Kandi Technologies Group, Inc. (KNDI): PESTLE Analysis [Nov-2025 Updated]

You're looking at Kandi Technologies Group, Inc. (KNDI) and seeing a confusing picture: a 39.3% drop in H1 2025 revenue to $36.3 million, but a massive jump in gross margin to 45.2%. Honestly, that volatility is the story. The company is trying to pivot from low-cost EVs to a high-capex battery-swapping system, all while sitting on a strong cash reserve of nearly $257 million. To figure out if Kandi can turn that cash and improved profitability into sustainable growth, you have to look beyond the balance sheet and understand the external pressures-the Political, Economic, Sociological, Technological, Legal, and Environmental (PESTLE) forces-that will defintely determine their fate.

You're looking for a clear-eyed view of Kandi Technologies Group, Inc. (KNDI), and honestly, the landscape is complex. It's not just about their small-scale EV sales; it's about the political currents in China and the technological race for battery dominance. To make a smart decision, you need to map out the external forces-the PESTLE factors-that will defintely shape their next two years.

Here's the quick math: Kandi operates in a high-subsidy, high-competition environment. Their success hinges less on a single vehicle model and more on their ability to navigate Beijing's regulatory shifts and scale their battery-swapping infrastructure. Let's break down the six critical building blocks.

Political Factors

China's central government maintains significant control over EV production licenses and market access, so Kandi is always operating under a top-down regulatory structure. Plus, the ongoing US-China trade tensions create real tariff risk for auto parts and finished vehicles imported by Kandi America. The phasing out of national EV purchase subsidies in China is a huge headwind, forcing Kandi to pivot to market-driven sales and profitability. Still, local government support for battery-swapping infrastructure, especially for their 'Haoqi' model, is a major tailwind you need to watch.

Economic Factors

Intense price wars in China's EV market are crushing margins, reducing Kandi's average selling price (ASP) and profit. Global supply chain volatility, especially for lithium and semiconductor components, continues to drive up input costs. Also, inflationary pressures in the US market challenge the affordability of Kandi's entry-level EV models, which is their core market. Finally, fluctuations in the Chinese Yuan (RMB) against the US Dollar (USD) directly affect the value of US-derived revenue when it's repatriated.

Sociological Factors

We're seeing an increasing consumer preference in China for smart, high-tech EVs over Kandi's more basic, lower-cost models; that's a tough headwind. But, the growing global demand for sustainable transportation drives long-term market growth for all EV players, which is a clear opportunity. Urbanization in China increases the need for compact, short-range vehicles, which aligns perfectly with Kandi's product focus. The big psychological barrier is still public perception of battery safety and fire risk, which Kandi needs to address head-on.

Technological Factors

Rapid advancements in battery energy density and charging speed put constant pressure on Kandi's older EV platforms. To be fair, Kandi's focus on battery-swapping technology (Battery-as-a-Service, or BaaS) is a clear differentiator, but it requires massive capital expenditure. Competitors are integrating advanced driver-assistance systems (ADAS) and superior in-car software, which Kandi must match to stay relevant. The shift to 800-volt architecture for ultra-fast charging could render Kandi's current charging technology obsolete in the near term.

Legal Factors

Stricter vehicle safety standards and homologation requirements in the US market demand costly redesigns for US market entry, slowing their expansion. Compliance with China's increasingly stringent data privacy and cybersecurity laws for connected vehicles is also a new cost center. Intellectual property (IP) protection challenges are a constant threat, particularly in the competitive Chinese manufacturing sector. Anyway, new regulations on battery recycling and disposal will definitely add to their long-term operational costs.

Environmental Factors

Government mandates for zero-emission vehicles (ZEVs) in major US states and China drive a huge market opportunity for Kandi. Still, there's increased scrutiny on the environmental impact of battery raw material extraction, like cobalt and nickel, which is a supply chain risk. Kandi's battery-swapping model promotes battery longevity and reduces waste, offering a strong environmental selling point. What this estimate hides, though, is the need to source renewable energy for charging stations to truly deliver on the 'green' promise of EVs.

