our global

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We expect Cenntro’s EV centers will support our distribution and sales goals, better align our supply with demand, add capacity for scale, stability, and reduced logistics costs.

achieve our sales and marketing goals, Cenntro is leveraging advanced cloud-based distribution technologies to move parts through our centers efficiently and accurately to better serve our global customers.

As of the date of this report our nine EV Centers are located in Dusseldorf, Germany, Barcelona, Spain, Warsaw, Poland, Budapest, Hungary, Casablanca, Morocco, Istanbul, Turkey, Santo Domingo, Dominican Republic, Jacksonville,

Florida and Freehold, New Jersey.

our sales and marketing goals, Cenntro is leveraging advanced cloud-based distribution technologies to move parts through our centers efficiently and accurately to better serve our global customers.

of the date of this report our eleven EV Centers are located in Dusseldorf, Germany, Barcelona, Spain, Warsaw, Poland, Budapest, Hungary, Casablanca, Morocco, Istanbul, Turkey, Santo Domingo, Dominican Republic, Jacksonville, Florida, Costa

Mesa, California and Freehold, New Jersey.

In key strategic markets, including Japan, the Company has maintained channel partners relationships.

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In the long-term, through our deep supply chain development know-how, we plan to geographically expand our supply chain to support our planned growth.

More specifically, we intend

to establish supply chain relationships in North America and the European Union to support our manufacturing and assembly needs in these markets, thereby reducing the time in transit and potentially the duties associated with importing our

components and spare parts from China.

We believe we can reduce the overall cost of ECV assembly by shifting to a “merge in transit” model, whereby component shipments from suppliers, including local market suppliers, are consolidated at our

local assembly facilities for final ECV assembly.

More specifically, we intend to establish

supply chain relationships in North America and the European Union to support our manufacturing and assembly needs in these markets, thereby reducing the time in transit and potentially the duties associated with importing our components and

spare parts from China.

facilities for final ECV assembly.

Historically, we have generally obtained components from multiple sources whenever possible, similar to other automotive manufacturers.

However, a small number of components used

in our ECVs are purchased from a single-source, which we refer to as our single-source suppliers.

However, a small number of components

used in our ECVs are purchased from a single-source, which we refer to as our single-source suppliers.

For example, while several sources for the airbag module in the Metro® are available, we currently have only one supplier for this component.

generally do not maintain long-term agreements with our single-source suppliers.

We generally do not maintain long-term agreements with our single-source suppliers.

The vast majority of our components have alternative sources and we do not anticipate that finding qualified alternative sources for any particular component,

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For example, beginning in late 2020, the automotive industry has been subject to a shortage of semiconductors due to a spike in demand and a series of supply chain issues relating to COVID-19.

We are currently implementing an industry standard SAP Hana/R4 Enterprise Resource Planning and Parts Distribution (“ERP”)

system to replace our previous ERP system to be the Company’s global ERP operating platform.

The implementation is anticipated to be complete by the first quarter of 2024.

Our Growth Strategy

We intend to be a leading global designer, developer and manufacturer of a full range of ECVs from electric light models to and heavy-duty ECVs models.

The key elements of our

growth strategy include:

The key elements of

our growth strategy include:

To Expand Our Cenntro Branded Global Marketing sales and after-sales support network (i.e.

EV Centers) to replace Channel Partner Network in selected countries

EV Centers) to replace Channel Partner Network in selected

Until the end of 2021, we outsourced the majority of distribution and marketing for our vehicles to third party “channel partners”.

Similarly, we substantially relied on private

label channel partners to assemble the Metro® from vehicle kits that we manufactured in our China-based facilities.

While these relationships allowed the Company to forego expensive capital investments it significantly diluted our brand value and

left the Company fully reliant on third parties to scale markets for our ECVs.

Similarly, we substantially relied on

private label channel partners to assemble the Metro® from vehicle kits that we manufactured in our China-based facilities.

While these relationships allowed the Company to forego expensive capital investments it significantly diluted our brand

value and left the Company fully reliant on third parties to scale markets for our ECVs.

To further expand our market presence and control our growth we shifted our distribution strategy to our wholly owned and operated EV Centers.

In conjunction with the

introduction of our new ECV models, we believe operating our own EV Centers will improve brand awareness, effectively scale market penetration and better align product supply to meet demand.

Our EV Centers are established locally and provide for

local marketing, sales, technical and after-market parts support.

In conjunction

with the introduction of our new ECV models, we believe operating our own EV Centers will improve brand awareness, effectively scale market penetration and better align product supply to meet demand.

Our EV Centers are established locally and

provide for local marketing, sales, technical and after-market parts support.

Our regional EV Centers will also recruit and develop local dealers and service providers to support expansion of their local networks.

As a result of the implementation of this

new go-to-market model, in the first quarter of 2022, we terminated two channel partners in the United States.

In March 2023, we acquired 65% equity interest of TME and gained management controls of our largest channel partner in Europe based in

As a result of the

implementation of this new go-to-market model, in the first quarter of 2022, we terminated two channel partners in the United States.

In March 2022 and March 2023, we acquired 65% and further 35% equity interest of TME and gained complete

control of our largest channel partner in Europe based in Germany.

We rebranded TME to become Cenntro Automobile Europe (i.e.

During late 2021, Cenntro Automotive Corporation (“CAC”) began utilizing one of our two facilities in Freehold, New Jersey for the trial production of our Logistar™ 400 model.

also have established a European Operations Center in Dusseldorf, Germany, which provides marketing support, after-market support and spare-parts warehousing for the European market, as well as warehousing services with a logistics company in

Budapest, Hungary to house spare parts for our ECVs.

We established a local assembly facility in Jacksonville, Florida, where we plan to scale assembly of the Logistar™ 400, the Metro® and the Teemak™ for distribution in the North American

During late 2021, Cenntro Automotive Corporation (“CAC”) began utilizing one of our two facilities in Freehold, New Jersey for the trial production of our Logistar™ 400

We also have established a European Operations Center in Dusseldorf, Germany, which provides marketing support, after-market support and spare-parts warehousing for the European market, as well as warehousing services with a logistics

company in Budapest, Hungary to house spare parts for our ECVs.

We established a local assembly facility in Jacksonville, Florida, where we plan to scale assembly of the Logistar™ 400, the Metro® and the Teemak™ for distribution in the North

American market.

