Kandi Technologies Group, Inc. Q2 FY2026 earnings call

• Strategic Transformation: The company has entered the 'harvest period' of its strategic transformation, with new businesses beginning to deliver tangible results and the core business showing improved growth momentum.
• Battery Swapping Equipment: Subsidiary China Battery Exchange secured initial orders from CATL’s Shijian Energy for heavy-duty truck swapping stations. The business is now in scale production, with priorities focused on order delivery, quality improvement, and expanding customer relationships for follow-on orders.
• AI Data Center Solutions: Xingzhu New Energy became an authorized solutions reseller for Schneider Electric, combining UPS infrastructure with energy storage expertise. New products are rolling out, with overseas orders already received, expected to drive significant revenue this year.
• Intelligent Robotics: Continued R&D investment in autonomous quadcopter robots for security, inspection, and logistics. The business remains in early stages, focusing on aligning development with specific customer use cases and validating real-world performance before further scaling.
• Core Off-Road EV Business: Average monthly sales through the U.S. dealer network doubled YoY. The company is clearing inventory of slow-selling models and expects to transition to an all-new product lineup by Q4 2026 to support 2027 growth.
• Roar Integration: Post-acquisition integration continues, leveraging Candy Group’s manufacturing/supply chain with Roar’s brand and 300+ dealer channels. Focus is on preserving premium positioning amidst price competition, optimizing channels, and preparing new product launches for 2027.

Total Revenue: $57.1 million (up 57.4% YoY). Core Off-Road Electric Vehicle Business: $54.2 million (95% of total revenue), up 59.4% YoY. This includes $6.1 million from Roar, the electric off-road motorcycle brand acquired in February 2026. New Energy/Intelligent Equipment Business: Revenue is not yet material; battery swapping equipment is in volume production with first orders secured, expected to generate meaningful revenue in H2 2026. AI Data Center Backup Power: Expected to contribute substantial income in 2026 following new overseas orders.

• Full-Year 2026 Outlook: Management expects battery swapping equipment to begin generating meaningful revenue in H2 2026. Xingzhu New Energy is expected to make substantial income contributions later this year as overseas orders advance.
• 2027 Outlook: Strong confidence in growth prospects for 2027, driven by the upgraded Candy product portfolio, new Roar product launches, and continued revenue contributions from emerging businesses.
• Capital Allocation: Disciplinary approach maintained; investments in new businesses, acquisitions, and capacity expansion will be evaluated based on commercial progress, payback periods, and risk-return profiles to optimize capital efficiency.

• Execution Risk in New Businesses: Commercialization of battery swapping and intelligent robotics involves early-stage execution risks; success depends on meeting project commitments and scaling manufacturing capabilities.
• Market Competition: Intense price competition in the electric off-road motorcycle market poses a risk to Roar’s margins and brand positioning.
• Inventory Transition: Clearing old inventory and transitioning to new product lines carries operational complexity and potential short-term disruptions.
• Forward-Looking Statement Uncertainty: Actual results may differ materially from expectations due to inherent risks and uncertainties in strategic transformation and market conditions.

Q: Can you provide more visibility on the timeline for battery swapping equipment revenue recognition and how the CATL orders impact production planning?

A: Management confirmed that the subsidiary secured its first batch order in July and received a second batch shortly after. These orders provide visibility for production and deliveries. Volume production has commenced, and while revenue contribution is expected to become meaningful in H2 2026, the focus remains on fulfilling these initial orders to establish a track record for future contracts.

Q: How does the acquisition of Roar fit into the overall strategy, and what are the key synergies being realized?

A: Roar complements the core off-road vehicle business by adding a premium electric motorcycle brand with over 300 existing dealer partners. Synergies are being realized by integrating Candy Group’s R&D, manufacturing, and supply chain capabilities with Roar’s brand equity and channel resources. This allows for faster product development tailored to U.S. demand and optimization of the sales network.

Q: What is the current status of the intelligent robotics business, and when do you expect it to become a revenue contributor?

A: The intelligent robotics segment remains in the early R&D stage, focusing on autonomous quadcopters for security and logistics applications. Management emphasized that no immediate revenue contribution is expected. The priority is currently on validating performance in real-world settings and aligning product features with specific customer needs before deciding on further investment or commercialization timelines.