Kandi Technologies Group, Inc. (KNDI) - PESTLE Analysis: Political factors

China's central government maintains significant control over EV production licenses and market access.

The political landscape in China dictates that Kandi Technologies Group, Inc. (KNDI)'s domestic operations are fundamentally tied to central government policy and regulatory approval. The state maintains tight control over electric vehicle (EV) manufacturing qualifications, which means market access isn't just about consumer demand; it's a political decision. Kandi navigates this through its long-standing joint venture (JV) structure, where its subsidiary, Zhejiang Kandi Vehicles Co., Ltd., holds a 22% equity interest in the Affiliate Company, with Geely Group controlling the remaining 78%.

This structure is defintely a necessity, ensuring Kandi can participate in the highly regulated passenger EV market. The company's pivot to off-road vehicles and smart mobility solutions in China is a strategic move to focus on less saturated, high-growth segments where regulatory hurdles may be different from the core passenger EV market.

Ongoing US-China trade tensions create tariff risk for auto parts and finished vehicles imported by Kandi America.

The persistent US-China trade conflict presents a clear and immediate financial risk for Kandi America, the company's US subsidiary. The Trump administration's tariffs have been particularly punitive on Chinese-made electric vehicles, quadrupling the duty from 25% to 100% in 2024. This effectively prices Chinese-made passenger EVs out of the US market, forcing a rapid shift in Kandi's supply chain strategy.

To mitigate this tariff exposure, Kandi is aggressively localizing and diversifying production. This is a clear, actionable response to political risk.

• Opened a manufacturing facility in Garland, Texas, spanning approximately 74,758 square feet, which began assembling the first US-made electric golf cart in May 2025.
• Partnered with Taiwan-based Hartford Industrial Co. for off-road vehicle production, expecting Taiwan to account for up to 40% of Kandi's off-road vehicle production in the 2025 fiscal year.

The impact of the trade spat is tangible: North America saw a 42% contraction in Chinese EV imports during the first nine months of 2025, underscoring the urgency of Kandi's domestic production initiative.

Phasing out of national EV purchase subsidies in China forces a pivot to market-driven sales and profitability.

The era of broad, national EV purchase subsidies in China is over, having officially ended in 2022. This shifts the competitive landscape from one driven by government incentives to one focused on cost-efficiency and product value-a true market-driven environment. The remaining central government support for 2025 is the vehicle trade-in subsidy scheme, which is a different kind of incentive.

Here's the quick math on the remaining incentives for Chinese consumers in 2025:

This policy means Kandi must now compete on price and features, not just on the size of the government rebate. The planned phase-out of the purchase tax rebates by 2027 will further solidify this market-driven reality.

Local government support for battery-swapping infrastructure significantly impacts Kandi's 'Haoqi' business model.

While direct vehicle subsidies are fading, targeted government support for infrastructure remains a huge opportunity for Kandi's battery-swapping business model, operated through its subsidiary Zhejiang Kandi Smart Battery Swap Technology Co., Ltd. ('Haoqi'). The central government is actively promoting battery-swapping technology, particularly in rural areas, to solve range anxiety (the fear that an EV will run out of power before reaching a charging point) and promote EV adoption.

The support is concrete: the central government is backing EV charging and swapping pilot projects in 75 counties in 2025. The financial backing for these local initiatives is substantial, with the highest annual quota per county reaching CNY45 million (approximately $6.2 million). This local-level policy support is a direct tailwind for Kandi's strategy.

Kandi's 2025-2029 strategic plan is capitalizing on this, projecting significant growth in its battery swapping equipment business. The company anticipates producing and selling 100 units of battery swapping equipment in 2025, which is projected to generate $20 million in revenue with gross margins expected to exceed 30%. This government-backed infrastructure push makes the 'Haoqi' model a high-potential segment.

Kandi Technologies Group, Inc. (KNDI) - PESTLE Analysis: Economic factors

Intense price wars in China's EV market reduce Kandi's average selling price (ASP) and profit margins.

