10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023

or

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number 001-33997

KANDI TECHNOLOGIES GROUP, INC.

(Exact name of registrant as specified in charter)

Delaware	90-0363723
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
Jinhua New Energy Vehicle Town Jinhua, Zhejiang Province People’s Republic of China	321016
(Address of principal executive offices)	(Zip Code)

(86 - 579) 82239856

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	KNDI	NASDAQ Global Select Market

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐  No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐  No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒   No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒   No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐   No ☒

The aggregate market value of voting and non-voting common stock held by non-affiliates of the registrant as of June 30, 2023, the last business day of the registrant’s second fiscal quarter, was approximately $237,630,412.80.

The number of shares of common stock issued and outstanding as of March 8, 2024 was 87,542,800 and 87,358,234, respectively.

DOCUMENTS INCORPORATED BY REFERENCE:

None.

TABLE OF CONTENTS

PART I		1
Item 1.	Business.	2
Item 1A.	Risk Factors.	12
Item 1B.	Unresolved Staff Comments.	36
Item 1C.	Cybersecurity.	36
Item 2.	Properties.	36
Item 3.	Legal Proceedings.	39
Item 4.	Mine Safety Disclosures.	39
PART II		40
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase Equity Securities.	40
Item 6.	[Reserved]	41
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	41
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk.	51
Item 8.	Financial Statements and Supplementary Data.	F-1
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.	52
Item 9A.	Controls and Procedures.	52
Item 9B.	Other Information.	53
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.	53
PART III		54
Item 10.	Directors, Executive Officers and Corporate Governance.	54
Item 11.	Executive Compensation.	58
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	62
Item 13.	Certain Relationships and Related Transactions and Director Independence.	63
Item 14.	Principal Accounting Fees and Services.	64
PART IV		65
Item 15.	Exhibits, Financial Statement Schedules.	65
SIGNATURES		68

i

SPECIAL NOTE REGARDING FORWARD -LOOKING STATEMENTS

This Annual Report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as “anticipate,” “expect,” intend,” “plan,” “will,” “we believe,” “our company believes,” management believes” and similar language. These forward-looking statements are based on our current expectations and are subject to certain risks, uncertainties and assumptions, including those set forth in the discussion under Item 1, “Business”, Item 1A, “Risk Factors” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our actual results may differ materially from results anticipated in these forward-looking statements. We base our forward -looking statements on information currently available to us, and we assume no obligation to update them. In addition, our historical financial performance is not necessarily indicative of the results that may be expected in the future and we believe such comparisons cannot be relied upon as indicators of future performance.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

ii

PART I

Except as otherwise indicated in this Annual Report, references to

● “China”, or “PRC” refers to the People’s Republic of China.

● “China Battery Exchange” refers to China Battery Exchange (Zhejiang) Technology Co., Ltd.

● “Continental” refers to Continental Development Limited

● “Fengsheng” refers to Fengsheng Automotive Technology Group Co., Ltd., formerly known as Zhejiang Kandi Electric Vehicles Co., Ltd.

● “Hengrun” refers to Hunan Hengrun Automobile Co., Ltd.

● “Hainan Kandi Holding” refers to Hainan Kandi Holding New Energy Technology Co., Ltd.

● “Jiangxi Huiyi” refers to Jiangxi Province Huiyi New Energy Co., Ltd.

● “Kandi BVI” refers to Kandi Technologies Group, Inc., a British Virgin Islands company.

● “Kandi Innovation” refers to Kandi Electric Innovation, Inc., a Nevada company.

● “Kandi Hainan” refers to Kandi Electric Vehicles (Hainan) Co., Ltd.

● “Kandi Canada” refers to Kandi Technologies Canada, Inc.

● “NGI” refers to Northern Group, Inc.

● “Kandi Investment” refers to Kandi America Investment, LLC.

● “Kandi New Energy” refers to Jinhua Kandi New Energy Vehicles Co., Ltd.

● “Kandi Technologies” refers to Kandi Technologies Group, Inc., a Delaware company.

● “Kandi Smart Battery Swap” refers to Zhejiang Kandi Smart Battery Swap Technology Co., Ltd., formerly known as Jinhua An Kao Power Technology Co., Ltd., or “Jinhua An Kao”.

● “PRC operating entities” refers to Kandi Technologies’ subsidiaries, including Zhejiang Kandi Technologies, China Battery Exchange, Kandi New Energy, Kandi Smart Battery Swap, Yongkang Scrou, Kandi Hainan, Jiangxi Huiyi, and Hainan Kandi Holdings New Energy Technology, Co., Ltd.

● “RMB” and “Renminbi” both refer to the legal currency of China.

● “Ruiheng” refers to Zhejiang Ruiheng Technology Co., Ltd.

● “SC Autosports” refers to SC AutoSports, LLC., formerly known as Sportsman Country, LLC

● “US$”, “U.S. dollars”, “$”, and dollars” all refer to the legal currency of the United States.

● “We,” “us,” “our,” “Kandi,” or the “Company” are to the combined businesses of Kandi Technologies Group, Inc.

● “Yongkang Scrou” refers to Yongkang Scrou Electric Co., Ltd.

● “Zhejiang Kandi Technologies” refers to Zhejiang Kandi Technologies Group, Co. Ltd., formerly known as Zhejiang Kandi Vehicles Co., Ltd., or “Kandi Vehicles”.

Kandi Technologies use U.S. dollars as reporting currency in our financial statements and in this Annual Report. Monetary assets and liabilities denominated in Renminbi are translated into U.S. dollars at the rates of exchange as of the balance sheet date, equity accounts are translated at historical exchange rates, and revenues, expenses, gains and losses are translated using the average rate for the period. In other parts of this Annual Report, any Renminbi denominated amounts are accompanied by translations. We make no representation that the Renminbi or U.S. dollar amounts referred to in this Annual Report could have been or could be converted into U.S. dollars or Renminbi, as the case may be, at any particular rate or at all. The PRC government restricts or prohibits the conversion of Renminbi into foreign currency and foreign currency into Renminbi for certain types of transactions.

1

Item 1. Business Introduction

Our Core Business

Kandi Technologies is a Delaware holding company, with its common stock being traded on the NASDAQ Global Select Market. As a holding company with no material operations of its own, a substantial majority of the operations are conducted through our wholly-owned subsidiaries established in the People’s Republic of China, or the PRC, including Zhejiang Kandi Technologies and its subsidiaries and U.S. wholly-owned subsidiaries SC Autosports and its subsidiary.

Originally, the Company’s primary business operations consist of designing, developing, manufacturing and commercializing electric vehicle (“EV”) products and EV parts. In recent years, some EV enterprises in China are seizing market share at the cost of huge losses. The Company realized that the EV market of China has not reached a healthy and orderly development stage. Therefore, the Company started to adjust the company’s development strategy after 2020. With the global trend of “fuel to electrification” of off-road vehicles becoming more and more obvious, the Company has been focusing on the production of pure electric off-road vehicles. Our goal is to achieve a leading position in the field of pure electric off-road vehicles within three years.

The Company does not believe that our major business is within the targeted areas of concern by the Chinese government. However, Kandi Technologies is a holding company in Delaware and our majority of business is conducted through the operations by Company’s subsidiaries and pre-existed VIE in the PRC. Therefore, there is a risk that the Chinese government may in the future seek to affect operations of any company with any level of operations in the PRC, including its ability to offer securities to investors, list its securities on a U.S. or other foreign exchange, conduct its business or accept foreign investment. Additionally, we are subject to certain legal and operational risks associated with our operations in China. PRC laws and regulations governing our current business operations are uncertain, and therefore, these risks may result in a material change in the Company’s operations, significant depreciation of the value of our common stock, or a complete hindrance of our ability to offer or continue to offer our securities to investors. Due to the fact that PRC does not have treaties providing for the reciprocal recognition and enforcement of judgments of courts with the United States and many other countries and regions, direct recognition and enforcement in PRC of judgments of a court in any of these non-PRC jurisdictions in relation to any matter not subject to a binding arbitration provision may be difficult, time-consuming, costly or even impossible, the investors may even need to sue again in one of the courts under PRC jurisdiction. Therefore, our investors may experience difficulties in effecting service of legal process, enforcing judgements or bringing original actions based on United States or foreign laws against us or our management. Changes in currency conversion policies in China and fluctuation in exchange rates may also have a material adverse effect on our business and the value of our securities. During the previous few decades, the economy of China had experienced unprecedented growth. This growth has slowed in the recent years, and if the growth of the economy continues to slow or if the economy contracts, our financial condition may be materially and adversely affected. Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. Since these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact of such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments and list on an U.S. or other foreign exchange.

2

For a more detailed description of the risks regarding our business structure, please see “Risks Related to Doing Business in China” in pages 22-29. It is still unclear about the scope and the impact of these new regulations, however, these risks could result in a material change in the value of our securities or cause the value of our securities to significantly decline or be worthless.

Our Organizational Structure

The Company’s organizational chart as of the date of this report is as follows:

Please refer to the discussion in NOTE 1 - ORGANIZATION AND PRINCIPAL ACTIVITIES of the Notes to the Consolidated Financial Statements under Item 8 of this Annual Report for a narrative of our organization structure and operating subsidiaries, including their dates of incorporation and history.

Reincorporation

On December 27, 2023, the shareholders of the Company approved the merger agreement and plan of merger, that the Company is to merge with and into Kandi BVI, with Kandi BVI as the surviving company upon the merger becoming effective in the second quarter of 2024 (the “Reincorporation”).

Industry Overview

Over the years, governments and the automobile manufacturers have reached a consensus on the importance of diversifying the automobile industry and utilizing various energy resources. China is one of the world’s largest automobile markets as China has relatively scarce fuel reserves but rich natural resources of electric power. As a result, the Chinese government has been implementing industrial policies of supporting new energy vehicles. The diversified market with the coexistence of traditional fuel vehicles, plug-in hybrid vehicles and pure electric vehicles has been initially formed. The Company believes China is a huge prospective market for pure electric vehicles. In recent years, some EV enterprises in China are seizing market share at the cost of huge losses. The Company realized that the EV market of China has not reached a healthy and orderly development stage. The Company also believes that in the global automobile industry, there is great development space for the Chinese electric vehicles and their core parts industry in the future. Meanwhile, with the global trend of “fuel to electrification” of off-road vehicles becoming more and more obvious and huge market demand, management believes this industry still has huge development space. A majority of the Company’s products are pure electric off-road vehicles include utility vehicles (UTVs), ATVs, golf carts, go karts, etc. The largest market of pure electric off-road vehicles is in the United States.

3

Competitive Landscape

In general, the EV and electric off-road vehicles business faces competition from two groups of competitors: traditional vehicle manufacturers and new market entrants.

In terms of competition with conventional fuel vehicle and off-road vehicles manufacturers, many of the conventional fuel vehicle manufacturers are much larger in terms of size, manufacturing capabilities, customer bases, financial, marketing and human resources than the electric vehicle and electric off-road vehicles manufacturers. However, the conventional fuel vehicles and off-road vehicles face many challenges, including but not limited to environmental pollution and energy scarcity, which in turn provide great opportunities for the rapid development of the EV and electric off-road vehicles industry.

Our Opportunities and Growth Strategy

Due to worsening air pollution and concerns about petroleum resource dependence, the new energy industry is developing vigorously. Given its technology innovation with integrated solutions and operation experience, Kandi has benefited from the development of EV and electric off-road vehicles industry.

The Company’s business strategy includes efforts to provide customers with high-quality products, to expand the footprint in new and existing markets, and to advance our profile and the market demand through the further innovations. The Company also provides products to end users through retail stores and our distributors.

As the largest market of pure electric off-road vehicles is in the United States, Kandi Technologies focus on the development of its wholly-owned subsidiary based in Dallas, SC Autosports, specialized in the sales in the United States. It has a seasoned management team with personnel over ten years of business experience, which has laid a good foundation for the sales of the Company’s products in the US market. On November 30, 2023, Kandi Technologies, through its wholly owned subsidiary, SC Autosports, acquired Northern Group, Inc. (“NGI”), a Wisconsin incorporated company that has extensive sales experience and sales channels in the United States rooted in wholesale, retail, supply chain and analytics solutions. The acquisition allows the expansion of the SC Autosports’ and the Company’s sales pipelines through vertical integration and thus enhance the growth of sales.

Our Products

General

For the years ended December 31, 2023 and 2022, our products primarily consist of EV parts, EV products, and off-road vehicles including All-Terrain Vehicles (“ATVs”), UTVs, go-karts, and electric scooters, electric self-balancing Scooters and associated parts, and Lithium-ion cells, etc. Based on our market research on consumer demand trends, the Company has adjusted our production line strategically and continue to develop and manufacture new products in an effort to meet market demand and better serve our customers.

4

The following table shows the breakdown of our net revenues:

	Year Ended December 31
	2023		2022
	Sales Revenue		Sales Revenue
Primary geographical markets
U.S. and other countries/areas	$	93,979,363	$	65,871,112
China		29,619,869		51,941,937
Total	$	123,599,232	$	117,813,049
Major products and Services
EV parts	$	5,807,973	$	8,964,094
EV products		1,214,786		7,926,233
Off-road vehicles and associated parts		106,983,891		70,622,278
Electric Scooters, Electric Self-Balancing Scooters and associated parts		683,952		4,616,683
Battery exchange equipment and Battery exchange service		674,927		1,691,486
Lithium-ion cells		7,994,227		23,992,275
Commission income		239,476		-
Total	$	123,599,232	$	117,813,049
Timing of revenue recognition
Products transferred at a point in time	$	123,359,756	$	117,813,049
Sales transactions completed at a point in time		239,476		-
Total	$	123,599,232	$	117,813,049

Sales and Distribution

Because our products are manufactured in China, there are two major sales modes of our products sold to the countries and regions other than China market: the first mode is indirect sales to Chinese import and export trading companies for sales to the countries and regions out of China, and the second is direct sales to retail stores and dealers of the countries and regions out of China. Our products sold in China are mainly through our sales department to sign sales contracts directly with customers.