We believe maintaining a local assembly facility in Germany will provide us with access to well-established hardware and logistics systems and trained personnel.

We began trial assembly operations at the Jacksonville facility in March

We expect that our full acquisition of TME will allow us to expand local assembly capacity in the European Union for production of our EU ECV models, including the Logistar™ and the Metro® series.

We began trial assembly operations at the Jacksonville facility in

March 2023 and the Onterio facility in September 2023.

We expect that our full acquisition of CAE will allow us to expand local assembly capacity in the European Union for production some of our EU ECV models, including the Metro® series, Teemak®

During 2022, we began to establish a hybrid distribution model that combines our EV Centers, established dealers with select channel partners.

We believe that transitioning our

third-party reliant distribution model to a hybrid model will enhance brand recognition, provide economic advantages and reduce time to market for our ECVs.

During 2023, we established

eleven EV centers mainly in the US and the EU and cooperate with few channel partners in selected strategic markets, such as Japan in east-Asia.

We believe transitioning our third-party reliant distribution model to a hybrid model will provide

economic advantages and reduce time to market for our ECVs.

To Brand our Global Market Sales and After Sales Support Network via our EV Centers

Our manufacturing model has traditionally relied on developing supply chain relationships with component vendors and specifically through a network of third-party supply

From 2022 onwards we shifted our focus from solely investing in our own manufacturing capabilities to t a contract manufacturing strategy.

To this end, we work closely with proven tier one suppliers for components and parts in

order for the Company to utilize a less capital intensive path to product development.

Correspondingly, we also re-aligned our distribution model from a majority of channel partners and country importers to building our own branded local EV

Our regional EV Centers are wholly-owned subsidiaries that distribute, market, and sell parts in addition to providing after market support for Cenntro EVCs.

Our implementation strategy focuses on setting EV Centers in targeted local

regions to distribute our ECVs mainly through local dealer networks and value-added re-sellers.

Our EV Centers also develop local dealers and service their local networks.

to become Cenntro dealers and Cenntro service providers Aside from

developing local dealers and service providers while maintaining good relationships with them, Cenntro’s regional EV Centers manage regional strategic accounts, including national fleets.

We believe our strategy to manage and support our own EV Center distribution network will distinguish Cenntro from other traditional EV automakers and build a solid

distribution and service infrastructure in local markets.

From 2022 onwards we shifted our focus from solely investing in our own manufacturing capabilities to a contract manufacturing strategy.

To this end, we work closely with proven tier one suppliers for components and parts in order for

the Company to utilize a less capital intensive path to product development.

Correspondingly, we also re-aligned our distribution model from a majority of channel partners and country importers to building our own branded local EV Centers.

regional EV Centers are wholly-owned subsidiaries that distribute, market, and sell parts in addition to providing after market support for Cenntro EVCs.

Our implementation strategy focuses on setting EV Centers in targeted local regions to

distribute our ECVs mainly through local dealer networks and value-added re-sellers.

Our EV Centers also develop local dealers and service their local networks to become Cenntro dealers and Cenntro service providers.

Aside from developing local

dealers and service providers while maintaining good relationships with them, Cenntro’s regional EV Centers manage regional strategic accounts, including national fleets.

We believe our strategy to manage and support our own EV Center distribution network will distinguish Cenntro from other traditional EV automakers and build a

solid distribution and service infrastructure in local markets.

We believe this shift will enhance our market penetration, and ability to be more responsive to market feedback and customer input.

Local EV Centers will bolster our local presence in

sales markets to help Cenntro become perceived and associated with better products and while enhancing our ability to provide hands-on service.

As of the date of this report, our distribution and service infrastructure consists of four EV Centers in Europe, three EV Centers in North & Central America, one EV

Local EV Centers will bolster our local presence

in sales markets to help Cenntro become perceived and associated with better products and while enhancing our ability to provide hands-on service.

In the meantime, with the hybrid model, we also utilize

local channel partners with their existing sales and service capabilities for quicker market penetration and reduction on capital requirements.

This two-tier approach will achieve our sales control and building our own sales capability but also

benefit from channel partner’s existing sales capabilities.

As of the date of this report, our distribution and service infrastructure consist of four EV Centers in Europe, three EV Centers in North & Central America, one EV

Center in Turkey and one EV Center in Morocco.

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To Regionalize Manufacturing and Supply Chain

We plan to regionalize the manufacturing and supply chain relating to certain key components of our ECVs, such as vehicle frames and

battery packs, in the geographic markets in which our ECVs are sold.

We plan to regionalize the manufacturing and supply chain relating to certain key components of our ECVs, such as vehicle upfitting and battery packs, in the geographic

markets in which our ECVs are sold.

In the long-term, through our deep supply chain development know-how, we plan to geographically expand our supply chain to support our planned growth.

More specifically, we

intend to establish supply chain relationships in North America and the European Union to support our manufacturing and assembly needs in these markets, thereby reducing the time in transit and potentially the duties associated with importing our

components and spare parts from China.

We believe we can reduce the overall cost of ECV assembly in certain geographical markets by shifting to a “merge in transit” model, whereby component shipments from suppliers, including local market

suppliers, are consolidated at our local assembly facilities for final ECV assembly, in contrast with our current model which integrates all components into vehicle kits or fully assembled vehicles in our manufacturing facilities in China or our

manufacturing partners’ facilities.

More specifically, we intend to establish supply chain

relationships in North America and the European Union to support our manufacturing and assembly needs in these markets, thereby reducing the time in transit and potentially the duties associated with importing our components and spare parts from

local assembly facilities for final ECV assembly, in contrast with our current model which integrates all components into vehicle kits or fully assembled vehicles in our manufacturing facilities in China or our manufacturing partners’ facilities.

We believe that investing in the regionalization of our manufacturing and supply chain can ultimately provide significant benefits to us and our channel partners.

We believe sourcing our ECV components and

manufacturing, assembling and selling our ECVs regionally can help us reduce costs associated with import/export taxes and shipping, further reducing vehicle production costs.

In addition, we believe that regionalizing our manufacturing and

supply chain will help support and strengthen our brand in the markets in which our ECVs are sold, as our operations become integrated into those markets.

We believe that our deep supply chain development know-how will provide us significant

however, currently, substantially all of our supply chain experience is limited to China.

If we are unable to effectively manage the sourcing of our components and the responsiveness of our supply chain in areas outside of China, our

business and results of operations may be harmed.