The core challenge for Kandi Technologies Group, Inc. in 2025 is the hyper-competitive pricing environment, or 'nei juan' (involution), in the Chinese electric vehicle (EV) sector. You can see this pressure immediately in the top-line numbers: Kandi's total net revenues for the first half of 2025 (H1 2025) dropped to $36.3 million, a sharp 39.3% decline from $59.8 million in the same period of 2024. This revenue contraction, even with a shift toward higher-margin off-road vehicles, points to a significant drop in either sales volume or the Average Selling Price (ASP) of their products.

To be fair, the reported gross margin actually improved to 45.2% in H1 2025, up from 31.7% in H1 2024. But this is not a sign of pricing power; management noted the improvement was driven by a favorable product mix and, critically, the sale of previously impaired inventory. That is a one-time benefit that masks the underlying margin pressure. For context, the broader Chinese automotive industry saw average EV prices drop 5.8% year-on-year by Q1 2025, with overall industry profit margins squeezed down to just 3.9%. Kandi is operating in an environment where major players like BYD are driving relentless price cuts.

Global supply chain volatility, especially for lithium and semiconductor components, drives up input costs.

While Kandi's focus on off-road vehicles offers some insulation from the mainstream passenger EV market, the cost of core EV components remains a major headwind. Lithium prices, a primary input for EV batteries, are recovering in 2025, with demand expected to grow faster than supply in the near term. More immediate and impactful is the geopolitical risk on component costs, especially for products destined for the US market.

New US tariffs, effective November 1, 2025, are expected to significantly increase the cost of Chinese-made EV components and semiconductors, with the total tariff rate on some Chinese goods rising to approximately 130%. This cost surge is already evident in related sectors, where Battery Energy Storage System (BESS) costs have surged by 56% to 69% since January 2025. This is a direct hit to the cost of goods sold for Kandi's imported products, which comprise a significant portion of its revenue.

• Lithium price recovery: Expected to increase raw material costs.
• US Tariffs: Total tariff rate on Chinese goods to rise to ~130% by November 2025.
• BESS Cost Surge: Related battery system costs rose 56% to 69% in 2025.

Inflationary pressures in the US market challenge the affordability of Kandi's entry-level EV models.

Kandi's strategy hinges on the US market, which is projected to account for approximately two-thirds of their vehicle sales from 2025 to 2029. The inflationary pressure here is less about general consumer price index (CPI) and more about the direct, massive cost inflation imposed by trade policy. The new US tariffs on Chinese imports act as a super-inflationary tax on Kandi's imported vehicles and components, drastically challenging the affordability of their typically entry-level, price-sensitive models.

To mitigate this, Kandi is taking clear action: the company plans a $30 million investment in 2025 to establish a US production line for all-terrain vehicles, including golf carts and utility vehicles. This onshoring move is defintely a strategic response to bypass the crippling tariff costs and maintain a competitive price point in the North American market, but it requires significant upfront capital investment.

Fluctuations in the Chinese Yuan (RMB) against the US Dollar (USD) affect the value of US-derived revenue.

As a Chinese exporter with substantial US-derived revenue, Kandi faces significant foreign exchange risk. The consensus forecast for the Chinese Yuan (RMB) against the US Dollar (USD) in 2025 is a fluctuation range between 7.0 and 7.6, with an overall bias toward depreciation pressure on the RMB. This depreciation pressure means that a single US Dollar converts into more RMB, which is a near-term tailwind for the company's RMB-denominated financial statements, effectively boosting the reported value of their US sales.

However, the high volatility, with the USD/CNY rate potentially breaking the 7.40-7.50 range due to escalating trade friction, creates an unpredictable environment. This uncertainty makes hedging foreign currency exposure (the risk management process) more expensive and complex. You need to factor in this volatility, not just the direction, when assessing the stability of their revenue stream.

Kandi Technologies Group, Inc. (KNDI) - PESTLE Analysis: Social factors

You're looking for a clear read on the social currents shaping Kandi Technologies Group, Inc.'s market, and honestly, the picture is a mixed bag. The global push for sustainability is a massive tailwind, but Kandi's core product-the basic, low-cost EV-is fighting a powerful, near-term headwind in its home market: the Chinese consumer's growing appetite for high-tech, smart vehicles. You need to understand this shift to map Kandi's strategic runway.