5

The Company jointly manufactures the K23 model with Hunan Hengrun Automobile Co., Ltd. (“Hengrun”), whose manufacture license was granted in June 2022. This product is sold in the China market through our sales department by signing sales contracts directly with customers.

Customers

For the years ended December 31, 2023 and 2022, the major customers of our operating subsidiaries, in the aggregate, accounted for 55% and 26% of our sales. Our operating subsidiaries are working on developing new business partners and clients for our products to reduce our dependence on existing customers and is focusing our new business development efforts on pure electric off-road vehicle business.

For the year ended December 31, 2023 and 2022, the Company’s major customers, each of whom accounted for more than 10% of our consolidated revenue, were as follows:

	Sales			Trade Receivable
	Year Ended
	December 31,			December 31,			December 31,
Major Customers	2023			2023			2022
Customer A		26	%		1	%		1	%
Customer B		19	%		4	%		-
Customer C		11	%		4	%		-

	Sales			Trade Receivable
	Year Ended
	December 31,			December 31,			December 31,
Major Customers	2022			2022			2021
Customer A		26	%		1	%		-

6

Sources of Supply

All raw materials are purchased from suppliers. Our operating subsidiaries have developed close relationships with several key suppliers particularly in the procurement of certain key parts. While our operating subsidiaries obtain components from multiple third-party sources in some cases, the Company does not have, and do not anticipate to have, any difficulty in obtaining required materials from our suppliers. The Company believes that our operating subsidiaries have adequate supplies or sources of availability of the raw materials necessary to meet our manufacturing and supply requirements.

For the year ended December 31, 2023 and 2022, our operating subsidiaries’ material suppliers, each of whom accounted for more than 10% of our total purchases, were as follows:

	Purchases			Accounts Payable
	Year Ended
	December 31,			December 31,			December 31,
Major Suppliers	2023			2023			2022
Zhejiang Kandi Supply Chain Management Co., Ltd.(1)		20	%		26	%		32	%

	Purchases			Accounts Payable
	Year Ended
	December 31,			December 31,			December 31,
Major Suppliers	2022			2022			2021
Zhejiang Kandi Supply Chain Management Co., Ltd.(1)		22	%		32	%		11	%

(1) Zhejiang Kandi Technologies owns 10% equity interest of the supplier.

Intellectual Property and Licenses

The Company’s success partially depends on our ability to protect our core technology and intellectual property. We rely on a combination of patents, patent applications, trademarks, copyrights and trade secret protection laws in China and other jurisdictions, as well as confidentiality procedures and contractual provisions to protect our intellectual property and our brand. As of December 31, 2023, Zhejiang Kandi Technologies had a total of 90 valid patents and 2 software copyrights, including 2 invention patent, 51 utility model patents and 37 appearance design patents. As of December 31, 2023, Kandi Smart Battery Swap had a total of 96 valid patents and 4 software copyrights, including 77 utility model patents, 12 appearance design patents and 7 invention patents. As of December 31, 2023, Kandi New Energy had a total of 6 valid patents, including 2 utility model patents and 4 appearance design patents. As of December 31, 2023, Yongkang Scrou had a total of 25 valid patents, including 11 utility model patents and 14 appearance design patents. As of December 31, 2023, Kandi Hainan had a total of 36 valid patents, including 33 utility model patents, 2 invention patent and 1 appearance design patents. As of December 31, 2023, China Battery Exchange and its subsidiaries had a total of 3 valid utility model patents and 10 software copyrights. As of December 31, 2023, Jiangxi Huiyi had a total of 51 valid patents, including 9 invention patents, 31 utility model patents and 11 appearance design patents. As of December 31, 2023, Hainan Kandi Holding had a total of 4 valid patents, including 3 utility model patents and 1 appearance design patents. Under Chinese patent law, the utility model patents and appearance design patents shall be valid until 10 years after the date of application. The invention patents shall be valid until 20 years after the date of application. Among the Company’s valid utility model patents, the earliest expiration date is January 2024 and the latest is February 2033. Among the Company’s valid appearance design patents, the earliest expiration date is September 2024 and the latest is September 2033. Among the Company’s valid invention patents, the earliest expiration date is November 2035 and the latest is April 2041. In addition, The Company is authorized to use the trademark “Kandi” in the PRC and the U.S. The Company intends to continue to file additional patent applications with respect to our technology.

7

Zhejiang Kandi Technologies, Kandi Smart Battery Swap, Kandi Hainan, and Jiangxi Huiyi are are recognized as a national High and New Technology Enterprises. The certification shall be renewed every three years. The status of being a national High and New Technology Enterprise qualifies for a preferred 15% income tax rate, as opposed to a standard corporate income tax rate at 25%. 

Employees

As of December 31, 2023, excluding contractors and employees with the affiliate company, Kandi had a total of 840 full-time employees, as compared to 971 full-time employees as of December 31, 2022, of which 488 employees are production personnel, 44 employees are sales personnel, 88 employees are research and development personnel, and 220 employees are administrative personnel. None of our employees are covered by collective bargaining agreements. We consider our relationships with our employees to be good. We also employ consultants on an as-needed basis. 

Environmental and Safety Regulation

Emissions

Our products are all subject to international laws and emissions related standards and regulations, including regulations and related standards established by China Environmental Protection Agency, the United States Environmental Protection Agency, the California Air Resources Board, and European and Canadian legislative bodies.

According to the management’s knowledge, the Company’s products have been designed and developed according to the environmental regulations of the target market since the research and development period, and have passed the corresponding tests before the products are put into production and sales, and obtained the compulsory product certification of the corresponding countries and regions.

If the standards and rules are modified, or interpreted differently, or the product certification certificate expires, the Company will evaluate the product and restart the corresponding product design improvement and product testing/certification procedures to continuously ensure the target market environment regulatory compliance. The Company cannot estimate the extent to which these changes, if any, will affect our operating costs in the future.

Product Safety and Regulation

Safety Regulation

The U.S. federal government and individual states have adopted, or are considering the adoption of, laws and regulations relating to the use and safety of Kandi’s products. The federal government is the primary regulator of product safety. The Consumer Product Safety Commission (“CPSC”) has federal oversight over product safety issues related to ATVs and off-road vehicles. The National Highway Transportation Safety Administration (“NHTSA”) has federal oversight over product safety issues related to off-road vehicles and regulates the safety of electric vehicles for road vehicles.

In August 2008, the Consumer Product Safety Improvement Act (the “Product Safety Act”) was passed. The Product Safety Act requires all manufacturers and distributors who import into or distribute ATVs within the United States to comply with the American National Standards Institute/Specialty Vehicle Institute of America (“ANSI/SVIA”) safety standard, which previously had been voluntary. The Product Safety Act also requires the same manufacturers and distributors to have ATV action plans filed with the CPSC that are substantially similar to the voluntary action plans that were previously in effect. Both Kandi and SC Autosports currently comply with the ANSI/SVIA standard.

Kandi’s off-road vehicles are subject to federal vehicle safety standards administered by NHTSA. Kandi’s off-road vehicles are also subject to various state vehicle safety standards. Kandi believes that its off-road vehicles comply with safety standards applicable to off-road vehicles.

Kandi’s off-road vehicles are also subject to international safety standards in places where it sells its products outside the United States. Kandi believes that its off-road vehicle products comply with applicable safety standards in the United States and internationally.

8

Permission and Approvals  

The following table lists all the material permission and approvals the Company and its subsidiaries hold to operate business in PRC, as of December 31, 2023:

Company	License/Permission	Issuing Authority	Validity
Zhejiang Kandi Technologies Group, Co. Ltd.	Business License	Market Supervision and Administration Bureau of Jinhua City	Until March 12, 2052
Zhejiang Kandi Technologies Group, Co. Ltd.	Record Registration Form for Foreign Trade Business Operators	Eligible local foreign trade authorities appointed by the Ministry of Commerce	Long-term
Jinhua Kandi New Energy Vehicle Co., Ltd.	Business License	Market Supervision and Administration Bureau of Jinhua City	Until May 26, 2030
Jinhua Kandi New Energy Vehicle Co., Ltd.	Record Registration Form for Foreign Trade Business Operators	Eligible local foreign trade authorities appointed by the Ministry of Commerce	Long-term
Zhejiang Kandi Smart Battery Swap Technology Co., Ltd	Business License	Market Supervision and Administration Bureau of Jinhua City	Long-term
Zhejiang Kandi Smart Battery Swap Technology Co., Ltd	Record Registration Form for Foreign Trade Business Operators	Eligible local foreign trade authorities appointed by the Ministry of Commerce	Long-term
Yongkang Scrou Electric Co, Ltd.	Business License	Market Supervision and Administration Bureau of Yongkang City	Until November 17, 2031
Kandi Electric Vehicles (Hainan) Co., Ltd.	Business License	Market Supervision and Administration Bureau of Hainan Province	Long-term
Kandi Electric Vehicles (Hainan) Co., Ltd.	Record Registration Form for Foreign Trade Business Operators	Eligible local foreign trade authorities appointed by the Ministry of Commerce	Long-term
Kandi Electric Vehicles (Hainan) Co., Ltd.	Pollutant Discharge Permit	Haikou High-tech Zone	Until February 8, 2028
China Battery Exchange (Zhejiang) Technology Co., Ltd.	Business License	Market Supervision and Administration Bureau of Xihu District, Hangzhou City	Until September 13, 2050
China Battery Exchange (Hainan) Technology Co., Ltd.	Business License	Market Supervision and Administration Bureau of Hainan Province	Long-term
Jiangxi Province Huiyi New Energy Co., Ltd.	Business License	Market Supervision and Administration Bureau of Xinyu City High tech Zone	Long-term
Jiangxi Province Huiyi New Energy Co., Ltd.	Record Registration Form for Foreign Trade Business Operators	Eligible local foreign trade authorities appointed by the Ministry of Commerce	Long-term
Jiangxi Province Huiyi New Energy Co., Ltd.	Environmental impact assessment	Environmental Protection Bureau of Xinyu City	Long-term
Jiangxi Province Huiyi New Energy Co., Ltd.	Pollutant Discharge Permit	Xinyu High Tech Ecological Environment Bureau	Until July 18, 2027
Hainan Kandi Holding New Energy Technology Co., Ltd.	Business License	Market Supervision and Administration Bureau of Hainan Province	Until February 18, 2042

9

Those listed above constitute all the requisite permissions or approvals the Company and its subsidiaries required to operate business in the PRC. The Company and its subsidiaries have never been denied any applications concerning any permissions or approvals. If the Company or its subsidiaries does not receive or maintain such permissions or approvals, or mistakenly conclude that such permissions or approvals are not required, our business may be adversely affected. In the scenario when the Company does get denied such permissions, the Company would either avoid such field of business, or collaborate with parties that can obtain such permissions. Currently the PRC legal system is under constant development and applicable laws, regulations, or interpretations are subject to substantial uncertainties. If relevant rules suddenly change, we will have to obtain such permissions or approvals, which may be costly, and may temporarily halt our operation of business, negatively affecting our revenues and our securities’ value.

CAC Review

The management believes that as of the date of this report: (i) the Company does not hold personal information of over one million users; (ii) the Company and its subsidiaries have not been informed by any PRC governmental authority of any requirement that it file for a cybersecurity review; and (iii) the Company and its subsidiaries have never disclosed any customer or supplier information within China (except when requested by related parties, the company and its subsidiaries tailor their customer or supplier information disclosures to the narrowest possible scope), therefore, the Company believes it is not required to pass cybersecurity review of CAC. We are also not aware that there are relevant laws or regulations in the PRC explicitly requiring us to seek approval from the China Securities Regulatory Commission for our overseas listing. Further, as of the date of this report, Kandi Technologies and its subsidiaries 1) did not collect any data that will or may negatively influence PRC’s national security; and 2) strictly follow the relevant PRC laws and regulations. Since these statements and regulatory actions are new, however, official guidance and related implementation rules have not been issued. It is highly uncertain what the potential impact such modified or new laws and regulations will have on the daily business operations of our subsidiaries, our ability to accept foreign investments, and our listing on a U.S. exchange. The PRC regulatory authorities may in the future promulgate laws, regulations, or implementing rules that require us, our subsidiaries to obtain regulatory approval from Chinese authorities for listing in the U.S. If we do not receive or maintain the approval, or inadvertently conclude that such approval is not required, or applicable laws, regulations, or interpretations change such that we are required to obtain approval in the future, we may be subject to an investigation by competent regulators, fines or penalties, or an order prohibiting us from conducting an offering, and these risks could result in a material adverse change in our operations and the value of our common stock, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless.

CSRC Filing Requirements

On December 24, 2021, the China Securities Regulatory Commission, or the “CSRC”, published draft regulations (the “Draft Rules”) on domestic enterprises issuing securities and being listed overseas. The Draft Rules lay out specific filing requirements for overseas listing and offering by PRC domestic companies and include unified regulation management and strengthening regulatory coordination. On February 17, 2023, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”), which took effect on March 31, 2023. The Trial Measures supersede the Draft Rules and clarified and emphasized several aspects, which include but are not limited to: (1) criteria to determine whether an issuer will be required to go through the filing procedures under the Trial Measures; (2) exemptions from immediate filing requirements for issuers including those that have already been listed or registered but not yet listed in foreign securities markets, including U.S. markets, prior to the effective date of the Trial Measures; (3) a negative list of types of issuers banned from listing or offering overseas, such as issuers whose affiliates have been recently convicted of bribery and corruption; (4) issuers’ compliance with web security, data security, and other national security laws and regulations; (5) issuers’ filing and reporting obligations, such as obligation to file with the CSRC after it submits an application for initial public offering to overseas regulators, and obligation after offering or listing overseas to report to the CSRC material events including change of control or voluntary or forced delisting of the issuer; and (6) the CSRC’s authority to fine both issuers and their shareholders for failure to comply with the Trial Measures, including failure to comply with filing obligations or committing fraud and misrepresentation. Because we are already publicly listed in the U.S., the Trial Measures do not impose additional regulatory burden on us beyond the obligation to report to the CSRC any future offerings of our securities, or material events such as a change of control or delisting. As the Trial Measures are newly issued, there remains uncertainty as to how it will be interpreted or implemented. Therefore, there is uncertainty that if we are subject to such filing requirements under the Trial Measures, we will be able to get clearance from the CSRC in a timely fashion.

