U Power Net Loss Widens to RMB97.6 Million as Revenue Falls

U Power (UCAR ) reported unaudited first-half results on November 6, 2026, showing a net loss of RMB97.6 million (US$14.4 million), compared with RMB27.4 million a year earlier, as weaker revenue and margins coincided with a sharp increase in expansion-related spending.

Total net revenue for the six months ended June 30, 2026 fell 16.5% to RMB14.8 million (US$2.2 million) from RMB17.7 million. Gross profit declined 56.8% to RMB3.6 million from RMB8.4 million, cutting gross margin to 24.5% from 47.3%. The steeper fall in gross profit than in revenue underlines how sales mix and station procurement costs worsened the effect of lower sales.

Battery-swapping station sales supplied RMB13.5 million, down 3.1% from RMB13.9 million, and represented 91.0% of total net revenue. No sourcing-services revenue was recorded, against RMB2.8 million in the first half of 2025, because vehicles procured during the period had not been sold by June 30. Chief executive and chairman Jia Li linked that timing to Thailand trucks that were not delivered to customers until July.

Combined battery-swapping services revenue increased 30.2% to RMB1.3 million from RMB1.0 million, driven by two-wheeled services, but accounted for only 9.0% of total revenue. Gross margin also reflected the absence of higher-margin station sales by Thai subsidiary U SWAP that occurred a year earlier, three additional station sales at lower margins and higher per-unit procurement costs.

Expansion Costs Drive the Wider Loss

Operating expenses rose 224.1% to RMB83.8 million from RMB25.9 million. General and administrative spending increased 161.5% to RMB64.2 million from RMB24.6 million. This included approximately RMB11.7 million spent identifying potential investment targets, about RMB11.2 million of consulting and other Thailand-localization fees and approximately RMB5.1 million of operating and maintenance costs for new business. Newly added subsidiaries also incurred operating and maintenance costs.

The period carried a RMB15.2 million provision for expected credit losses, compared with a RMB3.9 million reversal a year earlier. Interest expense increased to RMB9.0 million from RMB0.2 million because of loan interest and bank charges. Those increases help explain why a relatively modest revenue decline accompanied a much wider loss. Net loss attributable to U Power shareholders was RMB75.5 million, compared with RMB22.0 million.

Equity Funding Supports Liquidity

Cash and cash equivalents rose to RMB54.9 million at June 30 from RMB22.0 million at December 31, 2025, while working capital increased to RMB123.3 million from RMB65.5 million. U Power received RMB207.2 million from issuing ordinary shares during the first half, making equity funding central to the improvement in liquidity. In August 2026, after the reporting period, it completed a further US$16 million private placement with four existing shareholders.

Second-Half Execution Becomes the Focus

In Thailand, U Power completed production of the first 30 battery-swapping heavy-duty trucks for Whale Logistics (Thailand) under a December 2025 partnership covering deployment of up to 1,000 electric truck tractors. The batch arrived in Thailand in June 2026 and was delivered in July 2026. Construction of the first supporting battery-swapping station is under way, with delivery expected in the second half of 2026.

In Hong Kong SAR, foundation work began for the first MAXUS MIFA 7 battery-swapping taxi station at Container Terminal 9, Tsing Yi. The first arriving vehicles received Transport Department type approval in August 2026, clearing them for sale. U Power expects to begin trial swapping services and deliver MIFA 7 vehicles to taxi companies by the end of 2026.

An April 2026 joint venture with Guofu Hydrogen Energy (Hong Kong) Development and Cloud Digital Chain extends that project pipeline into AI-driven energy management for data centers. In May 2026, the venture agreed with CEWA Group and Jiangsu Guofu Hydrogen Energy Equipment to develop an integrated energy solution for a planned 100 MW data center in Rayong, Thailand, beginning with a 3 MW pilot.

“Our focus for the second half of the year is on converting our project pipeline into deliveries and recurring revenue, including our battery-swapping heavy-duty truck project in Thailand and our battery-swapping taxi project in Hong Kong SAR,” Li said.

The first-half results make that conversion the central operational test. Services are growing, but station sales still dominate revenue, while equity issuance is supporting liquidity as administrative, credit and interest costs rise. Progress in Thailand and Hong Kong is now the clearest test of whether U Power can broaden revenue beyond station sales while absorbing the costs of expansion.