Increasing consumer preference in China for smart, high-tech EVs over Kandi's more basic, lower-cost models.

The Chinese electric vehicle market is no longer driven by the cheapest price tag; it's about the best technology. A comprehensive survey from the first quarter of 2025 shows that for Chinese consumers, the net stimulus effect from innovation and new product release cycles reached 10.8%. To be fair, that's three times higher than the 3.6% net stimulus generated by aggressive price competition and discounts. This is a critical challenge for Kandi, whose models like the K27 are often marketed as the most affordable, starting around $12,999 after incentives in the US market, focusing on basic urban mobility rather than cutting-edge features.

Chinese consumers are willing to pay for a smart experience. Price wars are delivering diminishing returns.

This preference shift creates a structural disadvantage for Kandi's core value proposition, forcing them to either rapidly invest in costly technology upgrades or retreat further into the niche of ultra-low-cost, short-range utility vehicles.

Growing global demand for sustainable transportation drives long-term market growth for all EV players.

The long-term macro trend is defintely in Kandi's favor. The global shift toward sustainable transportation is accelerating, creating a rising tide that lifts all EV players, including Kandi. By the end of the 2025 fiscal year, the International Energy Agency (IEA) projects that over 20 million new electric cars will be sold worldwide, a figure that represents more than one-quarter of total global car sales. This sustained demand is fueled by consumer awareness and government policy, and it's expanding the entire ecosystem.

Here's the quick math on the near-term growth in the supporting infrastructure:

This massive, compounding growth in the charging market and overall sales volume provides Kandi with a continuously expanding addressable market, even if they only capture the lower-end segment.

Urbanization in China increases the need for compact, short-range vehicles, aligning with Kandi's product focus.

Urbanization remains a powerful social force in China, and it naturally increases the need for smaller, more maneuverable vehicles. China's urbanization rate reached 66.16% in 2023, and it is expected to climb toward 70% in the next five years. This puts more people into dense, congested city centers where parking is difficult and commute distances are relatively short-averaging 11.7km in Beijing and 9.8km in Shanghai.

Kandi's compact models, like the K27 with its 100-mile range, are perfectly positioned for this short-range, city-centric use case. However, what this estimate hides is the local government response: as urban populations surge, authorities are actively rolling out policies to emphasize public transit and mitigate traffic, which can negatively impact overall passenger car sales growth in major cities. So, while the need for compact mobility is there, the policy environment is pushing against private vehicle ownership in megacities.

Public perception of battery safety and fire risk remains a key psychological barrier to EV adoption.

Despite the data, public perception of EV battery safety is still a significant psychological barrier that Kandi and the entire industry must overcome. Headlines about thermal runaway incidents, though rare, create outsized fear. The reality is that internal combustion engine (ICE) vehicles are statistically far more likely to catch fire; for example, one national dataset shows ICE cars having a fire incident rate about 20 times higher than battery-electric and plug-in hybrid vehicles (approximately 77 vs. 3.8 per 100,000 registered vehicles).

This fear translates into concrete costs and consumer hesitation:

• EV fires are harder to extinguish, raising concerns for first responders.
• Perceived risk is driving up costs: some US homeowners are facing insurance premium increases of up to 64% when garaging an EV, as carriers factor in higher repair costs and potential property damage.
• The psychological barrier is a key adoption hurdle, especially for novice buyers who are Kandi's target market.

This barrier is less about the product's actual safety and more about the media narrative, but it's a real-world obstacle Kandi must address in its marketing and product safety certifications.

Kandi Technologies Group, Inc. (KNDI) - PESTLE Analysis: Technological factors

Rapid advancements in battery energy density and charging speed put pressure on Kandi's older EV platforms.