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Auditors’ Regulations

As auditors of companies that are traded publicly in the United States and a firm registered with the PCAOB, our auditor is required by the laws of the United States to undergo regular inspections by the PCAOB. However, to the extent that our auditor’s work papers become located in China, such work papers will not be subject to inspection by the PCAOB because the PCAOB is currently unable to conduct inspections without the approval of the Chinese authorities. Inspections of certain other firms that the PCAOB has conducted outside of China have identified deficiencies in those firms’ audit procedures and quality control procedures, which may be addressed as part of the inspection process to improve future audit quality. We are required by the Holding Foreign Companies Accountable Act (“HFCAA”) to have an auditor that is subject to the inspection by the PCAOB. Our present auditor is subject to the review of PCAOB and the PCAOB is able to conduct inspections on our present auditor, to the extent this status changes in the future and our auditor’s audit documentation related to their audit reports for our company becomes outside of the inspection by the PCAOB or if the PCAOB is unable to inspect or investigate completely our auditor because of a position taken by an authority in a foreign jurisdiction, trading in our common stock could be prohibited under the HFCAA, and as a result our common stock could be delisted from Nasdaq.

On May 13, 2021, the PCAOB proposed a new rule for implementing the HFCAA. Among other things, the proposed rule provides a framework for the PCAOB to use when determining, under the HFCAA, whether it is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction. The proposed rule would also establish the manner of the PCAOB’s determinations; the factors the PCAOB will evaluate and the documents and information it will consider when assessing whether a determination is warranted; the form, public availability, effective date, and duration of such determinations; and the process by which the board of the PCAOB can modify or vacate its determinations. The proposed rule was adopted by the PCAOB on September 22, 2021 and approved by the SEC on November 5, 2021.

Furthermore, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act (“AHFCAA”), which, if enacted, would amend the HFCAA and require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time period for triggering the prohibition on trading. On December 29, 2022, the Consolidated Appropriations Act, 2023 (the “CAA”), which AHFCAA constituted a part, was signed into law, which officially reduced the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two, thus, reducing the time before an applicable issuer’s securities may be prohibited from trading or delisted.

While the HFCAA is not currently applicable to the Company because the Company’s current auditors are subject to PCAOB review, if this changes in the future for any reason, the Company may be subject to the HFCAA. The implications of this regulation if the Company were to become subject to it are uncertain. Such uncertainty could cause the market price of our common stock to be materially and adversely affected, and our securities could be delisted or prohibited from being traded on Nasdaq earlier than would be required by the HFCAA. If our common stock is unable to be listed on another securities exchange by then, such a delisting would substantially impair your ability to sell or purchase the common stock when you wish to do so, and the risk and uncertainty associated with a potential delisting would have a negative impact on the price of the common stock.

Principal Executive Offices

Our principal executive office is located in the Jinhua New Energy Vehicle Town in Jinhua, Zhejiang Province, PRC, 321016, and our telephone number is (86-579) 82239856.

Enforceability of civil liabilities against foreign persons

We have our principal executive office and substantially all of our operations in PRC. A majority of our directors and officers are nationals and/or residents of countries other than the United States. As a result, it may be difficult for our shareholders to effect service of process upon us or those persons inside PRC. The shareholders may have to rely on international treaties such as Hague Service Convention for service. In addition, PRC does not have treaties providing for the reciprocal recognition and enforcement of judgments of courts with the United States and many other countries and regions. Therefore, direct recognition and enforcement in PRC of judgments of a court in any such non-PRC jurisdictions in relation to any matter not subject to a binding arbitration provision may be difficult, time-consuming, costly or even impossible.

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Item 1A. Risk Factors.

You should carefully consider the risks described below together with all of the other information included in this report before making an investment decision with regard to our securities. The statements contained in or incorporated into this Annual Report that are not historic facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. If any of the following risks actually occurs, our business, financial condition or results of operations could be harmed. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.

Risk Factor Summary

The following are some material risks, any of which could have an adverse effect on our business financial condition, operating results, or prospects.

● Risks Relating to Our Business

○ Our future growth is dependent upon market’s willingness to adopt our products and performance of our products in line with customers’ expectation;

○ Developments in alternative technologies or improvements in the internal combustion engine may materially adversely affect the demand for our products;

○ Our business depends substantially on the continuing efforts of our executive officers, and our business may be severely disrupted if we lose their services;

○ Our U.S. and PRC operating entities may be subject to product liability claims or recalls which could be expensive, damage our reputation or result in a diversion of management resources;

○ We and our PRC operating entities retain certain personal information about our customers and may be subject to various privacy and consumer protection laws;

○ If we are unable to protect our intellectual property rights from unauthorized use or infringement by third parties, defending and claiming our rights may be time-consuming and could cause us to incur substantial costs, our operating entities’ business may be adversely affected;

○ Our PRC operating entities’ products make use of lithium-ion battery cells, which may catch fire or vent smoke and flame. This may lead to additional concerns about batteries used in automotive applications;

○ Compliance with environmental regulations can be expensive, and noncompliance with these regulations may result in adverse publicity and potentially significant monetary damages and fines;

○ Our high concentration of sales to relatively few customers and supplies from relatively few suppliers may result in significant impact on our liquidity, business, results of operations and financial condition;

○ Our facilities or operations could be damaged or adversely affected as a result unpredictable events;

○ If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a result, current and potential shareholders could lose confidence in our financial reporting, which would harm our business and the trading price of our stock;

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● Risks Related to Doing Business in China

○ Substantial uncertainties and restrictions on the political and economic policies of the PRC government, PRC laws and regulations which can change quickly with little advance notice, and Chinese government’s tendency  to intervene or influence the Company’s operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers could have a significant impact upon the business that we may be able to conduct in the PRC and accordingly on the results of our operations and financial condition; may restrict the level of legal protections to foreign investors and could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. For more detailed description, please refer to the discussion on P22 under such title;

○ Adverse regulatory developments in China may subject us to additional regulatory review, and additional disclosure requirements and regulatory scrutiny to be adopted by the SEC in response to risks related to recent regulatory developments in China may impose additional compliance requirements for companies like us with China-based operations, all of which could increase our compliance costs, subject us to additional disclosure requirements;

○ Compliance with China’s new Data Security Law, Measures on Cybersecurity Review, Personal Information Protection Law (second draft for consultation), regulations and guidelines relating to the multi-level protection scheme and any other future laws and regulations may entail significant expenses and could materially affect our business; The approval of the China Securities Regulatory Commission (“CSRC”) may be required in connection with future offering under a PRC regulation adopted in August 2006, and, if required, we cannot assure you that we will be able to obtain such approval;

○ It may be difficult for U.S. regulators, such as the Department of Justice, the SEC, and other authorities, to conduct investigation or collect evidence within China;

○ The economy of China had experienced unprecedented growth. This growth has slowed in the recent years, and if the growth of the economy continues to slow or if the economy contracts, our financial condition may be materially and adversely affected;

○ Changes in currency conversion policies in China and fluctuation in exchange rates may have a material adverse effect on our business and the value of our securities;

○ Investors may experience difficulties in effecting service of legal process, enforcing judgements or bringing original actions based on United States or foreign laws against us or our management;

○ Changes to the government’s subsidy support policies and further delays in subsidy payments may have negative impacts on our operations;

● Risks Associated With the Export of Kandi Electric Vehicles to and sale in the United States

○ Failures in our U.S. business may present a risk of significant losses to our business;

○ The United States has strict environmental laws and regulations which may cause us to expend significant sums to comply with such laws and regulations;

○ Our short-term financial performance may suffer due to our investment in expanding our presence and sales in the United States;

○ Lack of authorized dealers and absence of after-sales maintenance may adversely affect our business in the United States;

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● Risks Relating to Ownership of Our Securities

○ Our stock price may be volatile, which may result in losses for our shareholders;

○ We do not anticipate paying cash dividends to our common shareholders;

○ Limited monetary liability against our directors, officers and employees under Delaware Law and the existence of statutory indemnification rights of our directors, officers and employees may result in substantial expenditures by our company and may discourage lawsuits against our directors, officers and employees;

○ We may require additional capital, and the sale of additional shares or other equity securities could result in additional dilution to our shareholders;

○ Our business is subject to changing regulations related to corporate governance and public disclosure that may increase both our costs and the risk of noncompliance;

○ Techniques employed by manipulative short sellers in Chinese small cap stocks may drive down the market price of our common stock.

● Risks Relating to the Reincorporation

○	Your rights as a shareholder of Kandi will change as a result of the Reincorporation and you may not be afforded as many rights as a shareholder of Kandi BVI under applicable laws and the Kandi BVI memorandum and articles of association as you were as a shareholder of Kandi under applicable laws and the Kandi certificate of incorporation and bylaws.
○	BVI companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect their interests.
○	Kandi BVI’s Amended and Restated Articles of Association provide for the exclusive jurisdiction of the Courts of the British Virgin Islands for substantially all disputes between Kandi BVI and its shareholders, which could limit the shareholders’ ability to obtain a favorable judicial forum for disputes with Kandi BVI or its directors, officers, other employees or shareholders.
○	As a foreign private issuer, Kandi BVI is permitted to, and Kandi BVI may in the future choose to follow certain corporate governance practices in accordance with British Virgin Island law in lieu of certain NASDAQ requirements applicable to U.S. issuers. As a result, Kandi BVI’s members may not have the protections afforded by these corporate governance requirements, which may make its ordinary shares less attractive to investors or otherwise harm the trading price or value of its ordinary shares.
○	The expected benefits of the Reincorporation may not be realized.
○	As a foreign private issuer, Kandi BVI will not be required to provide its shareholders with the same information as Kandi would if Kandi remained a U.S. public issuer and, as a result, you may not receive as much information about Kandi BVI as you did about Kandi and you may not be afforded the same level of protection as a shareholder of Kandi BVI under applicable laws and the Kandi BVI memorandum and articles of association as you were as a shareholder of Kandi under applicable laws and the Kandi certificate of incorporation and bylaws.

Risks Relating to Our Business

Our future growth is dependent upon consumers’ willingness to adopt our products.

Our PRC operating entities’ growth is highly dependent upon the adoption by consumers of, and they are subject to a risk of any reduced demand for, alternative fuel vehicles in general and EVs and pure electric off-road vehicles in particular. The market for alternative fuel vehicles and pure electric off-road vehicles is relatively new and rapidly evolving, characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation and industry standards, frequent new vehicle announcements and changing consumer demands and behaviors. If the market for EVs and pure electric off-road vehicles in China does not develop as we expect or develops more slowly than we expect, our business, prospects, financial condition and operating results will be harmed.

Developments in alternative technologies or improvements in the internal combustion engine may materially adversely affect the demand for our products.  

Significant developments in alternative technologies, such as advanced diesel, ethanol, fuel cells or compressed natural gas, or improvements in the fuel economy of the internal combustion engine, may materially and adversely affect our business and prospects in ways we do not currently anticipate. Any failure by us to develop new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay our development and introduction of new and enhanced EV products and Pure Electric off-road vehicles, which could result in the loss of competitiveness of our vehicles, decreased revenue and a loss of market share to competitors, which would materially and adversely affect our business, prospects, operating results and financial condition.

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If our U.S. and PRC operating entities are unable to keep up with advances in electric vehicle and pure electric off-road vehicle technology, we may suffer a decline in our competitive position. Our research and development efforts may not be sufficient to adapt to changes in EV and pure electric off-road vehicle technology. As technologies change, our PRC operating entities plan to upgrade or adapt the vehicles and introduce new models in order to continue to provide vehicles with the latest technology, in particular battery cell technology. However, our PRC operating entities’ vehicles may not compete effectively with alternative vehicles and pure electric off-road vehicles if they are not able to source and integrate the latest technology into their vehicles. For example, our PRC operating entities do not manufacture battery cells, which makes them dependent upon other suppliers of battery cell technology for our battery packs.

Our business depends substantially on the continuing efforts of our executive officers, and our business may be severely disrupted if we lose their services.

Our future success depends substantially on the continued services of our executive officers, especially our CEO, Dr. Dong Xueqin and Chairman of the Board, Mr. Hu Xiaoming. We do not maintain key man life insurance on any of our executive officers. If any of our executive officers are unable or unwilling to continue in their present positions, we may not be able to replace them readily, if at all. Therefore, our business may be severely disrupted, and we may incur additional expenses to recruit and retain new officers. In addition, if any of our executive officers joins a competitor or forms a competing company, we may lose some of our customers.

Our U.S. and PRC operating entities may be subject to product liability claims or recalls which could be expensive, damage our reputation or result in a diversion of management resources.

Our PRC and U.S. operating entities may be subject to lawsuits resulting from injuries or damages associated with the use of the vehicles that they sell or produce. We may incur losses relating to these claims or the defense of these claims. While our PRC and U.S. operating entities do maintain product liability insurance, there is a risk that claims or liabilities will exceed our insurance coverage. In addition, we cannot assure the insurance our PRC and U.S. operating entities currently maintain will continue to be available on commercially reasonable terms, therefore, we may be unable to retain adequate liability insurance in the future.

Our operating entities in PRC or in U.S. may also be involved in recalls of our vehicles. The vehicles we manufactured may prove to be defective, or our operating entities may voluntarily initiate a recall or make payments related to such claims as a result of various industry or business practices or the need to maintain good customer relationships. Such a recall would result in a diversion of resources, extra expenditure of the funds, or damage to our reputation. Any product liability claim brought against us could have a material adverse effect on the results of our operations.

We and our PRC operating entities retain certain personal information about our customers and may be subject to various privacy and consumer protection laws.

