Microvast Holdings, Inc. Securities Class Action Lawsuit Update | Microvast Holdings, Inc.

• Company: Microvast Holdings, Inc. (NASDAQ: MVST)
• Lead Plaintiff Deadline: September 21, 2026
• Class Period: April 1, 2025 - March 16, 2026
• Stock Drop: June 25, 2025 - MVST fell as much as $0.40 (approximately 10.23%) before closing at $3.90; August 4, 2025 - MVST fell $0.30 (approximately 9.93%) to $2.72; November 11, 2025 - MVST fell $0.50 (approximately 10%) to $4.48; March 17, 2026 - MVST fell $0.79 (34.2%) to $1.52
• Lawsuit Type: Securities Class Action

Introduction

A securities class action lawsuit was filed on July 21, 2026 in the United States District Court for the Southern District of Texas on behalf of investors who purchased or otherwise acquired Microvast Holdings, Inc. securities between April 1, 2025 and March 16, 2026, inclusive. The complaint names Microvast, founder, Chairman, and Chief Executive Officer Yang Wu, former Chief Financial Officer Fariyal Khanbabi, former Chief Financial Officer Carl T. Schultz, and Chief Financial Officer Rodney Worthen as defendants.

The Microvast shareholder lawsuit centers on a simple but consequential tension. Microvast told investors that its Huzhou Phase 3.2 expansion was moving toward late-2025 production, while also promoting gross margin targets built on operational efficiency, higher-value products, and a strategic shift away from lower-margin business. Investors bought into a growth story powered by capacity expansion, EMEA demand, and margin discipline.

According to the complaint, the hidden reality was more fragile. Inventory management issues, delays in customer commercial vehicle rollouts, and slippage in the Huzhou timeline allegedly undermined the very targets Microvast was touting. The first cracks appeared with a short seller report in June 2025, followed by an abrupt CFO departure, then a delayed Huzhou production update, and finally a steep margin collapse tied to specialized ESS inventory impairment charges.

By March 2026, the story had changed sharply. What had been presented as a path toward sustainable profitability and capacity-led growth allegedly gave way to missed margin expectations, customer ramp delays, and production milestones pushed into 2026. MVST shares fell after each disclosure, culminating in a 34.2% decline on March 17, 2026.

Backdrop and Business Context

Microvast was founded in 2006 by Yang Wu, who remains the company’s founder, Chairman, and Chief Executive Officer. The company is headquartered in Stafford, Texas, and its manufacturing operations include facilities in Huzhou, China. It later became publicly traded through a July 2021 business combination with Tuscan Holdings Corp., with Microvast common stock beginning to trade on Nasdaq under MVST. The transaction raised roughly $822 million in gross proceeds and positioned the company to fund manufacturing expansion across China, Germany, and the United States.

Microvast designs, develops, and manufactures lithium-ion battery cells, modules, packs, and related components for commercial electric vehicles and energy storage systems. Its model is industrial and product-based. Revenue comes primarily from selling battery systems to original equipment manufacturers, vehicle platform customers, energy storage developers, and industrial users rather than from subscriptions or consumer sales. The company has described operations across the United States, China, and Germany, with major manufacturing tied to Huzhou, China and other facilities. Microvast reported full-year 2025 revenue of approximately $427.5 million, while the complaint cites fourth-quarter 2025 revenue of $96.5 million.

Microvast operates in an intensely competitive battery market and states that many competitors have significantly greater resources. The company identifies major manufacturers including Panasonic, Samsung SDI, BYD, CATL, and LG Chem among its competitors. That competitive landscape makes execution important. According to the complaint, Microvast's alleged vulnerability was that its public story depended on Huzhou Phase 3.2 capacity coming online in 2025 and on margin targets that were exposed to customer rollout delays and inventory management problems.

Promises Made vs. Reality

At the start of the Class Period, Microvast presented investors with a manufacturing and margin story. In its FY 2024 earnings release, the company quoted Yang Wu as saying Microvast was underway with its Huzhou Phase 3.2 expansion and expected the additional capacity to be online in the fourth quarter of 2025. Wu also described a growing backlog, demand for Microvast technology, and a continuing focus on sustainable profitability.

On the same earnings call, Wu gave investors more detail, stating that cleanroom utilities and equipment installation were underway and that Microvast anticipated "first qualified production" from the new Huzhou line in the fourth quarter of 2025. Fariyal Khanbabi, then the company's CFO, emphasized margin strength, attributing fourth-quarter 2024 gross profit improvement to "operational efficiencies, increased utilization and disciplined cost control implementation." She also described a "strategic repositioning away from low-margin segments" and a focus on "more profitable, higher-value opportunities."