You're seeing an industry-wide sprint on battery technology, and Kandi Technologies Group's legacy EV platforms are defintely feeling the heat. While the company has pivoted its core focus toward off-road vehicles and battery-swapping equipment, the underlying challenge of battery energy density-how much power is packed into a given weight-remains a critical technological risk.

Competitors are consistently pushing new chemistries and thermal management systems to boost range and charging speed. Kandi is trying to keep pace, with its research and development (R&D) expenses increasing by 48.5% in the first half of 2025 compared to the same period in 2024, totaling $2.5 million, specifically targeting battery product research. Still, the market demands a continuous leapfrog, and any older EV platform Kandi still sells faces immediate obsolescence against newer, more efficient designs.

Kandi's focus on battery-swapping technology (Battery-as-a-Service, or BaaS) is a differentiator but requires massive capital expenditure.

The company's strategic shift to Battery-as-a-Service (BaaS) is a smart technological differentiator, especially for commercial fleets, but it's a capital-intensive bet. Instead of racing to build a better battery cell, Kandi is building a better infrastructure solution. This is validated by their subsidiary, China Battery Exchange, becoming a key equipment supplier for Contemporary Amperex Technology Co., Limited's (CATL) massive 'Ten Thousand Station Plan.'

To execute this strategy, Kandi is committing significant capital. For the 2025 fiscal year, the company plans a $100 million investment in the United States to establish a lithium battery manufacturing and battery pack facility with an initial annual capacity of 1 GWh. This is a huge upfront cost, but it's necessary to control the battery supply chain for their swapping ecosystem. Here's the quick math on their 2025 projections for this segment:

Competitors are integrating advanced driver-assistance systems (ADAS) and superior in-car software, which Kandi must match.

In the modern EV market, the car is a computer on wheels. Competitors are rapidly integrating Advanced Driver-Assistance Systems (ADAS)-features like automatic emergency braking and adaptive cruise control-which is quickly becoming a non-negotiable consumer expectation. The global ADAS market is forecast to be worth around $70 billion by 2025, so this is a massive technological area Kandi cannot ignore.

Kandi's response is a strategic push into smart mobility solutions. They are moving to acquire Hangzhou Honghu Intelligent Driving Technology Co., Ltd. to gain immediate access to autonomous driving, mapping, and dispatching technologies, primarily for the ride-sharing market in China. This acquisition is crucial because it gives them a fast-track into the software-defined vehicle space. The projected annual revenue for Kandi's smart mobility solutions business in 2025 is $24.37 million.

The shift to 800-volt architecture for ultra-fast charging could render Kandi's current charging technology obsolete.

The industry's move to 800-volt (800V) architecture is a fundamental technological shift that allows for supercharging beyond 350kW, reducing charging times by as much as 50% compared to the traditional 400V systems. This high-voltage architecture is no longer just for premium brands; it is expected to become a mainstream standard in China by 2025.

In China, the penetration rate of passenger cars with 800V architecture is expected to rise to 9.5% in 2025. This trend is a clear threat to Kandi's traditional 400V charging technology, but their BaaS strategy acts as a technological hedge. If a customer can swap a battery in under 90 seconds, the 800V advantage of a 15-minute charge is largely neutralized for high-utilization fleets. The risk remains, however, for any Kandi passenger EV that relies on standard plug-in charging. They are essentially betting on the following technological pathways:

• Bypass slow charging with 90-second battery swaps.
• Focus on off-road vehicles, where 800V is less critical.
• Invest in new battery production to control the power source.

Kandi Technologies Group, Inc. (KNDI) - PESTLE Analysis: Legal factors

Stricter vehicle safety standards and homologation requirements in the US market demand costly redesigns for US market entry.

The biggest legal hurdle for Kandi Technologies Group, Inc. in the US remains full compliance with Federal Motor Vehicle Safety Standards (FMVSS) for highway-legal vehicles, even as the company pivots to off-road products. To be fair, Kandi's current focus on electric off-road vehicles (ORVs)-like golf carts and Utility Terrain Vehicles (UTVs)-mitigates some of the most complex passenger vehicle regulations, but the compliance burden is defintely still significant.