We and our PRC operating entities use the electronic systems of our vehicles to log information about each vehicle’s condition, performance and use in order to aid us in providing customer service, including vehicle diagnostics, repair and maintenance. Electronic systems are also used to help us collect data regarding our customers’ charging time, battery usage, mileage and efficiency habits to improve our vehicles. We also collect information about our customers through our website, at our stores and facilities, and via telephone.

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Our customers may object to the processing of this data, which may negatively impact our ability to provide effective customer service and develop new vehicles and products. Collection and use of our customers’ personal information in conducting our business may be subject to national and local laws and regulations in China, and such laws and regulations may restrict our processing of such personal information and hinder our ability to attract new customers or market to existing customers. We may incur significant expenses to comply with privacy, consumer protection and security standards and protocols imposed by law, regulation, industry standards or contractual obligations. Although we take steps to protect the security of our customers’ personal information, we may be required to expend significant resources to comply with data breach requirements if third parties improperly obtain and use the personal information of our customers or we otherwise experience a data loss with respect to customers’ personal information. A major breach of our network security and systems could have serious negative consequences for our businesses and future prospects, including possible fines, penalties and damages, reduced customer demand for our vehicles, and harm to our reputation and brand.

Our PRC operating entities’ business will be adversely affected if we are unable to protect our intellectual property rights from unauthorized use or infringement by third parties.

Any failure to adequately protect our proprietary rights could result in the weakening or loss of such rights, which may allow our competitors to offer similar or identical products or use identical or confusingly similar branding, potentially resulting in the loss of some of our competitive advantage, a decrease in our revenue or an attribution of potentially lower quality products to us, which would adversely affect our business, prospects, financial condition and operating results. Our success depends, at least in part, on our ability to protect our core technology and intellectual property. To accomplish this, we rely on a combination of patents, patent applications, trade secrets (including know-how), employee and third-party nondisclosure agreements, copyright protection, trademarks, intellectual property licenses and other contractual rights to establish and protect our proprietary rights in our technology. We have also received from third parties patent licenses related to manufacturing our vehicles.

The protection provided by the patent laws is and will be important to our future opportunities. However, such patents and agreements and various other measures we take to protect our intellectual property from use by others may not be effective for various reasons, including the following:

● our pending patent applications may not result in the issuance of patents;

● our patents, if issued, may not be broad enough to protect our commercial endeavors;

● the patents we have been granted may be challenged, invalidated or circumvented because of the pre-existence of similar patented or unpatented technology or for other reasons;

● the costs associated with obtaining and enforcing patents, confidentiality and invention agreements or other intellectual property rights may make aggressive enforcement impracticable; or

● current and future competitors may independently develop similar technology, duplicate our vehicles or design new vehicles in a way that circumvents our intellectual property.

Existing trademark and trade secret laws and confidentiality agreements only afford limited protections. In addition, the laws of some countries, such as PRC, do not protect our proprietary rights to the same extent as do the laws of the United States, which can lead to more unauthorized use of our intellectual property.

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We may need to defend ourselves against patent or trademark infringement claims, which may be time-consuming and could cause us to incur substantial costs.

Companies, organizations or individuals, including our competitors, may hold or obtain patents, trademarks or other proprietary rights that would prevent, limit or interfere with our ability to make, use, develop, sell or market our vehicles or components, which could make it more difficult for us to operate our business. From time to time, we may receive inquiries from holders of patents or trademarks regarding their proprietary rights. Companies holding patents or other intellectual property rights may bring suits alleging infringement of such rights or otherwise assert their rights and seek licenses. In addition, if we are determined to have infringed upon a third party’s intellectual property rights, we may be required to do one or more of the following:

● cease selling, incorporating or using vehicles or offering goods or services that incorporate or use the challenged intellectual property;

● pay substantial damages;

● obtain a license from the holder of the infringed intellectual property right, which license may not be available on reasonable terms or at all; or

● redesign our vehicles or other goods or services.

In the event of a successful claim of infringement against us and our failure or inability to obtain a license to the infringed technology or other intellectual property right, our business, prospects, operating results and financial condition could be materially adversely affected. In addition, any litigation or claims, whether or not valid, could result in substantial costs and diversion of resources and management attention.

We may also face claims that our use of technology licensed or otherwise obtained from a third party infringes the rights of others, under such case we may not be allowed to continue using such technology and selling our inventories containing such technology. In such cases, we may seek indemnification from our licensors/suppliers under our contracts with them. However, indemnification may be unavailable or insufficient to cover our costs and losses, depending on our use of the technology, whether we choose to retain control over conduct of the litigation, and other factors. In addition, we may have to find substitute to keep using similar technology to our products, which may be time-consuming and costly, if not impossible, upon such period our sales or manufacture of certain products may be negatively influenced.

Our PRC operating entities’ vehicles make use of lithium-ion battery cells, which have the potential to catch fire or vent smoke and flame. This may lead to additional concerns about batteries used in automotive applications.

The battery packs in our EV products and pure electric off-road vehicles make use of lithium-ion cells. Our PRC operating entities also currently intend to make use of lithium-ion cells in battery packs on any future vehicles we may produce. On rare occasions, lithium-ion cells can rapidly release the energy they contain by venting smoke and flames in a manner that can ignite nearby materials as well as other lithium-ion cells. Extremely rare incidents of laptop computers, cell phones and EV battery packs catching fire have focused consumer attention on the safety of these cells.

These events have raised concerns about batteries used in EV products and pure electric off-road vehicles applications. To address these questions and concerns, a number of battery cell manufacturers are pursuing alternative lithium-ion battery cell chemistries to improve safety. Our PRC operating entities may have to recall their vehicles or participate in a recall of a vehicle that contains their battery packs, or redesign their battery packs, which would be time consuming and expensive. Also, negative public perceptions regarding the suitability of lithium-ion cells for automotive applications or any future incident involving lithium-ion cells such as a vehicle or other fire, even if such incident does not involve us, could seriously harm our business.

In addition, our PRC operating entities store a significant number of lithium-ion cells at our manufacturing facility. Any mishandling of battery cells may cause disruption to the operation of our facilities. While our PRC operating entities have implemented safety procedures related to the handling of the cells, there can be no assurance that a safety issue or fire related to the cells would not disrupt our operations. Such damage or injury would likely lead to adverse publicity and potentially a safety recall. Moreover, any failure of a competitor’s EVs and pure electric off-road vehicles, may cause indirect adverse publicity for us and our EV products. Such adverse publicity would negatively affect our brand and harm our business, prospects, financial condition and operating results.

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Compliance with environmental regulations can be expensive, and noncompliance with these regulations may result in adverse publicity and potentially significant monetary damages and fines.

The business operations of our PRC operating entities generate noise, waste water, gaseous byproduct and other industrial waste. Our PRC operating entities are required to comply with all national and local regulations regarding the protection of the environment. Our PRC operating entities are in compliance with current environmental protection requirements and have all necessary environmental permits to conduct our business. However, if more stringent regulations are adopted in the future, the costs of compliance with these new regulations could be substantial. Additionally, if our PRC operating entities fail to comply with present or future environmental regulations, they may be required to pay substantial fines, suspend production or cease operations. Any failure by our PRC operating entities to control the use of, or to adequately restrict the unauthorized discharge of, hazardous substances could subject us to potentially significant monetary damages and fines or suspensions to our business operations. Certain laws, ordinances and regulations could limit our ability to develop, use, or sell our products.

Our high concentration of sales to relatively few customers may result in significant impact on our liquidity, business, results of operations and financial condition.

As of December 31, 2023 and 2022, our operating subsidiaries’ major customers (above 10% of the total revenue), in the aggregate, accounted for 55% and 26%, respectively, of their sales. Due to the concentration of sales to relatively few customers, loss of one or more of these customers will have relatively high impact on their operational results.

Our business is subject to the risk of supplier concentrations.

Our PRC operating entities depend on a limited number of suppliers for the sourcing of major components and parts and principal raw materials. For the years ended December 31, 2023 and 2022, the major suppliers (above 10% of the total purchases) of our operating subsidiaries accounted for 20% and 22% of their purchases, respectively. As a result of this concentration in our supply chain, our operating subsidiaries’ business and operations would be negatively affected if any of their key suppliers were to experience significant disruption affecting the price, quality, availability or timely delivery of their products. The partial or complete loss of these suppliers, or a significant adverse change in our relationship with any of these suppliers, could result in lost revenue, added costs and distribution delays that could harm our business and customer relationships. Disputes with significant suppliers, logistics service providers or independent distributors, including disputes regarding pricing or performance, may also adversely affect our ability to manufacture and/or sell our products, as well as our business or financial results. In addition, concentration in our supply chain can exacerbate our exposure to risks associated with the termination by key suppliers of our distribution agreements or any adverse change in the terms of such agreements, which could have a negative impact on our revenues and profitability.

Our facilities or operations could be damaged or adversely affected as a result of disasters, epidemics or other unpredictable events.

The Company’s headquarters and facilities are located in several cities in China such as Jinhua, Yongkang and Haikou. If major disasters such as earthquakes, fires, floods, hurricanes, wars, terrorist attacks, computer viruses, pandemics or other events occur, or our information system or communications network breaks down or operates improperly, our headquarters and production facilities may be seriously damaged, or we may have to stop or delay production and shipment of our products. Any outbreak of contagious diseases, and other adverse public health developments, particularly in China, and failure to take adequate steps to mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, may adversely affect our business or financial results. These could include port closures and other restrictions resulting from the outbreak; constrained global supply, which may cause the negative impact on our sale of off-road vehicles to the U.S.; disruptions or restrictions on our ability to travel or to distribute our products, as well as temporary closures of our facilities or the facilities of our suppliers, manufacturers or customers. Any disruption or delay of our operation and those of our suppliers, manufacturers or customers would adversely impact our sales and operating results. In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of China and many other countries, resulting in an economic downturn that could affect demand for our products and we may incur expenses relating to such damages, which could have a material adverse impact on our business, operating results and financial condition.

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Our EVs and pure electric off-road vehicles may not perform in line with customer expectations.

Our EVs and pure electric off-road vehicles may not perform in line with customers’ expectations. For example, our vehicles may not have the durability or longevity of other vehicles in the market, and may not be as easy and convenient to repair as other vehicles in the market. Any product defects or any other failure of our vehicles to perform as expected could harm our reputation and result in adverse publicity, lost revenue, delivery delays, product recalls, product liability claims, harm to our brand and reputation, and significant warranty and other expenses, and could have a material adverse impact on our business, financial condition, operating results and prospects.

In addition, the range of our vehicles on a single charge declines principally as a function of usage, time and charging patterns as well as other factors. For example, a customer’s use of his or her EVs and pure electric off-road vehicles as well as the frequency with which he or she charges the battery can result in additional deterioration of the battery’s ability to hold a charge.

Furthermore, our vehicles may contain defects in design and manufacture that may cause them not to perform as expected or that may require repair. While we have performed extensive internal testing on our vehicles’ software and hardware systems, we have a limited frame of reference by which to evaluate the long-term performance of our systems and vehicles. There can be no assurance that we will be able to detect and fix any defects in the vehicles prior to their sale to consumers. If any of our vehicles fail to perform as expected, we may need to delay deliveries, initiate product recalls and provide servicing or updates under warranty at our expense, which could adversely affect our brand in our target markets and could adversely affect our business, prospects and results of operations.

If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a result, current and potential shareholders could lose confidence in our financial reporting, which would harm our business and the trading price of our stock.

Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. As directed by Section 404 of the Sarbanes-Oxley Act of 2002, or SOX 404, the SEC adopted rules requiring public companies to include a report of management on our internal controls over financial reporting in their annual reports.

Although we continue to maintain and improve our internal control procedures, we cannot provide assurance that we will not fail to achieve and maintain an effective internal control environment on an ongoing basis, which may cause investors to lose confidence in our reported financial information and have a material adverse effect on the price of our common stock.

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Risks Related to Doing Business in China

Substantial uncertainties and restrictions on the political and economic policies of the PRC government, PRC laws and regulations which can change quickly with little advance notice, and Chinese government’s tendency to intervene or influence your operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers could have a significant impact upon the business that we may be able to conduct in the PRC and accordingly on the results of our operations and financial condition; may restrict the level of legal protections to foreign investors and could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless;

Kandi Technologies’ business operations conducted through our PRC operating entities may be adversely affected by the current and future political environment in the PRC. Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. The Chinese government exerts substantial influence and control over the manner in which we must conduct our business activities. Our PRC operating entities’ ability to operate in China may be adversely affected by changes in Chinese laws and regulations. Under the current government leadership, the government of the PRC has been pursuing reform policies which have adversely affected China-based operating companies whose securities are listed in the United States, with significant policies changes being made from time to time without notice. There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws and regulations governing our business, or the enforcement and performance of our contractual arrangements. Only after 1979 did the Chinese government begin to promulgate a comprehensive system of laws that regulate economic affairs in general, deal with economic matters such as foreign investment, corporate organization and governance, commerce, taxation and trade, as well as encourage foreign investment in China. Although the influence of the law has been increasing, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. Also, because these laws and regulations are relatively new, and because of the limited volume of published cases and their lack of force as precedents, interpretation and enforcement of these laws and regulations involve significant uncertainties. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. In addition, there have been constant changes and amendments of laws and regulations over the past 30 years in order to keep up with the rapidly changing society and economy in China. Because government agencies and courts provide interpretations of laws and regulations and decide contractual disputes and issues, their inexperience in adjudicating new business and new polices or regulations in certain less developed areas causes uncertainty and may affect our operating entities’ business. Consequently, we cannot predict the future direction of Chinese legislative activities with respect to either businesses with foreign investment or the effectiveness on enforcement of laws and regulations in China. The uncertainties, including new laws and regulations and changes of existing laws, as well as judicial interpretation by inexperienced officials in the agencies and courts in certain areas, may cause possible problems to foreign investors. Although the PRC government has been pursuing economic reform policies for more than two decades, the PRC government continues to exercise significant control over economic growth in the PRC through the allocation of resources, controlling payments of foreign currency, setting monetary policy and imposing policies that impact particular industries in different ways. We cannot assure you that the PRC government will continue to pursue policies favoring a market oriented economy or that existing policies will not be significantly altered, especially in the event of a change in leadership, social or political disruption, or other circumstances affecting political, economic and social life in the PRC. The Chinese government may intervene or influence our operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in our operations and/or the value of the securities being offered. Any adverse changes in Chinese laws and regulations and the Chinese government’s significant oversight and discretion over the conduct of our business could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless.