We believe sourcing our ECV components and manufacturing, assembling and selling

our ECVs regionally can help us reduce costs associated with import/export taxes and shipping, further reducing vehicle production costs.

In addition, we believe that regionalizing our manufacturing and supply chain will help support and

strengthen our brand in the markets in which our ECVs are sold, as our operations become integrated into those markets.

We believe that our deep supply chain development know-how will provide us significant advantages;

however, currently,

substantially all of our supply chain experience is limited to China.

If we are unable to effectively manage the sourcing of our components and the responsiveness of our supply chain in areas outside of China, our business and results of

operations may be harmed.

It is also likely that in the early stages of our supply chain expansion, we can expect most component sources will be single-source suppliers in areas outside of China.

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To enhance vehicle after-market support and customer satisfaction, we believe an effective and efficient parts distribution system is important to develop.

For this purpose, we have invested

resources and as of the date of this report, are in the process of building-out a cloud-based automobile parts distribution system (“PARDISYS”).

This cloud-based automobile parts distribution system will allow us to more responsively provide and

timely deliver spare parts to our service providers and global customers while maintaining a well-managed minimum parts inventory.

For this purpose,

we have invested resources to build out a cloud-based automobile parts distribution system (“PARDISYS”).

This cloud-based automobile parts distribution system allows us to more responsively provide and timely deliver spare parts to our service

providers and global customers while maintaining a well-managed minimum parts inventory.

To use PARDISYS, our customers log in the cloud-based system to enquire and order the required spare parts.

The enquiry can be made by entering the name of

the part, part number, VIN number of the whole vehicle, among other search functions.

There are both fuzzy inquiries and precise inquiries for searching, which brings convenience to the customers.

Currently, parts, accessories and special repair

tools for all Cenntro vehicles can be ordered through the PARDISYS system, and the back-office will provide the optimal distribution plan according to the customer's delivery address and warehouse inventory.

PARDISYS consists of two source

warehouses - Changxing Warehouse and Zhenjiang Warehouse, and two fulfilment warehouses in New Jersey, United States and Düsseldorf, Germany.

The source warehouses distribute frequently used parts to the fulfilment warehouses, which ship them to

When parts inventory falls below the safety stock level, the fulfilment warehouses submit replenishment requests to the source warehouses to replenish the inventory to ensure the supply of frequently used parts.

Non-usable parts are

stored in the fulfilment warehouse and shipped directly to the customer when a customer order is placed.

As of the date of this report, we established two production site parts warehouse in Changxing, Zhejiang province and Yangzhong, Jiangsu province in China.

These warehouses store our parts that

are produced or sourced locally.

These warehouses

store our parts that are produced or sourced locally.

These warehouses can send the parts globally based on the orders from our website that customers can place globally.

Based on the local demand data, the system is expected to source certain parts from

production-site warehouses to a remote parts warehouse for quicker local delivery.

As of December 31, 2022, we established four remote parts warehouses in Dusseldorf, Germany, Barcelona, Spain, Freehold, New Jersey and Jacksonville, Florida.

Based on the local demand data, the system is expected to source certain

parts from production-site warehouses to a remote parts warehouse for quicker local delivery.

As of December 31, 2022, we established four remote parts warehouses in Dusseldorf, Germany, Barcelona, Spain, Freehold, New Jersey and Jacksonville,

To Expand Our Product Offerings

We began pilot production of our first-generation, U.S.

Class 1 (0 - 6,000 lbs.), light-duty commercial vehicle, the Metro®, in 2018, and, as of December 31, 2022, we have sold

more than 4,090 Metro® units throughout Europe, North America and Asia.

Class 1 (0 - 6,000 lbs.), light-duty commercial vehicle, the Metro®, in 2018, and, as of December 31, 2022, we have

sold more than 4,090 Metro® units throughout Europe, North America and Asia.

Utilizing our proprietary design and technology, we subsequently launched six EVCs including The Logistar™ 400 U.S.

Class 4 (over

14,000 lbs.) medium-duty commercial vehicle for North America.

The Logistar™ 200, designed to meet the European Union N1 Class truck requirements, the Neibor ® 150, designed to meet the European Union and

UK L7e Class requirements, in the European Union and the UK, in the European market, and the Teemak™, an off-road electric commercial vehicle.

(over 14,000 lbs.) medium-duty commercial vehicle for North America.

The Logistar™ 200, designed to meet the European Union N1 Class truck requirements, the Neibor ® 150, designed to meet the European

Union and UK L7e Class requirements, in the European Union and the UK, in the European market, and the Teemak™, an off-road electric commercial vehicle.

The Logistar 260, or LS 260, is positioned above the Logistar 200 and defines a new size in the van segment..

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The Logistar 100, or LS 100, is a versatile, compact light cargo van purpose-built to serve diverse commercial applications in population-dense urban areas.

The LS100 completed

all homologation tests in compliance with the standards and requirements of the European Union (EU) in July and received type approval from the EU in August.

The LS100 is eligible for sale in all 27 EU member states and other countries that

adopt EU vehicle homologation standards.

completed all homologation tests in compliance with the standards and requirements of the European Union (EU) in July and received type approval from the EU in August.

The LS100 is eligible for sale in all 27 EU member states and other

countries that adopt EU vehicle homologation standards.

In January 2023, we introduced the Logistar 300 (LS300) in a full-size van segment.

The vehicle will also be made available as a van and as cab chassis that may be customized

and will initially be offered for The North American market.

The vehicle will also be made available as a van and as cab chassis that may be

customized and will initially be offered for The North American market.

We have also expanded our product line with the LogiMax series for the heavy duty market.

The LogiMax 864M (LM864H) is a 6x4 semi-tractor hydrogen fuel cells.

date of this report, we expect the LMH864 will be available for commercial use in late 2023 pending homologation approvals.

As of the date of this report, we intend to initially launch sales of the LM864H in North America and Europe.

we stopped the launch of LM864H due to lack of hydrogen filling infrastructure and uncertain market acceptance.

As of the date of this report, we do not have any future plan to re-launch this model.

The TeeMak is an off-road vehicle designed to meet the demands of farms and ranches, corporate campuses, warehouses, construction sites, or trailing and hunting.

Our pipeline includes the Neibor® 300, an L7e Class compact electric commercial vehicle designed to complement the smaller Neibor® 150 in the European and UK markets, and the

ePortee™ programmable chassis, which we also refer to as the Cenntro iChassis, which became commercially available in quarter four of 2022.

