Kandi and CBAK to build US lithium battery facilities

HANGZHOU, China / DALLAS - Kandi Technologies Group, Inc. (NASDAQ GS: KNDI) and CBAK Energy Technology, Inc. (NASDAQ: CBAT) have announced a strategic partnership to construct two lithium battery production facilities in the United States. The first phase will see the development of a battery pack assembly plant, with the second phase focusing on a battery cell manufacturing facility, the timing of which is dependent on favorable conditions. CBAK, currently valued at $59.82 million in market capitalization, brings strong fundamentals to the partnership with a gross margin of 23.65% and earnings per share of $0.13 over the last twelve months.

The partnership aims to meet the increasing demand for off-road vehicles in North America, a market projected to grow from $16.7 billion in 2024 to approximately $25.0 billion by 2030. By establishing these facilities, the companies intend to create a robust supply chain and capitalize on clean energy incentives provided by the U.S. Inflation Reduction Act (IRA). According to InvestingPro analysis, CBAK appears undervalued at its current price of $0.67, trading at attractive multiples with a Price-to-Book ratio of 0.49 and P/E ratio of 5.12.

CBAK will lead the cell manufacturing plant, owning 90% of the joint venture, while Kandi will lead the pack assembly facility with the same ownership percentage. The collaboration is poised to deliver high energy density battery systems optimized for off-road and powersports vehicles.

The companies plan to integrate the production process from battery cells to complete systems, with CBAK initially supplying cells from its overseas production and potentially from the U.S. facility in the future. This strategy is expected to enhance supply chain agility and respond to localization pressures.

Feng Chen, CEO of Kandi Technologies, emphasized the strategic importance of the partnership in Kandi’s North American expansion and its alignment with U.S. clean energy policy incentives. Zhiguang Hu, CEO of CBAK Energy, echoed the sentiment, highlighting the collaboration’s potential to establish a reliable local supply for the emerging vehicle platforms.

Final terms of the partnership, including project locations and timelines, are subject to definitive agreements. This announcement is based on a press release statement, and further information can be found in the companies’ official filings. For deeper insights into CBAK’s financials and growth potential, investors can access comprehensive analysis and 14 additional ProTips through InvestingPro’s detailed research reports, part of their coverage of over 1,400 US equities.

In other recent news, CBAK Energy Technology Inc. reported a significant financial turnaround in its Q4 2024 earnings. The company achieved a net income of $11.79 million, a stark contrast to the $2.45 million loss it faced in the previous year. Despite a 13.61% decline in consolidated net revenues to $176.61 million, CBAK Energy saw a remarkable increase in gross profit, which rose by 31.68% year-over-year to $41.75 million. The gross profit margin also improved to 23.7%, up from 15.52% in 2023, indicating enhanced operational efficiency.

CBAK Energy is also expanding its production capacity, with plans to increase to 7.6 gigawatt-hours by the end of 2025. This expansion includes new facilities in Southeast Asia, expected to begin operations by 2026, to address geopolitical risks. The company remains optimistic about future growth, particularly in its battery segment, which saw a 2.7% revenue increase to $136.59 million and a 37.58% surge in gross profit. Analysts have noted the company’s strategic focus on expanding its core battery segment, moving away from investments in the HyTrans raw materials business.

The company has received substantial orders from key clients, with expectations of increased demand in 2025. CBAK Energy’s leadership has expressed confidence in maintaining profitability and is actively pursuing overseas production to meet customer demands.

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