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Our current corporate structure and business operations and the market price of our common stock may be affected by the newly enacted Foreign Investment Law.

Kandi Technologies is a holding company incorporated in Delaware, with no material operations of its own, a substantial majority of the operations are conducted through our wholly-owned subsidiaries established in PRC and U.S. We are classified as a foreign enterprise under PRC laws and regulations, and our wholly foreign-owned enterprises in the PRC will be foreign-invested enterprises.

On March 15, 2019 and December 26, 2019, the National People’s Congress, China’s national legislative body (the “NPC”) approved the Foreign Investment Law, and the PRC State Council approved the Implementation Rules of the Foreign Investment Law, respectively, both came into effect on January 1, 2020. Since they are relatively new, uncertainties exist in relation to their interpretation. The Foreign Investment Law grants national treatment to foreign-invested entities, except for those foreign-invested entities that operate in industries specified as either “restricted” or “prohibited” from foreign investment in the Negative List. The Foreign Investment Law provides that foreign-invested entities operating in “restricted” or “prohibited” industries will require market entry clearance and other approvals from relevant PRC government authorities. In accordance with the Foreign Investment Law, the State Council promulgated and approved in 2021 a list of special administrative measures for market access of foreign investments, or the Negative List. Pursuant to the Negative List, the development, manufacture and sale of EVs does not fall within the “prohibited” or “restricted” category. However, since the Negative List has been adjusted and updated almost on an annual basis in the recent years, we cannot assure you that the aforementioned business of EV manufacturing and sales will continuously be beyond the “prohibited” category. If any of our subsidiaries is “restricted” or “prohibited” from foreign investment under the “Negative List” effective at the time, we may be deemed to be in violation of the Foreign Investment Law, may be required to restructure our business operations, any of which may have a material adverse effect on our business operation and the market price of our ordinary shares.

Adverse regulatory developments in China may subject us to additional regulatory review, and additional disclosure requirements and regulatory scrutiny to be adopted by the SEC in response to risks related to recent regulatory developments in China may impose additional compliance requirements for companies like us with China-based operations, all of which could increase our compliance costs, subject us to additional disclosure requirements.

The recent regulatory developments in China, in particular with respect to restrictions on China-based companies raising capital offshore, may lead to additional regulatory review in China over our financing and capital raising activities in the United States. In addition, we may be subject to industry-wide regulations that may be adopted by the relevant PRC authorities, which may have the effect of restricting the scope of our operations in China, or causing the suspension or termination of our business operations in China entirely, all of which will materially and adversely affect our business, financial condition and results of operations. We may have to adjust, modify, or completely change our business operations in response to adverse regulatory changes or policy developments, and we cannot assure you that any remedial action adopted by us can be completed in a timely, cost-efficient, or liability-free manner or at all.

On July 30, 2021, in response to the recent regulatory developments in China and actions adopted by the PRC government, the Chairman of the SEC issued a statement asking the SEC staff to seek additional disclosures from offshore issuers associated with China-based operating companies before their registration statements will be declared effective. On August 1, 2021, the China Securities Regulatory Commission stated in a statement that it had taken note of the new disclosure requirements announced by the SEC regarding the listings of Chinese companies and the recent regulatory development in China, and that both countries should strengthen communications on regulating China-related issuers. We cannot guarantee that we will not be subject to tightened regulatory review and we could be exposed to government interference in China.

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Compliance with China’s new Data Security Law, Measures on Cybersecurity Review, Personal Information Protection Law (second draft for consultation), regulations and guidelines relating to the multi-level protection scheme and any other future laws and regulations may entail significant expenses and could materially affect our business. 

China has implemented or will implement rules and is considering a number of additional proposals relating to data protection. China’s new Data Security Law took effect in September 2021. The Data Security Law provides that the data processing activities must be conducted based on “data classification and hierarchical protection system” for the purpose of data protection and prohibits entities in China from transferring data stored in China to foreign law enforcement agencies or judicial authorities without prior approval by the Chinese government.

Additionally, China’s Cyber Security Law requires companies to take certain organizational, technical and administrative measures and other necessary measures to ensure the security of their networks and data stored on their networks. Specifically, the Cyber Security Law provides that China adopt a multi-level protection scheme (MLPS), under which network operators are required to perform obligations of security protection to ensure that the network is free from interference, disruption or unauthorized access, and prevent network data from being disclosed, stolen or tampered. Under the MLPS, entities operating information systems must have a thorough assessment of the risks and the conditions of their information and network systems to determine the level to which the entity’s information and network systems belong-from the lowest Level 1 to the highest Level 5 pursuant to a series of national standards on the grading and implementation of the classified protection of cyber security. The grading result will determine the set of security protection obligations that entities must comply with. Entities classified as Level 2 or above should report the grade to the relevant government authority for examination and approval.

Recently, the Cyberspace Administration of China has taken action against several Chinese internet companies in connection with their initial public offerings on U.S. securities exchanges, for alleged national security risks and improper collection and use of the personal information of Chinese data subjects. According to the official announcement, the action was initiated based on the National Security Law, the Cyber Security Law and the Measures on Cybersecurity Review, which are aimed at “preventing national data security risks, maintaining national security and safeguarding public interests.” On July 10, 2021, the Cyberspace Administration of China published a revised draft of the Measures on Cybersecurity Review, expanding the cybersecurity review to data processing operators in possession of personal information of over 1 million users if the operators intend to list their securities in a foreign country.

It is unclear at the present time how widespread the cybersecurity review requirement and the enforcement action will be and what effect they will have on our business. China’s regulators may impose penalties for non-compliance ranging from fines or suspension of operations, and this could lead to us delisting from the U.S. stock market.

Also, on August 20, 2021, the National People’s Congress passed the Personal Information Protection Law, which has been implemented on November 1, 2021. The law creates a comprehensive set of data privacy and protection requirements that apply to the processing of personal information and expands data protection compliance obligations to cover the processing of personal information of persons by organizations and individuals in China, and the processing of personal information of persons in China outside of China if such processing is for purposes of providing products and services to, or analyzing and evaluating the behavior of, persons in China. The law also proposes that critical information infrastructure operators and personal information processing entities who process personal information meeting a volume threshold to-be-set by Chinese cyberspace regulators are also required to store in China personal information generated or collected in China, and to pass a security assessment administered by Chinese cyberspace regulators for any export of such personal information. Lastly, the draft contains proposals for significant fines for serious violations of up to RMB 50 million or 5% of annual revenues from the prior year.

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Interpretation, application and enforcement of these laws, rules and regulations evolve from time to time and their scope may continually change, through new legislation, amendments to existing legislation and changes in enforcement. Compliance with the Cyber Security Law and the Data Security Law could significantly increase the cost to us of providing our service offerings, require significant changes to our operations or even prevent us from providing certain service offerings in jurisdictions in which we currently operate or in which we may operate in the future. Despite our efforts to comply with applicable laws, regulations and other obligations relating to privacy, data protection and information security, it is possible that our practices, offerings or platform could fail to meet all of the requirements imposed on us by the Cyber Security Law, the Data Security Law and/or related implementing regulations. Any failure on our part to comply with such law or regulations or any other obligations relating to privacy, data protection or information security, or any compromise of security that results in unauthorized access, use or release of personally identifiable information or other data, or the perception or allegation that any of the foregoing types of failure or compromise has occurred, could damage our reputation, discourage new and existing counterparties from contracting with us or result in investigations, fines, suspension or other penalties by Chinese government authorities and private claims or litigation, any of which could materially adversely affect our business, financial condition and results of operations. Even if our practices are not subject to legal challenge, the perception of privacy concerns, whether or not valid, may harm our reputation and brand and adversely affect our business, financial condition and results of operations. Moreover, the legal uncertainty created by the Data Security Law and the recent Chinese government actions could materially adversely affect our ability, on favorable terms, to raise capital, including engaging in follow-on offerings of our securities in the U.S. market.

Recent greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our business and our offering.

On December 28, 2021, the CAC and other relevant PRC governmental authorities jointly promulgated the Measures for Cybersecurity Review (the “Measures”), which took effect on February 15, 2022. The Measures provide that net platform operators engaging in data processing activities that affect or may affect national security must be subject to cybersecurity review by the Cybersecurity Review Office of the PRC. According to the Cybersecurity Review Measures, a cybersecurity review assesses potential national security risks that may be brought about by any procurement, data processing, or overseas listing. The Measures require that an online platform operator which possesses the personal information of at least one million users must apply for a cybersecurity review by the CAC if it intends to be listed in foreign countries.

On November 14, 2021, the CAC published the Regulations on Network Data Security (draft for public comments) (the “Draft Regulation”), which provides that data processing operators engaging in data processing activities that affect or may affect national security must be subject to network data security review by the relevant Cyberspace Administration of the PRC. According to the Draft Regulation, data processing operators who possess personal data of at least one million users or collect data that affects or may affect national security must be subject to network data security review by the relevant Cyberspace Administration of the PRC. The deadline for public comments on the Draft Regulation was December 13, 2021.

The management believes that as of the date of this report: (i) the Company does not hold personal information of over one million users; (ii) the Company and its subsidiaries have not been informed by any PRC governmental authority of any requirement that it file for a cybersecurity review; and (iii) the Company and its subsidiaries have never disclosed any customer or supplier information within China (except when requested by related parties, the company and its subsidiaries tailor their customer or supplier information disclosures to the narrowest possible scope), therefore, the Company believes it is not required to pass cybersecurity review of CAC. Further, as of the date of this report, Kandi Technologies and its subsidiaries 1) did not collect any data that will or may negatively influence PRC’s national security; and 2) strictly follow the relevant PRC laws and regulations. There remains uncertainty, however, as to how the Measures and the Draft Regulation will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Measures and the Draft Regulation. If any such new laws, regulations, rules, or implementation and interpretation come into effect, we will take all reasonable measures and actions to comply and to minimize the adverse effect of such laws on us. We cannot guarantee, however, that we will not be subject to cybersecurity review and network data security review in the future. During such reviews, we may be required to suspend our operation or experience other disruptions to our operations. Cybersecurity review and network data security review could also result in negative publicity with respect to our Company and diversion of our managerial and financial resources, which could materially and adversely affect our business, financial conditions, and results of operations.

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The approval of the China Securities Regulatory Commission (“CSRC”) is required in connection with future offerings under the Trial Measures, and, we cannot assure you that we can obtain such approval on time.

The Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in 2006 and amended in 2009, require an overseas special purpose vehicle formed for listing purposes through acquisitions of PRC domestic companies and controlled by PRC companies or individuals to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange. In September 2006, the CSRC published a notice on its official website specifying documents and materials required to be submitted to it by a special purpose vehicle seeking CSRC approval of its overseas listings. However, substantial uncertainty remains regarding the scope and applicability of the M&A Rules to offshore special purpose vehicles. Currently, there is no consensus among leading PRC law firms regarding the scope and applicability of the CSRC approval requirement.

Based on our understanding of the Chinese laws and regulations in effect at the time of this report, we will not be required to submit an application to the CSRC for its approval of an offering in a foreseeable future and the listing and trading of our common stock on Nasdaq. However, there remains some uncertainty as to how the M&A Rules will be interpreted or implemented in the context of an overseas offering and our belief is subject to any new laws, rules and regulations or detailed implementations and interpretations in any form relating to the M&A Rules or overseas offering approval. We cannot assure you that relevant PRC governmental agencies, including the CSRC, would reach the same conclusion as we do.

Recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the “Opinions on Severely Cracking Down on Illegal Securities Activities According to Law,” or the Opinions, which was made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory systems will be taken to deal with the risks and incidents of China-concept overseas listed companies, and cybersecurity and data privacy protection requirements and similar matters. On July 10, 2021, the Cyberspace Administration of China issued a revised draft of the Measures for Cybersecurity Review for public comments, which required that, among others, in addition to “operator of critical information infrastructure”, any “data processor” controlling personal information of no less than one million users which seeks to list in a foreign stock exchange should also be subject to cybersecurity review, and further elaborated the factors to be considered when assessing the national security risks of the relevant activities. We do not believe we are among the “operator of critical information infrastructure” or “data processor” as mentioned above. Based on the above and our understanding of the Chinese laws and regulations currently in effect as of the date of this report, we will not be required to submit an application to the CSRC or the CAC for the approval of a future offering and the listing and trading of our securities on the Nasdaq. However, the revised draft of the Measures for Cybersecurity Review is in the process of being formulated and the Opinions remain unclear on how it will be interpreted, amended and implemented by the relevant PRC governmental authorities. Thus, it is still uncertain how PRC governmental authorities will regulate overseas listing in general and whether we are required to obtain any specific regulatory approvals. Furthermore, if the CSRC or other regulatory agencies later promulgate new rules or explanations requiring that we obtain their approvals for future offering and any follow-on offering, we may be unable to obtain such approvals which could significantly limit or completely hinder our ability to offer or continue to offer securities to our investors. For instance, in the event that the CSRC approval or any regulatory approval is required for a future offering, or if the CSRC or any other PRC government authorities promulgates any new laws, rules or regulations or any interpretation or implements rules before our listing that would require us to obtain the CSRC or any other governmental approval for a future offering, we may face sanctions by the CSRC or other PRC regulatory agencies if we fail to seek CSRC approval for such future offering. These sanctions may include fines and penalties on our operations in the PRC, limitations on our operating privileges in the PRC, delays in or restrictions on the repatriation of the proceeds from a future offering into the PRC, restrictions on or prohibition of the payments or remittance of dividends by our PRC subsidiary, or other actions that could have a material and adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our common stock. The CSRC or other PRC regulatory agencies may also take actions requiring us, or making it advisable for us, to halt a future offering before the settlement and delivery of the securities that we offer. Consequently, if you engage in market trading or other activities in anticipation of and prior to the settlement and delivery of the securities we offer, you would be doing so at the risk that the settlement and delivery may not occur. Any uncertainties or negative publicity regarding such approval requirements could have a material adverse effect on our ability to complete any follow-on offering of our securities or the market for and market price of our common stock.