Our pipeline includes the Neibor® 300, an L7e Class compact electric commercial vehicle designed to complement the smaller Neibor® 150 in the European and UK markets, and

the ePortee™ programmable chassis, which we also refer to as the Cenntro iChassis, which became commercially available in quarter four of 2022.

In 2023, we introduced an unmanned delivery vehicle using our iChassis 100 platform and OEMed the

vehicles for a third-party brand.

We have also introduced a minibus product and OEMed the minibus for a third-party brand.

As of the date of this report, our pipeline includes the LS210, an N1K Type electric commercial van to replace with older

model, LS210.

To Invest in Advanced Battery Packing Technology

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qualified suppliers to co-design digitally enabled components in areas such as steering, braking, acceleration and signaling.

With the global trend toward reducing the number of internal combustion engine (“ICE”) vehicles, electric-battery and fuel cell technologies stand out as strong alternatives.

With the global trend toward reducing the number of internal combustion engine (“ICE”) vehicles, electric-battery and fuel cell technologies stand out as strong

alternatives.

Prior to COVID-19, battery costs significantly decreased over the past decade, and in the long run, prices are expected to continue to fall.

According to research service Bloomberg NEF (“BNEF”), lithium-ion battery pack prices decreased from

above $1,200 per kilowatt-hour in 2010 to $132/kWh in 2021 in real terms, representing a decline of approximately 89%.

Although battery pack prices have recently increased and may continue to increase in the near-term due to the rising price of

lithium as a result of COVID-19 and other factors, we anticipate that battery prices will continue to decrease in the long-term.

BNEF forecasts that by 2024, average prices are expected to fall to below $100/kWh, though such reductions in average

price may be delayed due to higher raw material prices in the near term.

As investment in battery technology continues to increase, we believe these cost reductions will continue to improve the economics of battery-powered ECVs.

According to research service Bloomberg NEF (“BNEF”), lithium-ion battery pack prices

decreased from above $1,200 per kilowatt-hour in 2010 to $132/kWh in 2021 in real terms, representing a decline of approximately 89%.

Although battery pack prices have recently increased and may continue to increase in the near-term due to the

rising price of lithium as a result of COVID-19 and other factors, we anticipate that battery prices will continue to decrease in the long-term.

BNEF forecasts that by 2024, average prices are expected to fall to below $100/kWh, though such

reductions in average price may be delayed due to higher raw material prices in the near term.

As investment in battery technology continues to increase, we believe these cost reductions will continue to improve the economics of battery-powered

Batteries are and remain, one on of the key components in the EV industry.

With the anticipated demand for EVs, it is increasing important for OEMs to control their own battery supply.

address this need, in August Cenntro announced the establishment of a separate operating division and wholly owned U.S.

With the anticipated demand for EVs, it is increasing important for OEMs to control their own

battery supply.

To address this need, in August Cenntro announced the establishment of a separate operating division and wholly owned U.S.

subsidiary Cennatic Power Inc.

to manufacture advanced lithium-ion batteries to be used for its electric commercial

Our Cennatic facility is in Monterrey, Mexico.

Construction of the building was completed in late 2022.

The facility will commercially produce lithium-ion batteries with advanced features including greater temperature tolerance,

faster charging time, safer operating parameters, longer life cycles and cost efficiencies.

Our decision to bring the production of essential battery technologies and manufacturing process in-house can accelerate the development of our electric

commercial vehicles and reduce our supply chain dependency on external suppliers.

The facility’s strategic location in Mexico provides for competitive production and complements our strategy to open assembly plants that are in customers’

to manufacture advanced lithium-ion batteries to be used for its electric

commercial vehicles.

Our Cennatic facility is in Monterrey, Mexico and construction of the building to house the manufacturing facility was completed in late 2022.

The facility will commercially produce lithium-ion batteries with advanced

features including greater temperature tolerance, faster charging time, safer operating parameters, longer life cycles and cost efficiencies.

Our decision to bring the production of essential battery technologies and manufacturing process

in-house can accelerate the development of our electric commercial vehicles and reduce our supply chain dependency on external suppliers.

The facility’s strategic location in Mexico provides for competitive production and complements our

strategy to open assembly plants that are in customers’ markets and as of the date of this report, the majority of our production equipment has been shipped to our factory.

To that end, we expect to complete the production line installation in

the second quarter of 2024.

To Expand Market Breadth and Depth

We expect to increase our market share in the current markets where our ECVs are sold, while simultaneously penetrating new markets worldwide.

Aside from the Europe and US market,

we are expanding our operations to select markets, such as Morocco, the Dominican Republic, and Turkey.

Aside from the Europe and US

market, we are expanding our operations to select markets, such as Morocco, the Dominican Republic, and Turkey.

The following table summarizes the breakdown of our revenues by region for the years ended December 31, 2023 and 2022, respectively:

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We are currently targeting new markets where local governments have begun incentivizing a shift from ICEs to EVs.

We intend to expand our reach in these markets with the efforts

and market knowledge of our existing channel partners as well as by forming new partnerships and leveraging our increased brand recognition.

We intend to expand our reach in these markets with the efforts and market

knowledge of our existing channel partners as well as by forming new partnerships and leveraging our increased brand recognition.

To Emerge as a Key Developer of Autonomous Driving Solutions

We intend to continue to invest in chassis digitization and smart driving technology.

We have developed the ePortee™, which we also refer

to as the Cenntro iChassis, an open-platform and programmable vehicle chassis with digital control capabilities.

We intend to continue to invest in our smart driving technology to develop more applications using our iChassis platforms.

We have developed the ePortee™, which we also refer to

as the Cenntro iChassis, an open-platform and programmable vehicle chassis with digital control capabilities.

The Cenntro iChassis is designed to act as a basic and core execution unit of an automated or autonomous driving vehicle.

application programming and communication interfaces that enable third-party autonomous driving vehicle developers to use this programmable chassis to develop various autonomous driving applications and fittings.

includes application programming and communication interfaces that enable third-party autonomous driving vehicle developers to use this programmable chassis to develop various autonomous driving applications and fittings.

Competitive Strengths

We design, develop and manufacture ECVs in a cost-effective manner to enable us to compete favorably in the light- and medium-duty commercial vehicle market.

In a fast-growing

industry, we believe our ability to adapt and evolve without jeopardizing the timing, quality, and quantity of the service through our agile and well-run structure has been proven through our forward-looking approach.