The prior regulatory misstep with the Securities and Exchange Commission (SEC) in 2023, which resulted in a $710,000 civil penalty for misleading statements about meeting all US safety standards, serves as a stark reminder of the cost of non-compliance. Now, the company is tackling this head-on by investing heavily in US-based manufacturing and R&D. Here's the quick math: Research and Development (R&D) expenses jumped 48.5% to $2.5 million in the first half of 2025, with a stated focus on 'new electric off-road vehicle model development.' This R&D increase is essentially the cost of engineering for US-specific safety and quality compliance, plus the investment of $130 million planned for new US production lines to streamline homologation and mitigate tariff risks.

Compliance with China's increasingly stringent data privacy and cybersecurity laws for connected vehicles.

Kandi's strategic push into 'smart mobility' and connected battery swap infrastructure in China runs straight into the country's increasingly stringent data security regime. The government is not messing around here. New regulations in 2025, like the draft CBDT Guidelines for Automotive Data released in June 2025, mandate strict controls over vehicle-generated data, which includes everything from GPS coordinates to driver behavior.

The compliance cost is high because it requires a complete overhaul of data governance (how data is collected, stored, and transferred). Furthermore, the US Department of Commerce's Final Rule on Connected Vehicles, effective in March 2025, creates an immediate, massive legal risk for Kandi's future connected vehicle exports. This rule prohibits the sale of connected vehicles in the US by manufacturers with a nexus to China if they incorporate certain hardware or software, effectively creating a technological and legal barrier to the North American market for its connected EV ecosystem.

The table below outlines the dual-market data compliance challenge:

Intellectual property (IP) protection challenges, particularly in the competitive Chinese manufacturing sector.

In the Chinese EV and off-road vehicle market, IP protection is a constant, expensive battle. While Kandi highlights a 'solid intellectual property portfolio' for its product differentiation, defending that portfolio against infringement-especially in a sector characterized by rapid replication-is a drain on resources.

The legal costs for IP are typically embedded in the General and Administrative (G&A) expenses, which totaled $11.3 million in the first half of 2025. Given the company's pivot toward high-tech areas like battery swap systems and intelligent golf caddy robots (a collaboration announced in June 2025), the need for patent and trade secret protection is escalating. Any major infringement lawsuit could easily consume a significant fraction of its current net income of $1.7 million (H1 2025), so proactive defense is paramount.

New regulations on battery recycling and disposal will add to the long-term operational costs.

The regulatory environment for electric vehicle battery end-of-life management is tightening globally, and China is leading the charge. This is a clear long-term cost driver for Kandi, especially with its battery swap business. The China Electronics Energy Saving Technology Association estimates that the volume of retired EV batteries in China will reach 820,000 tons in 2025. That's a huge volume, and automakers are legally responsible for its compliant collection and disposal.

New national standards for battery recycling, including specifications for 'black mass' (recycled material), took effect in July 2025, forcing companies to adhere to much higher recovery rates-some firms are already achieving recovery rates of 99.6% for nickel, cobalt, and manganese. Kandi's increased R&D spending on 'battery products' in H1 2025 is a direct reflection of the upfront investment needed to comply with these new rules:

• Develop reverse logistics networks for battery collection.
• Invest in new battery design for easier dismantling and material recovery.
• Partner with certified recycling entities to meet the material recovery mandates.

What this estimate hides is the future financial provision (a liability on the balance sheet) Kandi will eventually need to accrue for the disposal of the thousands of batteries currently in use under its battery swap and vehicle sales models. Finance: draft a 13-week cash view by Friday that explicitly models a 5% increase in G&A for Q4 2025 to cover escalating legal and compliance costs in both the US and China.

Kandi Technologies Group, Inc. (KNDI) - PESTLE Analysis: Environmental factors

Government mandates for zero-emission vehicles (ZEVs) in major US states and China drive market opportunity.