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On December 24, 2021, the China Securities Regulatory Commission, or the “CSRC”, published draft regulations (the “Draft Rules”) on domestic enterprises issuing securities and being listed overseas. The Draft Rules lay out specific filing requirements for overseas listing and offering by PRC domestic companies and include unified regulation management and strengthening regulatory coordination. On February 17, 2023, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”), which took effect on March 31, 2023. The Trial Measures supersede the Draft Rules and clarified and emphasized several aspects, which include but are not limited to: (1) criteria to determine whether an issuer will be required to go through the filing procedures under the Trial Measures; (2) exemptions from immediate filing requirements for issuers including those that have already been listed or registered but not yet listed in foreign securities markets, including U.S. markets, prior to the effective date of the Trial Measures; (3) a negative list of types of issuers banned from listing or offering overseas, such as issuers whose affiliates have been recently convicted of bribery and corruption; (4) issuers’ compliance with web security, data security, and other national security laws and regulations; (5) issuers’ filing and reporting obligations, such as obligation to file with the CSRC after it submits an application for initial public offering to overseas regulators, and obligation after offering or listing overseas to report to the CSRC material events including change of control or voluntary or forced delisting of the issuer; and (6) the CSRC’s authority to fine both issuers and their shareholders for failure to comply with the Trial Measures, including failure to comply with filing obligations or committing fraud and misrepresentation. Because we are already publicly listed in the U.S., the Trial Measures do not impose additional regulatory burden on us beyond the obligation to report to the CSRC any future offerings of our securities, or material events such as a change of control or delisting. As the Trial Measures are newly issued, there remains uncertainty as to how it will be interpreted or implemented. Therefore, there is uncertainty that if we are subject to such filing requirements under the Trial Measures, we will be able to get clearance from the CSRC in a timely fashion.  

It may be difficult for U.S. regulators, such as the Department of Justice, the SEC, and other authorities, to conduct investigation or collect evidence within China.

Shareholder claims or regulatory investigation that are common in the United States generally are difficult to pursue as a matter of law or practicality in China. For example, in China, there are significant legal and other obstacles to providing information needed for regulatory investigations or litigations initiated outside China. Although the authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with regulatory authorities in the Unities States-including the SEC and the Department of Justice-may not be efficient in the absence of mutual and practical cooperation mechanism. Furthermore, according to Article 177 of the PRC Securities Law, which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the PRC territory. Currently the management of the Company understand that the Article 177 does not apply to the Company and will not negatively influence the authorities, such as the SEC, or the Department of Justice, to conduct investigation or collect evidence towards us. However, since the PRC Securities Law is relatively new and detailed interpretation of or implementation rules under Article 177 have been limited, we cannot assure you that the PRC legislative authority will have the same understanding as us and the inability for an overseas securities regulator to directly conduct investigation or evidence collection activities within China may further increase the difficulties you face in protecting your interests.

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The Holding Foreign Companies Accountable Act, or the HFCAA, and the related regulations continue to evolve. Further implementations and interpretations of or amendments to the HFCAA or the related regulations, or a PCAOB determination of its lack of sufficient access to inspect our auditor, might pose regulatory risks to and impose restrictions on us because of our operations in mainland China.

On May 20, 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act (the “HFCAA”) requiring a foreign company to certify it is not owned or controlled by a foreign government if the PCAOB is unable to audit specified reports because the Company uses a foreign auditor not subject to PCAOB inspection. If the PCAOB is unable to inspect the Company’s auditors for three consecutive years, the issuer’s securities are prohibited to trade on a national securities exchange or in the over the counter trading market in the U.S. On December 18, 2020, the HFCAA was signed into law. The HFCAA has since then been subject to amendments by the U.S. Congress and interpretations and rulemaking by the SEC.

On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act (“AHFCAA”), which proposes to reduce the period of time for foreign companies to comply with PCAOB audits from three to two consecutive years, thus reducing the time period before the securities of such foreign companies may be prohibited from trading or delisted. On December 29, 2022, the Consolidated Appropriations Act, 2023 (the “CAA”), which AHFCAA constitute a part, was signed into law, which officially reduced the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two, thus, reducing the time before an applicable issuer’s securities may be prohibited from trading or delisted.

On December 16, 2021, PCAOB announced the PCAOB HFCAA determinations relating to the PCAOB’s inability to inspect or investigate completely registered public accounting firms headquartered in mainland China of the PRC or Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in the PRC or Hong Kong. The inability of the PCAOB to conduct inspections of auditors in China made it more difficult to evaluate the effectiveness of these accounting firms’ audit procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections, which could cause existing and potential investors in issuers operating in China to lose confidence in such issuers’ procedures and reported financial information and the quality of financial statements.

Our previous auditor, Kreit & Chiu CPA LLP, and ARK Pro CPA & Co (“ARK”), our current auditor, both are independent registered public accounting firms registered with the PCAOB, and are subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess our auditor’s compliance with the applicable professional standards. Both our auditors are subject to inspection by the PCAOB on a regular basis. Our previous and current auditor are not among the firms listed on the PCAOB Determination List issued in December 2021.

On August 26, 2022, the PCAOB announced and signed a Statement of Protocol (the “Protocol”) with the China Securities Regulatory Commission and the Ministry of Finance of the People’s Republic of China (together, the “PRC Authorities”). The Protocol provides the PCAOB with: (1) sole discretion to select the firms, audit engagements and potential violations it inspects and investigates, without any involvement of Chinese authorities; (2) procedures for PCAOB inspectors and investigators to view complete audit work papers with all information included and for the PCAOB to retain information as needed; (3) direct access to interview and take testimony from all personnel associated with the audits the PCAOB inspects or investigates.

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On December 15, 2022, the PCAOB announced in its 2022 HFCAA Determination Report (the “2022 Report”) its determination that the PCAOB was able to secure complete access to inspect and investigate audit firms in the People’s Republic of China (PRC), and the PCAOB Board voted to vacate previous determinations to the contrary. According to the 2022 Report, this determination was reached after the PCAOB had thoroughly tested compliance with every aspect of the Protocol necessary to determine complete access, including on-site inspections and investigations in a manner fully consistent with the PCAOB’s methodology and approach in the U.S. and globally. According to the 2022 Report, the PRC Authorities had fully assisted and cooperated with the PCAOB in carrying out the inspections and investigations according to the Protocol, and have agreed to continue to assist the PCAOB’s investigations and inspections in the future. The PCAOB may reassess its determinations and issue new determinations consistent with the HFCAA at any time.

While the HFCAA and AHFCAA are not currently applicable to the Company because the Company’s current auditors are subject to PCAOB review, if this changes in the future for any reason, the Company may be subject to the HFCAA and AHFCAA. The implications of this regulation if the Company were to become subject to it are uncertain. Such uncertainty could cause the market price of our common stock to be materially and adversely affected, and our securities could be delisted or prohibited from being traded on Nasdaq earlier than would be required by the HFCAA and AHFCAA. If our common stock is unable to be listed on another securities exchange by then, such a delisting would substantially impair your ability to sell or purchase the common stock when you wish to do so, and the risk and uncertainty associated with a potential delisting would have a negative impact on the price of the common stock.

The economy of China had experienced unprecedented growth. This growth has slowed in the recent years, and if the growth of the economy continues to slow or if the economy contracts, our financial condition may be materially and adversely affected.

The rapid growth of the Chinese economy had historically resulted in widespread growth opportunities for industries across China. This growth has slowed in the recent years. As a result of the global financial crisis due to the war in Ukraine and the COVID-19 pandemic, enterprises are becoming more and more difficult to gain comparable access to the same amounts of capital available in past years, which may have an adverse effect on the business climate and growth of private enterprises in China, including us. An economic slowdown could have an adverse effect on our sales and may increase our costs. Further, if economic growth continues to slow, and if, in conjunction, inflation continues unchecked, our costs would be likely to increase, and there can be no assurance that we would be able to increase our prices to an extent that would offset the increase in our expenses.

In addition, a tightened labor markets in our geographic region may result in fewer qualified applicants for job openings in our facilities. Further, higher wages, related labor costs and other increasing cost trends may negatively impact our results.

Uncertainties with respect to the Chinese legal system could have a material adverse effect on us and may restrict the level of legal protections to foreign investors.

China’s legal system is based on statutory law. Unlike the common law system, statutory law is based primarily on written statutes. Previous court decisions may be cited as persuasive authority but do not have a binding effect. Since 1979, the Chinese government has been promulgating and amending laws and regulations regarding economic matters, such as corporate organization and governance, foreign investment, commerce, taxation and trade. However, since these laws and regulations are relatively new, and the Chinese legal system continues to rapidly evolve, the interpretation of many laws, regulations and rules is not always uniform and enforcement of these laws, regulations and rules involves uncertainties, which may limit legal protections available to us.

In addition, any litigation in China may be protracted and may result in substantial costs and diversion of resources and management’s attention. The legal system in China cannot provide investors with the same level of protection as in the U.S. The Company is governed by laws and regulations generally applicable to local enterprises in China. Many of these laws and regulations were recently introduced and remain experimental in nature and subject to changes and refinements. Interpretation, implementation and enforcement of the existing laws and regulations can be uncertain and unpredictable and therefore may restrict the legal protections available to foreign investors.

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Changes in currency conversion policies in China may have a material adverse effect on us.

Renminbi (“RMB”) is still not a freely exchangeable currency. Since 1998, the State Administration of Foreign Exchange of China has promulgated a series of circulars and rules in order to enhance verification of foreign exchange payments under Chinese entity’s current account items, and has imposed strict requirements on borrowing and repayments of foreign exchange debts from and to foreign creditors under the capital account items and on the creation of foreign security in favor of foreign creditors.

This may complicate foreign exchange payments to foreign creditors under the current account items and thus may affect the ability to borrow under international commercial loans, the creation of foreign security, and the borrowing of RMB under guarantees in foreign currencies. Moreover, the value of RMB may become subject to supply and demand, which could be largely impacted by international economic and political environments. Any fluctuations in the exchange rate of RMB could have an adverse effect on the operational and financial condition of the Company and its subsidiaries in China.

Restrictions on currency exchange may limit our ability to receive and use our revenue effectively.

Some of our revenue is denominated in Renminbi. As a result, restrictions on currency exchange may limit our ability to use revenue generated in Renminbi to fund any business activities we may have outside China in the future or to make dividend payments to our shareholders in U.S. dollars. Under current PRC laws and regulations, Renminbi is freely convertible for current account items, such as trade and service-related foreign exchange transactions and dividend distributions. However, Renminbi is not freely convertible for direct investment or loans or investments in securities outside China, unless such use is approved by SAFE. For example, foreign exchange transactions under our subsidiary’s capital account, including principal payments in respect of foreign currency-denominated obligations, remain subject to significant foreign exchange controls and the approval requirement of SAFE. These limitations could affect our ability to convert Renminbi into foreign currency for capital expenditures. To the extent cash and/or assets in the business is in the PRC or a PRC entity, the funds and/or assets may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on the ability of us or our subsidiaries by the PRC government to transfer cash and/or assets. And the Chinese government is further strengthening the control of foreign exchange, we will not be able to change the Chinese government’s decision in our own power. 

Fluctuations in exchange rates could adversely affect our business and the value of our securities.

The value of our common stock will be indirectly affected by the foreign exchange rate between U.S. dollars and RMB and between those currencies and other currencies in which our sales may be denominated. Because substantially all of our earnings and cash assets are denominated in RMB, fluctuations in the exchange rate between the U.S. dollar and the RMB will affect our balance sheet and our earnings per share in U.S. dollars. In addition, appreciation or depreciation in the value of the RMB relative to the U.S. dollar would affect our financial results reported in U.S. dollar terms without giving effect to any underlying change in our business or results of operations.

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Investors may experience difficulties in effecting service of legal process, enforcing judgements or bringing original actions based on United States or foreign laws against us or our management.

We, through our PRC operating entities, conduct substantially all of our operations in China and almost all of our assets are located in China. In addition, almost all of our senior executive officers reside in China. As a result, it may not be possible to effect service of process on our senior executive officers within the United States or elsewhere outside China, including with respect to matters arising under U.S. federal securities laws or applicable state securities laws. Moreover, our Chinese counsel has advised us that China does not have treaties with the United States or many other countries providing for the reciprocal recognition and enforcement of court orders and final judgments.

From time to time, Kandi is involved in several litigations that we believe to be without merit, some have been dismissed, while others are still pending. We believe we can successfully defend ourselves in such litigations. Moreover, if finally judgements are made against us, certain plaintiffs may face substantial difficulties in executing such judgement since China does not have treaties with the United States and certain other countries providing for the reciprocal recognition and enforcement of court orders and final judgments.

Risks Associated With the Export of Kandi Electric Vehicles to and sale in the United States

The enactment of Inflation Reduction Act (IR Act) of 2022 may influence the value of our securities.

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal excise tax on certain repurchases (including redemptions) of stock or shares by publicly traded domestic (i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded foreign corporations, if during that taxable year, the total value of the stock repurchased is more than $1 million. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock or share issuances against the fair market value of stock or share repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The IR Act applies only to repurchases that occur after December 31, 2022. The Company repurchased 184,566 shares and 540,362 shares of the Company’s stock in December 2023 and the first two months of 2024, respectively, such repurchases are subject to the IR Act, however, we currently do not anticipate this provision of the IR Act to have any material impact on our financial position, results of operations or cash flows.

Our intellectual property rights may be harmed by competitors preemptively filing legitimate and illegitimate patents, which could create significant barriers for our business by preventing us from adequately protecting our intellectual property.