Unlike many of our competitors, our approach is future-focused while developing an asset-light, distributed manufacturing business model as opposed to generating short-term

revenues and unsustainable growth.

In a fast-growing industry, we

believe our ability to adapt and evolve without jeopardizing the timing, quality, and quantity of the service through our agile and well-run structure has been proven through our forward-looking approach.

Unlike many of our competitors, our approach is future-focused while developing an asset-light, distributed manufacturing business model as opposed to generating short-term revenues and

unsustainable growth.

This approach, paired with our values, tools and teams, has put us in a position to operate in the ECV market in a way that we believe our competitors cannot.

We believe our competitive strengths position us

well to continue to grow our base of vehicles and capitalize on the expected growth in the light- and medium-duty ECV market.

We believe our competitive strengths position us well to

continue to grow our base of vehicles and capitalize on the expected growth in the light- and medium-duty ECV market.

Our Consistent Launch and Homologation of New and Innovative ECV Models

Over the past calendar year, we introduced five new ECV models, each of which are designed for specific geographic markets and to address

additional commercial applications.

The Logistar™ 400 is a U.S.

Over the past calendar year, we introduced the iChassis and Minibus products for third-party OEMs that are manufactured in our facility in Changxing, China.

The ePortee™, which we also refer

to as the Cenntro iChassis is an open-platform and programmable chassis product.

The Cenntro iChassis is designed to be a basic modular building block for use by automakers and special vehicle upfitters in the design of automated or

autonomous driving vehicles.

Through our advancements in vehicle digitization and smart components, we have equipped the Cenntro iChassis with digital control capabilities.

The Cenntro iChassis allows third-party developers to integrate

detection devices (i.e., lidar, radar, ultra-sound, infrared and other sensory devices) and third-party or proprietary decision-making software to allow for vehicles based on the programmable chassis to be driven autonomously.

manufacture minibus products for a global golf car manufacturer.

Our minibus is a 14-seat passenger carrier mainly used for shuttling people in a closed environment, such as theme parks or tourist attractions.

These products are in addition to our five other ECV models, each of which are designed for specific geographic markets and to address additional commercial applications.

The Logistar™ 400 is

Class 4 (over 14,000 lbs.) medium-duty electric commercial truck designed to meet U.S.

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The Logistar™ 400 is offered in four configurations:

cargo-box, van, flatbed truck, and basic chassis for upfitters.

cargo-box, van, flatbed truck, and basic chassis for

The Logistar™ 200 is a European Union N1 Class electric commercial vehicle designed to meet the European Union’s city delivery and city service requirements.

The Logistar™ 200 was

homologated in the European Union in January 2022 and first became commercially available in the European market in February 2021.

The Logistar™ 200, is a European Union N1 Class electric commercial vehicle designed to meet the European Union’s

city delivery and city service requirements.

The Logistar™ 200 was homologated in the European Union in January 2022

and first became commercially available in the European market in February 2021.

The Logistar™ 200, is a European Union N1 Class electric commercial vehicle designed to meet the European Union’s city delivery and city service requirements.

The Neibor® 150 is a European Union and UK L7e (heavy quadricycle) Class compact electric commercial vehicle designed to meet European neighborhood delivery and neighborhood service needs.

150 was homologated in December 2022 and first became commercially available in the European market in March, 2022.

We have also developed the Teemak™, an off-road electric commercial vehicle with essentially no homologation requirements in the

United States and limited certification requirements and are developing the Neibor® 300, a European Union and UK L7e (heavy quadricycle) Class compact electric commercial vehicle designed to complement the smaller Neibor® 150.

The Neibor® 150 was homologated in December 2022 and

first became commercially available in the European market in March, 2022.

We have also developed the Teemak™, an off-road electric commercial vehicle with essentially no homologation requirements in the United States and limited

certification requirements and are developing the Neibor® 300, a European Union and UK L7e (heavy quadricycle) Class compact electric commercial vehicle designed to complement the smaller Neibor® 150.

See “Risk Factors- Risks Related to Our Business and Financial Results-Our future success depends on our ability to introduce new models and we may experience delays in launching and ramping up production of our new ECV models .”

We have also developed the ePortee™, which we also refer to as the Cenntro iChassis, an open-platform and programmable chassis product.

The Cenntro iChassis is designed to be a

basic modular building block for use by automakers and special vehicle upfitters in the design of automated or autonomous driving vehicles.

Through our advancements in vehicle digitization and smart components, we have equipped the Cenntro

iChassis with digital control capabilities.

The Cenntro iChassis allows third-party developers to integrate detection devices (i.e., lidar, radar, ultra-sound, infrared and other sensory devices) and third-party or proprietary decision-making

software to allow for vehicles based on the programmable chassis to be driven autonomously.

We have also developed the Teemak™, an off-road electric commercial vehicle with essentially few homologation and certification requirements in the United States.

Teemak™ first became commercially available in the United States in December 2021.

The Teemak™ first became

commercially available in the United States in December 2021.

The electrification of the global automotive industry has been a major policy focus of governments worldwide.

Certain countries, such as the United States, China, Canada,

Germany, and various other European countries, have announced aggressive EV initiatives designed to reduce carbon emissions, through the replacement of fossil fuels, and have begun incentivizing the development and sale of ECVs through government

subsidy programs.

Certain countries, such as the United States, China, Canada, Germany, and various

other European countries, have announced aggressive EV initiatives designed to reduce carbon emissions, through the replacement of fossil fuels, and have begun incentivizing the development and sale of ECVs through government subsidy

Proven Record of Manufacturing and Distributing ECVs

We have manufactured light-duty ECVs since 2018.

Our business to date has began to expand beyond Metro® into five other categories of ECV models to expand our reach in the global

Our business to date has began to expand beyond Metro® into five other categories of ECV models to expand our reach in the global ECV market.

We believe we are well positioned to take advantage of the growing global ECV market, which has few mature competitors capable of manufacturing and delivering cost-effective and financially viable ECVs today.

Distributed Manufacturing Methodology

Traditionally, automakers operate under a vertically integrated business model performing a variety of capital-intensive and time-consuming functions, including not only vehicle

design, process setup, tooling, parts making, supply chain establishment, vehicle assembly and vehicle homologation, but also market promotion, sales and distribution, after-market support and vehicle servicing.