The message continued into May 2025. Microvast's first-quarter 2025 press release reiterated a full-year gross margin target of 30% and targeted "first qualified products" from Huzhou Phase 3.2 in the fourth quarter of 2025. During the Q1 earnings call, Wu assured investors that Huzhou Phase 3.2 was "on track," describing clean rooms as nearly completed, utility equipment installation as complete, and production equipment installation as underway. Even while acknowledging global supply chain uncertainty and trade disruptions that had affected certain light commercial vehicle platform rollout timelines, Wu reaffirmed revenue guidance and a full-year gross margin target of approximately 30%.

After the first alleged corrective disclosure and an abrupt CFO departure, Microvast allegedly kept reinforcing the same margin narrative. In August 2025, Wu described second-quarter results as evidence of "increasing demand" and the company's "relentless focus on profitability and operational efficiency." Worthen attributed profitability to "operational execution, increased utilization and cost controls," while Wu raised the gross margin target from 30% to 32% and again said the Huzhou Phase 3.2 expansion was expected to come online later that year.

The complaint alleges that the Huzhou timeline began to unravel in November 2025. Microvast's Q3 earnings release stated that the company expected to finish installation and commissioning of production equipment by year-end with initial production to follow. On the Q3 call, Wu stated for the first time that initial production was expected to begin in Q1 2026. Yet Microvast also continued to emphasize margin strength, with Wu claiming that third-quarter gross margin reflected "continued improvements in efficiency and product mix" and raising the full-year gross margin outlook to a range of 32% to 35%.

The final alleged truth emerged in March 2026. Microvast reported that fourth-quarter gross margin had declined to approximately 1%, down from approximately 36% in the prior-year period, and attributed the change to inventory impairment charges. Worthen later specified that the impairment charge related to specialized ESS components, and the company's Form 10-K stated that the $32.5 million impairment involved ESS inventory specifically manufactured for a customer that did not generate associated revenue during 2025. As alleged in the complaint, Microvast's public statements overstated its ability to meet margin targets and complete the Huzhou Phase 3.2 expansion by year-end 2025 while failing to disclose material adverse facts about inventory management issues and customer platform delays.

Timeline of Alleged Misconduct and Disclosures

Class Period: April 1, 2025 -- March 16, 2026, inclusive.

• March 31, 2025: Microvast filed its FY 2024 Form 10-K and issued its FY 2024 earnings release. Wu stated that the additional capacity from the Huzhou Phase 3.2 expansion was expected to come online in the fourth quarter of 2025 and described achieving sustainable profitability as a core focus.
• April 1, 2025: Class Period begins. During Microvast’s FY 2024 earnings call, Wu stated that the company anticipated first qualified production from Huzhou Phase 3.2 in the fourth quarter of 2025. Khanbabi attributed the company’s margin improvement to operational efficiencies, increased utilization, and disciplined cost controls.
• April 9, 2025: Microvast announced the appointment of Carl T. Schultz as CFO, with his tenure beginning later that month.
• May 12, 2025: Microvast filed its Form 10-Q for the quarter ended March 31, 2025, issued its Q1 2025 earnings release, and held its Q1 earnings call. The company reiterated a full-year gross margin target of approximately 30% and targeted first qualified products from Huzhou Phase 3.2 in the fourth quarter of 2025. Wu stated that the expansion was “on track,” while also acknowledging that global supply-chain uncertainty and trade disruptions had affected rollout timelines for certain light commercial vehicle platforms.
• June 25, 2025: Alleged Corrective Disclosure. Grizzly Research issued a report alleging that Microvast was “fabricating a significant part of its business and capabilities,” including by overstating activity at production facilities such as Huzhou and overstating prospective economic opportunities from commercial partnerships. Following the report, MVST fell as much as $0.40 per share, or approximately 10.23%, during intraday trading before closing at $3.90.
• August 1, 2025: Alleged Corrective Disclosure. Microvast announced that Schultz had ceased to be employed as CFO on July 29, 2025, just over three months after joining the company.
• August 4, 2025: Market reaction. MVST fell $0.30 per share, or approximately 9.93%, to close at $2.72.
• August 7, 2025: Rodney Worthen began serving as interim CFO.
• August 11, 2025: Microvast issued its Q2 2025 earnings release and held its Q2 earnings call. Wu described the company’s results as evidence of increasing demand and its focus on profitability and operational efficiency. Worthen attributed profitability to operational execution, increased utilization, and cost controls. Wu raised the full-year gross margin target from 30% to 32% and reiterated that Huzhou Phase 3.2 was expected to come online later in 2025.
• November 10, 2025: Alleged Corrective Disclosure. Microvast filed its Q3 2025 Form 10-Q, issued its Q3 earnings release, and held its Q3 earnings call. The company stated that installation and commissioning of Huzhou Phase 3.2 production equipment were expected to finish by year-end, with initial production to follow. Wu stated that initial production was expected to begin in the first quarter of 2026. At the same time, Microvast raised its full-year gross margin target to a range of 32% to 35% and attributed third-quarter gross margin performance to continued improvements in efficiency and product mix.
• November 11, 2025: Market reaction. MVST fell $0.50 per share, or approximately 10%, to close at $4.48.
• January 7, 2026: Worthen was appointed CFO on a non-interim basis.
• March 16, 2026: Alleged Corrective Disclosure. Microvast filed its FY 2025 Form 10-K, issued its FY 2025 earnings release, and held its FY 2025 earnings call. The company reported fourth-quarter revenue of $96.5 million, below the consensus estimate cited in the complaint, and gross margin of approximately 1% due primarily to inventory impairment charges. Worthen stated that a $32.5 million inventory impairment charge related to specialized ESS components. Wu stated that trial production had begun for part of one product and that the company was on track to achieve serial production from Huzhou Phase 3.2 in 2026.
• March 17, 2026: Market reaction. MVST fell $0.79 per share, or 34.2%, to close at $1.52.