The regulatory environment is defintely pushing Kandi Technologies Group into a high-growth sector, even with some political headwinds in the US. In the US, the most aggressive Zero-Emission Vehicle (ZEV) mandates, based on California's Advanced Clean Cars I rules, require automakers to ensure that 22% of their new passenger vehicle sales for Model Year (MY) 2025 are ZEVs. This compliance requirement, which is adopted by a coalition of states, creates a guaranteed market floor for electric vehicles (EVs) and the infrastructure that supports them.

More critically, Kandi's primary market, China, continues its aggressive push for New Energy Vehicles (NEVs). While specific 2025 mandate percentages are complex, the entire policy framework is geared toward achieving carbon neutrality by 2060. The sheer scale of the Chinese EV charging infrastructure market is projected to expand from \$25.6 billion in 2025 to over \$182.9 billion by 2030, a clear financial opportunity for Kandi's infrastructure-focused subsidiary, China Battery Exchange.

Here's the quick look at key ZEV targets:

Increased scrutiny on the environmental impact of battery raw material extraction, like cobalt and nickel.

The environmental benefit of an EV is only as good as its supply chain, and right now, that chain is under intense scrutiny. The extraction of critical battery minerals like cobalt and nickel, primarily sourced from the Democratic Republic of Congo (DRC) and Indonesia, faces significant criticism over environmental damage and social governance issues. For example, nickel mining in Indonesia often relies on coal-powered processing, which undermines the climate goals of the final EV product.

This risk is driving a major industry shift toward Lithium Iron Phosphate (LFP) batteries, which contain no cobalt or nickel. LFP batteries, which made up less than a tenth of the global electric car market in 2020, have surged to nearly half of the market by 2024, a trend expected to continue. This shift is a direct response to the environmental and ethical concerns, plus the price volatility of these metals. As of January 15, 2025, the average price for refined cobalt was still high at \$19,684.68/mt, and nickel was at \$15,518.99/mt, reinforcing the cost and supply chain risks associated with nickel-cobalt-manganese (NMC) chemistries.

Kandi's battery-swapping model promotes battery longevity and reduces waste, offering a strong environmental selling point.

Kandi's battery-swapping technology, which is now central to its business through the China Battery Exchange subsidiary and its partnership with CATL, is a powerful environmental differentiator. Unlike traditional charging, a battery-swapping network allows for centralized, optimal battery management, which extends the life of the battery pack and reduces waste. The company itself believes that battery swapping is the most effective way to achieve genuine energy savings and environmental benefits by harnessing off-peak electricity.

The environmental advantages are clear:

• Longevity: Centralized thermal management in a swap station is better than individual vehicle cooling, leading to a longer overall battery lifespan.
• Second-Life Use: Swapping facilitates easier collection and repurposing of retired vehicle batteries for stationary energy storage, reducing waste.
• Material Recovery: Kandi has already demonstrated a commitment to end-of-life management, with a battery recycling program achieving a 92% material recovery rate.

The partnership with CATL, which aims to deploy 500 swap stations in 2025 alone, quickly scales this environmentally-friendly model. That's a massive, tangible move toward a circular battery economy.

The need to source renewable energy for charging stations to truly deliver on the 'green' promise of EVs.

An EV is only as clean as the electricity grid that charges it. If the power comes from a coal-fired plant, the vehicle's 'tailpipe emissions' are simply moved to the power station. This reality makes the integration of renewable energy into charging and swapping infrastructure a critical environmental factor for Kandi.

The industry trend for 2025 is a sharp focus on integrating on-site solar (photovoltaic or PV) and battery storage systems directly into charging hubs to improve grid resilience and ensure a cleaner energy source. The global market for dedicated solar-powered EV charging stations is projected to reach \$220.4 million in 2025, showing real investment in this solution. For Kandi, this means the massive network of swap stations being rolled out-with CATL targeting over 10,000 stations by 2030-must prioritize renewable energy sourcing to maximize the environmental selling point of its infrastructure.

The best action is to look for direct Power Purchase Agreements (PPAs) with renewable energy providers or on-site solar installations at every new swap station. For example, some European charging networks are already committing to powering their hubs entirely with 100% green electricity. Kandi needs to make this a core part of its China Battery Exchange rollout strategy.