Traditionally, automakers operate under a vertically integrated business model performing a variety of capital-intensive and time-consuming functions, including not only vehicle design,

process setup, tooling, parts making, supply chain establishment, vehicle assembly and vehicle homologation, but also market promotion, sales and distribution, after-market support and vehicle servicing.

This business model requires

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Based on our unique manufacturing and distribution model, we believe we are positioned to be an industry disruptor.

Unlike many traditional, vertically integrated vehicle

companies, which manufacture fully assembled vehicles for export, we use an innovative distributed manufacturing methodology in which our ECVs are designed to be manufactured and exported as vehicle kits for assembly in local markets.

are designed using a “modular” method, allowing for simple final assembly and eliminating the need for acquiring and maintaining heavy and expensive assembly equipment at the local assembly stage.

We or our manufacturing partners manufacture and

integrate the materials and parts into vehicle kits, which we can then ship to one of our local assembly facilities for final assembly.

We believe that our distributed manufacturing methodology can provide us with competitive advantages compared to traditional vehicle

manufacturers, as we are able to operate with lower capital investment requirements.

Unlike many traditional, vertically integrated vehicle companies, which

manufacture fully assembled vehicles for export, we use an innovative distributed manufacturing methodology in which our ECVs are designed to be manufactured and exported as vehicle kits for assembly in local markets.

Our ECVs are designed

using a “modular” method, allowing for simple final assembly and eliminating the need for acquiring and maintaining heavy and expensive assembly equipment at the local assembly stage.

We or our manufacturing partners manufacture and integrate

the materials and parts into vehicle kits, which we can then ship to one of our local assembly facilities for final assembly.

We believe that our distributed manufacturing methodology can provide us with competitive advantages compared to traditional vehicle manufacturers, as we are able to operate with lower

capital investment requirements.

In addition, we believe our distributed manufacturing methodology provides significant advantages for local homologation, local distribution, and local service.

For example, we believe U.S.

homologation certification requirements are less burdensome for vehicles that are assembled and manufactured in the United States rather than imported into the United States.

As of the date of this report, our distributed manufacturing methodology relied upon six Cenntro-owned assembly facilities, including our

facility at Changxing, which assembles for international export, and our local assembly facility in Freehold, New Jersey, which we utilize for trial production of our Logistar™ 400 model.

Currently, Cenntro has six manufacturing and assembly

plants including three in North America, two in China, and one in Germany.

certification requirements are less burdensome for vehicles that are assembled and manufactured in the United States rather than imported into the United States.

As of the date of this report, our distributed manufacturing methodology relied upon six Cenntro-owned assembly facilities, including our facility at

Changxing, which assembles for international export, and our local assembly facility in Freehold, New Jersey, which we utilize for trial production of our Logistar™ 400 model.

Currently, Cenntro has six manufacturing and assembly plants

including three in North America, two in China, and one in Germany.

We plan to open a third North American facility in the second quarter of 2023.

Our North American facilities provide vehicles to the local market and export ECVs to markets in Central and South America.

The Howell, New Jersey and Jacksonville, Florida

facility both assemble the Logistar™ 400, the Metro® and the Teemak™.

The Herne facility, acquired through the acquisition of TME has allowed us to expand capacity in the European Union for production of our European ECV models, including the

Logistar™ series:

The Howell, New Jersey and Jacksonville, Florida facility both

assemble the Logistar™ 400, the Metro® and the Teemak™.

The Herne facility, acquired through the acquisition of TME has allowed us to expand capacity in the European Union for production of our European ECV models, including the Logistar™

the Metro® and the Teemak™.

Prior to the regionalization of our supply chains, we plan to utilize these facilities to assemble vehicle kits that are manufactured by us in our facilities in Changxing, in the

case of the Metro®, and by third parties in the case of our other new ECV models.

We have subcontracted all manufacturing processes of the ECV components for our Logistar™ and Neibor® series and Teemak™ model to our qualified suppliers, allowing

us to further reduce our capital expenditure requirements and increase our focus on local assembly.

In the long-term, through our deep supply chain development know-how, we intend to establish supply chain relationships in North America and the European Union to support our

manufacturing and assembly needs in these markets, thereby reducing the time in transit and potentially the duties associated with importing our components and spare parts.

We plan to use a “merge in transit” model where component parts from

suppliers are consolidated at our local assembly facilities for final ECV assembly.

Prior to the regionalization of our supply chains, we plan to utilize these facilities to assemble vehicle kits that are manufactured by us in our facilities in Changxing, in the case of the

Metro®, and by third parties in the case of our other new ECV models.

We have subcontracted all manufacturing processes of the ECV components for our Logistar™ and Neibor® series and Teemak™ model to our qualified suppliers, allowing us to

further reduce our capital expenditure requirements and increase our focus on local assembly.

In the long-term, through our deep supply chain development know-how, we intend to establish supply chain relationships in North America and the European Union to support our manufacturing

and assembly needs in these markets, thereby reducing the time in transit and potentially the duties associated with importing our components and spare parts.

Our Investment in Global Assembly and Manufacturing Facilities

We have established an asset-light, distributed manufacturing business model through which we can distribute our unique modular vehicles in vehicle kits for local assembly in

addition to distributing fully assembled vehicles.

Each of our vehicle models has a modular design that allows for local assembly in small factory facilities, which allows us to focus our efforts on the design of ECV models and related

technologies while outsourcing various portions of the manufacturing, assembly and marketing of our vehicles to qualified third parties, allowing the Company to operate with lower capital investment than traditional vertically integrated

automotive companies.

We have established an asset-light, distributed manufacturing business model through which we can distribute our unique modular vehicles in vehicle kits for local assembly in addition to

distributing fully assembled vehicles.

Each of our vehicle models has a modular design that allows for local assembly in small factory facilities, which allows us to focus our efforts on the design of ECV models and related technologies while

outsourcing various portions of the manufacturing, assembly and marketing of our vehicles to qualified third parties, allowing the Company to operate with lower capital investment than traditional vertically integrated automotive companies.

To support the expansion of our product line, in May 2022, we acquired a new manufacturing facility in Changxing, Huzhou City, China, for a purchase price of approximately $19.5 million.

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The new facility will support the production of a new Metro® series and have an expected capacity of 50,000 vehicles annually once fully operational.

To meet our anticipated demand in the United States, we have established a local assembly facility in Jacksonville, Florida and have expanded our capacity at our New Jersey-based

assembly facility.