Investor Harm and Market Reaction

The most severe alleged market reaction occurred after Microvast disclosed its fourth-quarter and full-year 2025 results. On March 16, 2026, the company reported that fourth-quarter gross margin had dropped to approximately 1%, compared with approximately 36% in the prior-year period, and that revenue fell short of the consensus estimate cited in the complaint. Microvast attributed the revenue result to regulatory shifts in South Korea and customer platform ramp-up delays in EMEA. On March 17, 2026, MVST fell $0.79 per share, or 34.2%, to close at $1.52.

Earlier disclosures had already pressured the stock. On June 25, 2025, following the Grizzly Research report, MVST fell as much as $0.40 per share, or approximately 10.23%, during intraday trading before closing at $3.90. The report alleged that Microvast overstated facility activity and commercial partnership opportunities, including issues tied to the Huzhou facility.

The next decline followed the sudden departure of CFO Carl T. Schultz. Microvast announced on August 1, 2025 that Schultz had ceased to be employed as CFO on July 29, 2025, just over three months after joining the company. On August 4, 2025, MVST fell $0.30 per share, or approximately 9.93%, to close at $2.72. A third major drop followed the November 2025 Huzhou update. After Microvast disclosed that initial production for Huzhou Phase 3.2 would begin in Q1 2026, rather than the late-2025 timing investors had allegedly been led to expect, MVST fell $0.50 per share, or approximately 10%, to close at $4.48 on November 11, 2025. The complaint alleges these declines damaged investors who purchased or otherwise acquired Microvast securities at artificially inflated prices during the Class Period.

Litigation & Procedural Posture

The complaint asserts claims under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 against all defendants, and Section 20(a) of the Exchange Act against the Individual Defendants. The lawsuit seeks damages for investors who purchased or otherwise acquired Microvast securities during the Class Period and were damaged after the alleged corrective disclosures.

Defendants are Microvast Holdings, Inc., Yang Wu (Founder, Chief Executive Officer, and Chairman of the Board), Fariyal Khanbabi (Chief Financial Officer from the start of the Class Period until April 7, 2025), Carl T. Schultz (Chief Financial Officer from April 21, 2025 to July 29, 2025), and Rodney Worthen (Interim Chief Financial Officer from August 7, 2025 until January 7, 2026, and Chief Financial Officer from January 7, 2026 through the remainder of the Class Period).

Scienter allegations center on defendants' alleged knowledge of the status of the Huzhou Phase 3.2 expansion and the risks to Microvast's margin targets. The complaint alleges that the Individual Defendants had access to material nonpublic information by virtue of their senior roles and control over SEC filings, press releases, and market communications. The complaint does not cite confidential witnesses or allege insider sales.

Procedurally, the case is newly filed as a proposed class action under Federal Rule of Civil Procedure 23 in the Southern District of Texas. The complaint demands a jury trial and seeks class certification, damages, interest, attorneys' fees, expert fees, costs, and other relief. Lead plaintiff submissions are due September 21, 2026.

How to Check Whether You May Be Eligible for the Microvast Holdings, Inc. (MVST) Class Action

• Confirm you purchased MVST shares during the April 1, 2025 to March 16, 2026 class period
• Review the allegations and eligibility requirements in the pending securities class action
• Gather trade confirmations and brokerage records documenting purchases or losses
• Consult counsel regarding the lead plaintiff deadline, eligibility, and any potential rights in the litigation

Disclaimer: Attorney Advertising. This shareholder alert is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for personalized guidance. Prior results do not guarantee similar outcomes.