Multinational automobile companies usually obtain patent portfolios consisting of basic patents and peripheral patents on improvements and related technologies, thereby creating patent barriers in the industry. At the same time, certain multinational automobile companies also maliciously apply for patents, in order to obtain an unlawful competitive advantage or to directly receive invalid rights and use patents as weapons in litigation. New energy vehicles are emerging products in worldwide markets in recent years, while relevant and related patents in the industry are still in force. Kandi may be seriously adversely affected by intellectual property rights barriers through participation in the competitive international automobile market. Therefore, Kandi faces risks of patent barriers and intellectual property litigation in the future.

Failures in our U.S. business may present a risk of significant losses to our business.

Our automobile product export and overseas operations sections involve import and export currency exchange, insurance, ocean transportation, customs clearance and various other logistical procedures. A loss of trust in any part of the chain can lead to the failure of transactions, which in turn causes huge losses to our enterprise. In the future, the Company will expand its overseas market. Any insufficient assessment of the capital strength and commercial credit of its partners, or any fraud in risk prevention and risk control systems may cause economic losses for the Company due to its business partners’ breach of contract or even fraud. In short, shipping Kandi electric vehicles and products to the United States may have risks in the U.S. operation, and import and export trade process.

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The United States has strict environmental laws and regulations which may cause us to expend significant sums to comply with such laws and regulations.

The United States and other developed countries have strong awareness of environmental protection and product safety regulations. The penalties for violating environmental laws in such countries are extremely high. Developed countries have mature and highly saturated automobile markets. Costs associated with maintaining controls over atmospheric emissions, harmful toxic substances, and products safety are getting higher in an accelerated manner. The process for a company to obtain the applicable certifications is time-consuming, complicated and expensive. Kandi will also face the adverse impact of compliance with policy and regulatory standards in the United States. Thus, Kandi may face the risk of not being able to sustain its business in accordance with US and state environmental protection and product safety policies and regulations.

Our short-term financial performance may suffer due to our investment in expanding our presence and sales in the United States.

Chinese auto products have market competition disadvantages in terms of technology content, product structure, product quality and brand influence. It is difficult to reverse the sentiment of “low quality and low price” that has followed Chinese automobiles for a long time, resulting in weakened bargaining power for Chinese auto companies and generally low gross profit margins. Kandi is expanding into the US market and rely on overseas distributors to establish a marketing network and after-sales service guarantee system. All actions require the Company to invest a certain amount of resources. Additionally electric vehicle sales may face a slow growth period. In a certain period of time, the growth of operating income lags behind the increase in sales inputs. At the same time, the Company cannot predict the direct economic loss caused by an unsatisfactory market expansion caused by the adverse factors of market competition. Cash flows for Kandi and SC Autosports may be significantly adversely affected by large investments and small revenues in the short term. Therefore, there may be a risk that the short-term financial performance indicators will fall due to factors such as the expansion of resources in overseas markets.

Lack of authorized dealer and absence of after-sales maintenance may negatively affect our business and sales in U.S.

In U.S. market, without authorized dealers, the delivery of EVs and pure electric off-road vehicles may be delayed. Hence customers may delay, reduce or cancel the purchase orders of our EVs and pure electric off-road vehicles, and our business operations may be adversely affected. At the same time, in the absence of after-sales maintenance by the dealers, not only the cost and complexity of maintenance will be increased, it will also affect customers’ access to warranty and other after-sales service support, which may then weaken customers’ confidence in our brand, and we may even encounter potential lawsuits due to lack of support to the customers. This can affect our brand and business, and bring an adverse impact to the financial condition and operating performance of the Company.

Risks Relating to Ownership of Our Securities

Our stock price may be volatile, which may result in losses for our shareholders.

The stock markets have experienced significant price and trading volume fluctuations. Although our stock has been trading on the NASDAQ Global Select Market since January 2, 2014, the trading price of our common stock may be volatile and could fluctuate significantly in response to many factors, including the following, some of which are beyond our control:

● variations in our operating results;

● changes in expectations of our future financial performance, including financial estimates by securities analysts and investors;

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● changes in operating and stock price performance of other companies in our industry;

● additions or departures of key personnel; or

● general sentiment on China-based companies’ securities.

These fluctuations, as well as general economic and political conditions unrelated to our performance, may adversely affect the price of our common stock.

Mr. Hu, our Chairman of our Board, is the beneficial owner of a substantial portion of our outstanding common stock, which may enable Mr. Hu to exert significant influence on corporate actions.

Excelvantage Group Limited (“Excelvantage”) controls approximately 14.68% of our outstanding shares of common stock as of December 31, 2023. Hu Xiaoming, the Company’s Chairman of the Board of Directors, is the sole stockholder of Excelvantage. Together with the shares held through Excelvantage, Mr. Hu controls 16.52% of our outstanding shares of common stock, which could have a substantial impact on matters requiring the vote of our shareholders, including the election of our directors and other corporate actions. This control could delay, defer or prevent others from initiating a potential merger, takeover or other change in control, even if these actions would benefit our other shareholders and the Company. This control could adversely affect the voting and other rights of our other shareholders and could depress the market price of our common stock.

Our ability to distribute dividends is restricted by PRC Company Law and Foreign Investment Law.

According to the PRC Company Law and Foreign Investment Law, our PRC subsidiary, as a foreign-invested enterprise, or FIE, we may only pay dividends out of their accumulated profit, if any, as determined in accordance with PRC accounting standards and regulations. In addition we are required to draw 10% of its after-tax profits each year, if any, to fund a common reserve, which may stop drawing its after-tax profits if the aggregate balance of the common reserve has already accounted for over 50% of its registered capital. The reserve funds are not distributable as cash dividends. A PRC company is not permitted to distribute any profits until any losses from prior fiscal years have been offset. Our ability to distribute dividends may be restricted because of the above-mentioned regulations. We may even cannot distribute dividends if we are suffering loss in certain fiscal year in the future.

We do not anticipate paying cash dividends to our common shareholders.

We presently do not anticipate that we will pay dividends on any of our common stock in the foreseeable future. If payment of dividends does occur at some point in the future, it would be contingent upon our revenues and earnings, if any, capital requirements, and general financial condition. The payment of any common stock dividends will be within the discretion of our Board. We presently intend to retain all earnings in order to implement our business plan; accordingly, we do not anticipate the declaration of any dividends for common stock in the foreseeable future.

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The limitation of monetary liability against our directors, officers and employees under Delaware Law and the existence of statutory indemnification rights of our directors, officers and employees may result in substantial expenditures by our company and may discourage lawsuits against our directors, officers and employees.

Our certificate of incorporation does not contain any specific provisions that limit the liability of our directors for monetary damages to the Company or shareholders; however, we are prepared to indemnify our directors and officers to the extent provided for by Delaware law. We may also have included contractual indemnification obligations in our employment agreements with our officers. The foregoing indemnification obligations could result in the Company incurring substantial expenditures to cover the cost of settlement or damage awards against its directors and officers, which we may be unable to recoup. These provisions and resultant costs may also discourage the Company from bringing a lawsuit against directors and officers for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our shareholders against our directors and officers even though such actions, if successful, might otherwise benefit the Company and shareholders.

We may require additional capital, and the sale of additional shares or other equity securities could result in additional dilution to our shareholders.

In the future, we may require additional cash resources due to changed business conditions or other future developments, including investments or acquisitions that we may decide to pursue. If our resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity securities could result in dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations. We cannot assure investors that financing will be available, if at all, in amounts or on terms acceptable to us.

Our business is subject to changing regulations related to corporate governance and public disclosure that may increase both our costs and the risk of noncompliance.

Because our common stock is publicly traded, we are subject to certain rules and regulations of federal, state and financial market exchange entities charged with the protection of investors and the oversight of companies whose securities are publicly traded. These entities, including the Public Company Accounting Oversight Board, the SEC and NASDAQ, have issued requirements and regulations and continue to develop additional regulations and requirements in response to corporate scandals and laws enacted by Congress. Our efforts to comply with these regulations have resulted in, and are likely to continue resulting in, increased general and administrative expenses and diversion of management time and attention from revenue generating activities to compliance activities. Because new and modified laws, regulations and standards are subject to varying interpretations in many cases due to their lack of specificity, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices.

Techniques employed by manipulative short sellers in Chinese small cap stocks may drive down the market price of our common stock.

Short selling is the practice of selling securities that the seller does not own but rather has, supposedly, borrowed from a third party with the intention of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. As it is therefore in the short seller’s best interests for the price of the stock to decline, many short sellers (sometimes known as “disclosed shorts”) publish, or arrange for the publication of, negative opinions or reports regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling a stock short. These short attacks have, in the past, led to selling of shares in the market, on occasion in large scale and broad base.

Short seller publications are not regulated by any governmental, self-regulatory organization or other official authority in the U.S. and are not subject to the certification requirements imposed by the Securities and Exchange Commission in Regulation AC (Regulation Analyst Certification) and, accordingly, the opinions they express may be based on distortions of actual facts or, in some cases, fabrications of facts. In light of the limited risks involved in publishing such information, and the enormous profit that can be made from running just one successful short attack, unless the short sellers become subject to significant penalties, it is more likely than not that disclosed short sellers will continue to issue such reports.

While we intend to strongly defend our public filings against any such short seller attack, often times we are constrained, either by principles of freedom of speech, applicable state law (often called “Anti-SLAPP statutes”), or issues of commercial confidentiality, in the manner in which we can proceed against the relevant short seller. You should be aware that in light of the relative freedom to operate that such persons enjoy - oftentimes blogging from outside the U.S. with little or no assets or identity requirements - should we be targeted for such an attack, our stock will likely suffer from a temporary, or possibly long term, decline in market price should the rumors created not be dismissed by market participants.

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Risks Relating to the Reincorporation

Your rights as a shareholder of Kandi will change as a result of the Reincorporation and you may not be afforded as many rights as a shareholder of Kandi BVI under applicable laws and the Kandi BVI memorandum and articles of association as you were as a shareholder of Kandi under applicable laws and the Kandi certificate of incorporation and bylaws.

Following the consummation of the Reincorporation, the resulting company’s corporate affairs will be governed by its memorandum and articles of association, the BVI Business Companies Act, 2004 (as amended) of the British Virgin Islands (the “Act”) and the common law of the British Virgin Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibility of the directors under BVI law are governed by the Act and the common law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the British Virgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of shareholders and the fiduciary responsibilities of directors under BVI law may not be as clearly established as they would be under statutes or judicial precedent in the state of Delaware. In particular, the British Virgin Islands has a less developed body of securities laws as compared to the United States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.

Although we have attempted to preserve in the memorandum and articles of association of Kandi BVI the same allocation of material rights and powers between the shareholders and our Board of Directors that exists under Kandi’s bylaws and certificate of incorporation, because of differences between Delaware law and British Virgin Islands law and differences between the governing documents of Kandi and Kandi BVI, your rights as a shareholder in Kandi BVI will not be the same as your rights as a shareholder in Kandi.

BVI companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect their interests.

BVI companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstances in which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights of shareholders of a BVI company being more limited than those of shareholders of a company organized in the United States. Accordingly, Kandi BVI shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The BVI courts are also unlikely to recognize or enforce against Kandi BVI’s judgments of courts in the United States based on certain liability provisions of U.S. securities law and to impose liabilities against it, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.

Under the laws of the British Virgin Islands, there are some statutory provisions for the protection of minority shareholders under the Act. The principal protection under the Act is that shareholders may bring an action to enforce the memorandum and articles of association of a BVI company. The Act sets forth the procedure to bring such a claim. Shareholders of a BVI Company are entitled to have the affairs of the company conducted in accordance with the general law and the memorandum and articles of association. Pursuant to Kandi BVI’s constitutional documents, the company is obliged to hold an annual general meeting unless the Company elects to rely on the exemption available under the NASDAQ Stock Market by following applicable procedures. BVI companies are not obligated to appoint an independent auditor and shareholders are not entitled to receive the audited financial statements of the company.

There are common law rights for the protection of shareholders that may be invoked. Such rights have also now been given a statutory basis under the Act. The common law rights are largely dependent on English company law, since the common law of the British Virgin Islands for companies incorporated under the Act is limited. Under the general rule pursuant to English company law, a court will generally refuse to interfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairs by the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and the constituent documents of the company. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions of the company’s memorandum or articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene include the following:

● an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority,

● acts that constitute fraud on the minority where the wrongdoers control the company,

● acts that infringe on the personal rights of the shareholders, such as the right to vote, and

● where the company has not complied with provisions requiring approval of a special or extraordinary majority of shareholders, which are more limited than the rights afforded to minority shareholders under the laws of the State of Delaware in the United States.

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Kandi BVI’s Amended and Restated Articles of Association provide for the exclusive jurisdiction of the Courts of the British Virgin Islands for substantially all disputes between Kandi BVI and its shareholders, which could limit the shareholders’ ability to obtain a favorable judicial forum for disputes with Kandi BVI or its directors, officers, other employees or shareholders.

Kandi BVI’s Amended and Restated Articles of Association provide for the exclusive jurisdiction of the Courts of the British Virgin Islands for the following civil actions:

● any derivative action or proceeding brought on behalf of Kandi BVI, including actions arising under the U.S. federal securities laws;

● any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Kandi BVI to the Kandi BVI or its Members;

● any action asserting a claim arising pursuant to any provision of British Virgin Islands law or Kandi BVI’s Memorandum or Articles of Association;

● any action asserting a claim against the Kandi BVI governed by the internal affairs doctrine.

This exclusive jurisdiction provision may limit a member’s ability to bring a claim in a judicial forum that it finds favorable for disputes with Kandi BVI or any of its directors, officers, other employees or members, which may discourage lawsuits with respect to such claims, although Kandi BVI’s members will not be deemed to have waived Kandi BVI’s compliance with U.S. federal securities laws and the rules and regulations thereunder applicable to foreign private issuers. Alternatively, if a court were to find the exclusive jurisdiction provision contained in the Amended and Restated Articles of Association to be inapplicable or unenforceable in an action, Kandi BVI may incur additional costs associated with resolving such action in other jurisdictions, which could harm Kandi BVI’s business, operating results and financial condition. The exclusive jurisdiction provision would not prevent derivative shareholder actions based on claims arising under U.S. federal securities laws from being raised in a U.S. court and would not prevent a U.S. court from asserting jurisdiction over such claims. However, there is uncertainty whether a U.S. court would enforce the exclusive jurisdiction provision for actions for breach of fiduciary duty and other claims.

