[Management View]
Kandi Technologies emphasized its dual-engine strategy, balancing stable cash flow businesses with growth incubation initiatives. Key metrics included a gross margin improvement to 45.2% (up 13.5 percentage points YoY) and a strong cash position of $256.7 million as of June 30, 2025. Strategic priorities focused on expanding dealer networks, optimizing inventory, and diversifying into intelligent equipment and new energy infrastructure.

[Outlook]
Management anticipates profitability gains through operational refinement, inventory optimization, and disciplined cost control. New product launches are expected by mid-2026, targeting growth in intelligent equipment and battery swapping technologies. The company remains confident in its ability to create long-term shareholder value through innovation and strategic partnerships.

[Financial Performance]
Net revenues declined 39.3% YoY to $36.3 million, primarily due to lower sales of off-road vehicles and EV products. Net income fell to $1.7 million from $2.4 million YoY, with EPS dropping to $0.02 from $0.03. Operating expenses decreased 21.4% YoY to $18.3 million, reflecting cost discipline, while R&D expenses rose 48.5% due to new battery product initiatives.

[Q&A Highlights]
Question 1: Can you elaborate on the gross margin improvement and its sustainability?
Answer: The gross margin improvement to 45.2% was driven by a favorable product mix, regional revenue shifts, and increased sales of previously impaired inventory. Management expects these factors to continue contributing to margin stability, supported by refined operations and cost control measures.

Question 2: What is the strategic significance of the partnership with Deep Robotics?
Answer: The collaboration with Deep Robotics focuses on developing intelligent golf equipment and quadruped robots for security inspections. These products leverage Kandi's proprietary cloud-edge terminal intelligence system, unlocking new revenue streams and positioning the company in high-growth markets.

Question 3: How does the CATL battery swapping order impact future growth?
Answer: The first heavy truck battery swapping station order from CATL supports a 10,000-station deployment plan. This positions Kandi as a key supplier in the new energy infrastructure sector, with substantial revenue potential and technological leadership.

Question 4: What are the anticipated benefits of the dealer network expansion?
Answer: The dealer network grew to 1,050 outlets, with the dealer-to-retail sales mix improving from 129 to 228. This diversification enhances market penetration, service capabilities, and resilience, aligning with Kandi's strategic distribution goals.

Question 5: How is Kandi addressing the decline in off-road vehicle sales?
Answer: Management is optimizing inventory, streamlining production processes, and exploring high-margin direct-to-consumer channels. Additionally, new product launches and diversification into intelligent equipment aim to offset declines in traditional segments.

[Sentiment Analysis]
Analysts expressed cautious optimism, acknowledging the company's strategic diversification and operational improvements amid revenue challenges. Management maintained a confident tone, emphasizing resilience, innovation, and long-term growth potential.

[Quarterly Comparison]
| Metric | Q2 2025 | Q2 2024 | YoY Change |
|----------------------------|-----------------|-----------------|------------------|
| Net Revenues | $36.3M | $59.8M | -39.3% |
| Gross Profit | $16.4M | $19.0M | -13.7% |
| Gross Margin | 45.2% | 31.7% | +13.5 pp |
| Operating Expenses | $18.3M | $23.3M | -21.4% |
| R&D Expenses | $2.5M | $1.7M | +48.5% |
| Net Income | $1.7M | $2.4M | -29.2% |
| EPS | $0.02 | $0.03 | -33.3% |
| Cash Position | $256.7M | $126.3M | +103.4% |

[Risks and Concerns]
1. Revenue decline due to lower sales of off-road vehicles and EV products remains a significant challenge.
2. Increased R&D spending may pressure short-term profitability.
3. Dependence on emerging markets and new product launches introduces execution risks.
4. Macroeconomic uncertainties could impact consumer demand and supply chain stability.

[Final Takeaway]
Kandi Technologies demonstrated resilience and strategic foresight in navigating revenue challenges during Q2 2025. While net revenues and income declined, the company achieved notable improvements in gross margin and operational efficiency. Strategic diversification into intelligent equipment and new energy infrastructure, coupled with robust liquidity, positions Kandi for long-term growth. However, execution risks and macroeconomic headwinds warrant close monitoring. Investors should weigh the company's innovation-driven approach against short-term financial pressures.