To meet our anticipated demand in the United States, we have established a local assembly facility in Jacksonville, Florida and have expanded our capacity at our New Jersey-based assembly

We began trial assembly operations at the Jacksonville facility in March 2023.

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market and will also supply vehicles to our electric vehicle centers (“EV Centers”) and customers in the Central American region.

Until approximately December 31, 2021, we outsourced the vast majority of the marketing of our vehicles to third party “channel partners” and relied substantially on

private label channel partners to assemble the Metro® from vehicle kits that we manufactured in our China-based facilities.

Our relationships with such third parties, our “channel partners,” have allowed us to forego expensive capital

investments in our own facilities and operate within our historic working capital limitations.

With the introduction of our new ECV models, however, we have begun the process of shifting the manufacturing of our vehicle kits and in some cases

fully assembled vehicles to third party OEM partners and, in the case of vehicle kits, assembling them in our own facilities in North America and Europe.

We have established a European Operations Center in Dusseldorf, Germany, which provides

marketing support, after-market support and spare-parts warehousing for the European market, as well as warehousing services with a logistics company in Budapest, Hungary to house spare parts for our ECVs.

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

We further believe a well-developed distribution and service infrastructure is important to our brand as an automobile manufacturer.

For these reasons, we have made new and expanding investments in our own distribution and service

infrastructure model.

Until approximately December 31, 2021, we outsourced the vast majority of the marketing of our vehicles to third party “channel partners” and relied substantially on private label channel

partners to assemble the Metro® from vehicle kits that we manufactured in our China-based facilities.

Our relationships with such third parties, our “channel partners,” have allowed us to forego expensive capital investments in our own

facilities and operate within our historic working capital limitations.

With the introduction of our new ECV models, however, we have shifted the manufacturing of our vehicle kits and in some cases fully assembled vehicles to third party OEM

partners and, in the case of vehicle kits, assembling them in our own facilities in North America and Europe.

We have established a European Operations Center in Dusseldorf, Germany, which provides marketing support, after-market support and

spare-parts warehousing for the European market, as well as warehousing services with a logistics company in Budapest, Hungary to house spare parts for our ECVs.

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 further believe a well-developed

distribution and service infrastructure is important to our brand as an automobile manufacturer.

For these reasons, we have made new and expanding investments in our own distribution and service infrastructure model.

Our Core Technology

Because we design, develop and manufacture our ECVs, our technology is at the core of what we believe positions us to effectively compete

and become a technology leader in the ECV market.

Because we design, develop and manufacture our ECVs, our technology is at the core of what we believe positions us to effectively compete and become a technology leader in the ECV market.

Since inception in 2013 through December 31, 2023, we have spent approximately $90.0 million in research and development activities related to our business.

Specifically, we have developed new

vehicle chassis structures and digital control, smart driving and network connectivity capabilities.

In addition to our significant know-how, as of December 31, 2022, we had 113 discovery patents, nine design patents and 86 innovation patents granted by the Chinese Patent Office, and seven innovation patent applications, two

design patent applications and 26 discovery patent applications pending in the Chinese Patent Office, covering our technological innovations relating to power systems, vehicle electronics, vehicle control

and structure, production processes and other new technologies.

Specifically, we have developed new vehicle chassis structures and digital control,

smart driving and network connectivity capabilities.

In addition to our significant know-how, as of December 31, 2023, we had 122 discovery patents, nine design

patents and 86 innovation patents granted by the Chinese Patent Office, four design patent applications and ten discovery patent applications pending in the Chinese Patent Office, covering our

technological innovations relating to power systems, vehicle electronics, vehicle control and structure, production processes and other new technologies.

Our technological advantage begins with our chassis designs, which promote efficiencies in energy consumption as well as development and manufacturing processes.

The Metro® and

Neibor® Series utilize proprietary, lightweight chassis designs that reduce the overall weight of the vehicle and thus increase the battery efficiency of the vehicle.

Our chassis designs also lend themselves to modification and flexibility to

meet the needs of the specific customers in our local markets.

For instance, our ECVs can be upfitted and customized to fill a variety of end-user roles, such as a small firetruck, street sweeper, vending truck, garbage truck, pickup truck or

service truck.

The Metro® and Neibor® Series

utilize proprietary, lightweight chassis designs that reduce the overall weight of the vehicle and thus increase the battery efficiency of the vehicle.

Our chassis designs also lend themselves to modification and flexibility to meet the needs

of the specific customers in our local markets.

For instance, our ECVs can be upfitted and customized to fill a variety of end-user roles, such as a small firetruck, street sweeper, vending truck, garbage truck, pickup truck or service truck.

We are focused on continuous improvement in our technology through continued investment in research and development.

We believe our ECV expertise, market focus, installed base of

vehicles and know-how (including our smart driving capabilities), coupled with our dedication to research and development, will enable us to continue advancing our business.

We believe our ECV expertise, market focus, installed base of vehicles and

know-how (including our smart driving capabilities), coupled with our dedication to research and development, will enable us to continue advancing our business.

Low Upfront Cost and Operating Costs to End-Users

Through our modular ECV design and unique business model, we believe we are able to enter the ECV market with competitively priced products compared to our competitors in the ECV

For instance, our Metro® and Neibor® Series are designed with a proprietary, lightweight chassis structure, enabling us to use less steel and such ECVs to utilize less battery power than our competitors.

Furthermore, because our ECVs have

fewer components and moving parts than their ICE counterparts, we believe the ongoing maintenance costs of our vehicles is low.

In addition, engines in traditional ICE commercial vehicles typically have a 10-year life, whereas the motor in our

ECVs are designed to last, on average, for more than 20 years.

Through our modular ECV design and unique business model, we believe we are able to enter the ECV market with competitively priced products compared to our competitors in the ECV space.

instance, our Metro® and Neibor® Series are designed with a proprietary, lightweight chassis structure, enabling us to use less steel and such ECVs to utilize less battery power than our competitors.

Furthermore, because our ECVs have fewer

components and moving parts than their ICE counterparts, we believe the ongoing maintenance costs of our vehicles is low.

In addition, engines in traditional ICE commercial vehicles typically have a 10-year life, whereas the motor in our ECVs

are designed to last, on average, for more than 20 years.

The lithium-ion batteries used in our ECVs have a useful life of approximately 2,000 charge-cycles, with each charge providing for a range, in the case of the Metro®, of approximately

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Our Integrated Supply Chain

We have invested significant time and resources in developing a supply chain capable of providing all of the components and materials

necessary to manufacture our ECVs.

Our integrated supply chain is comprised of over 300 suppliers located in China and various other countries.

Generally, our suppliers undergo rigorous testing before we onboard them as a supplier, including

quality and process auditing, product verification, regulatory compliance and reliability testing.

Our suppliers must demonstrate that they can consistently deliver their specialized parts on time, while meeting our quality and product

specifications.

Many of our components are based on Cenntro-developed designs, and our suppliers are contractually restricted from selling our customized components to any third parties unless we discontinue our purchases from such suppliers.

We plan to expand our supply chain as necessary to support our planned growth, including localizing our supply chain for certain key components of our ECVs in North America and

the European Union.

We have subcontracted all manufacturing processes of the ECV components for our new ECV models to our qualified suppliers, allowing us to further reduce our capital expenditure requirements and increase our focus on local

We have invested significant time and resources in developing a supply chain capable of providing all of the components and materials necessary to manufacture our ECVs.

Our integrated supply

chain is comprised of over 500 suppliers located in China and various other countries.

Generally, our suppliers undergo rigorous testing before we onboard them as a supplier, including quality and process auditing, product verification,

regulatory compliance and reliability testing.

Our suppliers must demonstrate that they can consistently deliver their specialized parts on time, while meeting our quality and product specifications.

Many of our components are based on

Cenntro-developed designs, and our suppliers are contractually restricted from selling our customized components to any third parties unless we discontinue our purchases from such suppliers.

We plan to expand our supply chain as necessary to support our planned growth, including localizing our supply chain for certain key components of our ECVs in North America and the European

Strategic Channel Partner Network

In selected markets, we continue to leverage our channel partner network to distribute our ECVs around the world.

Through this network, we have engaged partners for local

homologation, promotion, distribution, and service in the markets they serve, and, in a limited number of cases, assembly, upfitting and customization.

All our channel partners sell fully assembled ECVs under private label to the local market and

provide aftermarket service to end users.

Our channel partners such as HW Electro in Japan, purchase our fully assembled ECVs (other than the “private label” channel partners) and sell them in their respective local market.

As of December 31, 2022, we shifted our reliance on channel partners and had established seven EV Centers which are now the base of our distribution network in addition leading

our local marketing and aftermarket service.

Through this network, we have engaged partners for local homologation,

promotion, distribution, and service in the markets they serve, and, in a limited number of cases, assembly, upfitting and customization.

All our channel partners sell fully assembled ECVs under private label to the local market and provide

aftermarket service to end users.

Our channel partners such as HW Electro in Japan, purchase our fully assembled ECVs with HW Electro’s brand and sell them in their respective local market.

As of December 31, 2023, we shifted our reliance on channel partners and had established eleven EV Centers which are now the base of our distribution network in addition leading our local

marketing and aftermarket service.

Our Highly Skilled and Experienced Management Team

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Wang, our Chief Executive Officer and Chairman of the Board, who we refer to as our Chairman.

Wang has extensive experience in the automotive and technology industries, having co-founded Sinomachinery Group (a diesel power system (engine and transmission) manufacturer) in 2006 and UTStarcom (a global telecom infrastructure provider),

which went public in 2000.

Wang was named as one of the Outstanding 50 Asian Americans in Business by Asian American Business Development Center in 2004, one of China’s 100 Most Innovative Businessmen by Fast Company Magazine in 2017 and one

of the Most Intriguing Entrepreneurs by Goldman Sachs in 2019.

Wang has extensive experience in the automotive and

technology industries, having co-founded Sinomachinery Group (a diesel power system (engine and transmission) manufacturer) in 2006 and UTStarcom (a global telecom infrastructure provider), which went public in 2000.

Wang was named as one

of the Outstanding 50 Asian Americans in Business by Asian American Business Development Center in 2004, one of China’s 100 Most Innovative Businessmen by Fast Company Magazine in 2017 and one of the Most Intriguing Entrepreneurs by Goldman

Sachs in 2019.

More specifically, our management team has significant experience in vehicle design, supply chain, logistics, quality control and process management.

Our management is singularly

focused on developing and manufacturing high quality, best-in-class, light- and medium-duty ECVs for the growing ECV marketplace and becoming a technology leader in the ECV market.

Our management is singularly focused on

developing and manufacturing high quality, best-in-class, light- and medium-duty ECVs for the growing ECV marketplace and becoming a technology leader in the ECV market.

Starting in 2013 with a simple idea, our management team has

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Our success depends, at least in part, on our ability to protect our core technology and intellectual property.

To accomplish this, we rely on a combination of patents, patent

applications, trade secrets, including know-how, employee and third-party nondisclosure agreements, copyright laws, trademarks, intellectual property licenses and other contractual rights to establish and protect our proprietary rights in our

As of December 31, 2022, we had 113 discovery patents, nine design patents and 86 innovation patents granted by the Chinese Patent Office, and seven innovation patent applications, two design patent applications and 26 discovery patent applications pending in the Chinese Patent Office, covering our technological

innovations relating to power systems, vehicle electronics and structure, production processes and other new technologies.

All of our patents are granted under PRC law and have not been given reciprocal treatment and protection under the laws of

either the United States or the European Union.

To accomplish this, we rely on a combination of patents, patent applications,

trade secrets, including know-how, employee and third-party nondisclosure agreements, copyright laws, trademarks, intellectual property licenses and other contractual rights to establish and protect our proprietary rights in our technology.

As of December 31, 2023, we had 122 discovery patents, nine design patents and 86 innovation patents granted by the Chinese Patent Office, and seven innovation patent applications, four design patent applications and ten discovery patent applications pending in the Chinese Patent Office, covering our

technological innovations relating to power systems, vehicle electronics and structure, production processes and other new technologies.

All of our patents are granted under PRC law and have not been given reciprocal treatment and protection

under the laws of either the United States or the European Union.

Our issued patents will begin to expire in April 2024.

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Corporate Affairs

We provide social insurance for each employee in accordance with Chinese law, including pension insurance, medical insurance, unemployment insurance, work injury insurance and maternity insurance

and housing provident fund.

We provide social insurance for each employee in accordance with Chinese law, including pension insurance, medical insurance, unemployment insurance, work injury insurance and maternity

insurance and housing provident fund.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business