As a foreign private issuer, Kandi BVI is permitted to, and Kandi BVI may in the future choose to follow certain corporate governance practices in accordance with British Virgin Island law in lieu of certain NASDAQ requirements applicable to U.S. issuers. As a result, Kandi BVI’s members may not have the protections afforded by these corporate governance requirements, which may make its ordinary shares less attractive to investors or otherwise harm the trading price or value of its ordinary shares.

As a foreign private issuer, Kandi BVI will be permitted to follow certain corporate governance practices in accordance with British Virgin Island laws in lieu of certain NASDAQ requirements, although Kandi BVI will be subject to certain independence requirements with respect to its audit committee under NASDAQ rules. NASDAQ listing rules require, inter alia, that (i) a majority of the board of directors of a listed company be comprised of independent directors; (ii) each listed company have an audit committee comprised of at least three members, each of whom must be an independent director; and (iii) each listed company have a compensation committee comprised of at least two members, each of whom must be an independent director.

Under British Virgin Islands law, the directors of Kandi BVI owe to it fiduciary duties, including a duty of loyalty, a duty to act honestly and a duty to act in good faith and in a manner they believe to be in Kandi BVI’s best interests. The directors also have a duty to exercise the skill they actually possess and such care and diligence that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to Kandi BVI, the directors must ensure compliance with its articles of association, as amended and restated from time to time.

A foreign private issuer must disclose in its annual reports filed with the SEC each NASDAQ requirement it does not comply with, followed by a description of its applicable home country practice. As a company incorporated in the British Virgin Islands and to be listed on the NASDAQ, Kandi BVI may in the future choose to follow its home country practice with respect to the composition of Kandi BVI’s board of directors and Nomination and Compensation Committees. Unlike the requirements of the NASDAQ, Kandi BVI would not be required to:

● independence of board

● independence of committees

● regularly scheduled executive sessions with only independent directors

● adopt and disclose a code of ethics for directors, officers and employees.

Accordingly, if Kandi BVI were to rely on such exemptions, its shareholders would not have the same protection afforded to shareholders of companies that are subject to all of the NASDAQ corporate governance requirements, which could make its ordinary shares less attractive to some investors or could otherwise harm the ordinary share price.

The expected benefits of the Reincorporation may not be realized.

We cannot be assured that all of the goals of the Reincorporation will be achievable, and some or all of the anticipated benefits of the Reincorporation may not occur, particularly as the achievement of the benefits are in many important respects subject to factors that we do not control. These factors would include such things as the reactions of third parties with whom we enter into contracts and do business and the reactions of investors and analysts. In addition, the anticipated reduction of SEC reporting requirements and related expenses may not be achieved in the event of changes to the SEC rules applicable to foreign private issuers or if we fail to qualify as a foreign private issuer. While we expect the Reincorporation will enable us to reduce our operational, administrative, legal and accounting costs over the long term, these benefits may not be achieved.

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As a foreign private issuer, Kandi BVI will not be required to provide its shareholders with the same information as Kandi would if Kandi remained a U.S. public issuer and, as a result, you may not receive as much information about Kandi BVI as you did about Kandi and you may not be afforded the same level of protection as a shareholder of Kandi BVI under applicable laws and the Kandi BVI memorandum and articles of association as you were as a shareholder of Kandi under applicable laws and the Kandi certificate of incorporation and bylaws.

Kandi BVI is expected to qualify as a “foreign private issuer” under the rules and regulations of the SEC. Kandi BVI will remain subject to the mandates of the Sarbanes-Oxley Act, and, as long as the Kandi BVI’s ordinary shares are listed on the NASDAQ, the governance and disclosure rules of that stock exchange. However, as a foreign private issuer, Kandi BVI will be exempt from certain rules under the Exchange Act that would otherwise apply if Kandi BVI were a company incorporated in the United States or did not meet the other conditions to qualify as a foreign private issuer. For example:

● Kandi BVI may include in its SEC filings financial statements prepared in accordance with U.S. GAAP or with IFRS as issued by the IASB without reconciliation to U.S. GAAP;

● Kandi BVI will not be required to provide as many Exchange Act reports, or as frequently or as promptly, as U.S. companies with securities registered under the Exchange Act. For example, Kandi BVI will not be required to file current reports on Form 8-K within four business days from the occurrence of specific material events. Instead, Kandi BVI will need to promptly furnish reports on Form 6-K any information that Kandi BVI (a) makes or is required to make public under the laws of the British Virgin Islands, (b) files or is required to file under the rules of any stock exchange or (iii) otherwise distributes or is required to distribute to its shareholders. Unlike Form 8-K, there is no precise deadline by which Form 6-K must be furnished. In addition, Kandi BVI will not be required to file its annual report on Form 10-K, which may be due as soon as 60 days after its fiscal year end. As a foreign private issuer, Kandi BVI will be required to file an annual report on Form 20-F within four months after its fiscal year end;

● Kandi BVI will not be required to provide the same level of disclosure on certain issues, such as executive compensation;

● Kandi BVI will not be required to conduct advisory votes on executive compensation;

● Kandi BVI will be exempt from filing quarterly reports under the Exchange Act with the SEC;

● Kandi BVI will not be subject to the requirement to comply with Regulation FD, which imposes certain restrictions on the selected disclosure of material information;

● Kandi BVI will not be required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; and

● Kandi BVI will not be required to comply with Section 16 of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and establishing insider liability for profits realized from any “short-swing” trading transaction.

If Kandi BVI takes advantage of these exemptions if the Reincorporation is effected, after the completion of the Reincorporation, if you hold Kandi BVI securities, you may receive less information about Kandi BVI and its business than you currently receive with respect to Kandi and be afforded less protection under the U.S. federal securities laws than you are entitled to currently. However, consistent with our policy of seeking input from, and engaging in discussions with, our shareholders, on executive compensation matters, Kandi BVI intends to provide disclosure relating to its executive compensation philosophy, policies and practices and conduct an advisory vote on executive compensation once every year after the Reincorporation is effected. However, Kandi BVI expects to review this practice after the next such advisory vote and may at that time or in the future determine to conduct such advisory votes more or less frequently or to not conduct them at all.

Changes in domestic and foreign laws, including tax law changes, could adversely affect Kandi BVI, its subsidiaries and its shareholders, and the effective tax rate may increase.

Changes in tax laws, regulations or treaties or the interpretation or enforcement thereof, in both or either of the U.S. or the British Virgin Islands, could adversely affect the tax consequences. While the Reincorporation is not anticipated to have any material impact on the effective tax rate, there is uncertainty regarding the tax policies of the jurisdictions where we operate, and the effective tax rate may increase and any such increase may be material.

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Item 1B. Unresolved Staff Comments.

None.

Item 1C. Cybersecurity.

Governance

Our Director of Internal Control and Chief Financial Officer oversee our cybersecurity risk management program described in “Risk Management and Strategy” below. While the Board of Directors has overall responsibility for risk oversight, it is supported in this regard by the Audit Committee. The Audit Committee assists the Board of Directors in monitoring cybersecurity risk by receiving updates from and engaging in discussions as needed with the Director of Internal Control and the Chief Financial Officer, that cover, among other things, our cybersecurity risk management program, response readiness and training efforts. The Audit Committee updates the full Board of Directors on cybersecurity matters as appropriate.

Risk Management and Strategy

Our cybersecurity risk management strategy focuses on several areas:

● Identification and Reporting: We have implemented a cross-functional approach to assessing, identifying and managing material cybersecurity threats and incidents. Our program includes controls and procedures to identify, classify and escalate certain cybersecurity incidents to provide management visibility and obtain direction from management as to the public disclosure and reporting of material incidents in a timely manner.

● Technical Safeguards: We implement technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality, and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence, as well as outside audits and certifications.

● Incident Response and Recovery Planning: We are establishing incident response, business continuity, and disaster recovery plans designed to address our response to a cybersecurity incident.

● Third-Party Risk Management: We maintain a risk-based approach to identifying and overseeing material cybersecurity threats presented by third parties, including vendors, service providers, and other external users of our systems, as well as the systems of third parties that could adversely impact our business in the event of a material cybersecurity incident affecting those third-party systems, including any outside auditors or consultants who advise on our cybersecurity systems.

● Periodic Assessments: We conduct periodic assessments and testing of our policies, standards, processes, and practices in a manner intended to address cybersecurity threats and events. The results of such assessments, audits, and reviews are evaluated by management and reported to our Audit Committee and our board of directors, and we adjust our cybersecurity policies, standards, processes, and practices as necessary based on the information provided by these assessments, audits, and reviews.

Item 2. Properties.

Kandi had the following granted land use rights as of December 31, 2023:

	Area
Location	(square meters)		Term and Expiration	Certificate No.
Jinhua New Energy Vehicle Town		58,587	Oct 22, 2020 - Oct 22, 2070		33201931343
Zhejiang Qiaoxia Industrial Park		5,864	Apr 03, 2001 - Apr 03, 2051		574-26-36
Zhejiang Qiaoxia Industrial Park		3,851	Jan 21, 2018 - Jan 20, 2068		3310-1414461
Xinyu South of Tantang Road, East of Longteng Road		72,720	Jun 15, 2022 - Dec 2, 2071		36006007453

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All land in China is owned by the government and cannot be sold or transferred by or to any individual or private entity. Instead, the government grants or allocates landholders “land use rights.” There are four methods to acquire land use rights:

● grant of the right to use land;

● assignment of the right to use land;

● lease of the right to use land; or

● allocated land use rights.

In comparison with the western common law concepts, granted land use rights are similar to life estates and allocated land use rights are in some ways similar to leaseholds.

Granted land use rights are provided by the Chinese government in exchange for a grant fee and carry the rights to pledge, mortgage, lease, and transfer during the term of the grant. Land is granted for a fixed term, which is generally 70 years for residential use, 50 years for industrial use, and 40 years for commercial or other use. The term is renewable in theory. Granted land must be used for the specific purpose for which it was granted.

Allocated land use rights cannot be pledged, mortgaged, leased, or transferred. They are generally provided by the government for an indefinite period (usually to state-owned entities) and can be reclaimed by the government at any time. Allocated land use rights may be converted into granted land use rights upon the payment of a grant fee to the government.

Kandi has the following real estate properties:

Jinhua City, Zhejiang

Zhejiang Kandi Technologies owns the following facilities located in Jinhua New Energy Vehicle Town, Jinhua City, Zhejiang Province, China. The table below lists the primary facilities and the status of each facility as of December 31, 2023:

	Area
Description	(square meters)		Status
Factories		84,717	Fully operational
Office		6,195	Fully operational
Staff quarters		5,643	Fully operational
Other		83	Fully operational

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Yongkang City, Zhejiang

Yongkang Scrou owns the following facilities located in Yongkang City, Zhejiang Province, China. The table below lists the primary facilities and the status of each facility:

	Area
Description	(square meters)		Status
Office		1,237	Fully operational
Factories		11,054	Fully operational
Warehouse		341	Fully operational
Multi-purpose room		480	Fully operational

Haikou City, Hainan

In December 2015, the Company signed an investment contract with Haikou State High Technology Industry Development Zone to build the EV production facility in Haikou City for the capacity of an annual production of 100,000 EV products. The Hainan facility’s main project including manufacturing plant and office, main manufacturing equipment.

Project completion acceptance means the process that the responsible construction unit, contractor and inspection and acceptance committee carry out their inspection and appraisal for the overall project after the project is completed and qualified for trial production. The inspection and appraisal are based on design documents, construction acceptance rules and quality inspection standards approved, in accordance with related procedures and formalities. Project completion acceptance is the last step in the whole process of a project construction, and is also necessary before formal production.

Acceptance process mainly includes 1) quality acceptance of buildings organized by government construction regulators; 2) acceptance of fire safety facilities; 3) acceptance of environmental protection technology; and 4) trial production acceptance of production facilities.

As of December 31, 2023, the facilities has been completed and the factory has passed the completion acceptance inspection.

	Area
Description	(square meters)			Status
Floor area of Hainan Factories		145,000	*	Fully operational

* Calculation based on the planning map provided by Haikou State High Technology Industry Development Zone as the land certificate is being processed.

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Xinyu City, Jiangxi

Jiangxi Huiyi owns the following facilities located in Xinyu City, Jiangxi Province, China. The table below lists the primary facilities and the status of each facility:

	Area
Description	(square meters)		Status
Office		3,482	Fully operational
Factories		15,795	Fully operational
Warehouse		6,411	Fully operational
Staff quarters		6,351	Fully operational
Canteen		3,197	Fully operational

Dallas, Texas

Kandi Investments owns the following facilities located in Dallas, Texas. The table below lists the primary facilities and the status of each facility as of December 31, 2023:

	Area
Description	(Sq. Ft.)		Status
Assembly area		43,524	Fully operational
Office		5,536	Fully operational
Show room		5,312	Fully operational

Garland, Texas

Kandi Investments owns the following facilities located in Garland, Texas. The table below lists the primary facilities and the status of each facility as of December 31, 2023:

	Area
Description	(Sq. Ft.)		Status
Warehouse area		74,758	Fully operational

Item 3. Legal Proceedings.

From time to time, the Company is involved in legal matters arising in the ordinary course of business. Except as set forth in Note 23 - COMMITMENTS AND CONTINGENCIES under Item 8 Notes to Consolidated Financial Statements, our management is currently not aware of any legal matters or pending litigation that would have a significant effect on the Company’s results of operation of financial statements. For the detailed discussion of our legal proceedings, please refer to Note 23 - COMMITMENTS AND CONTINGENCIES under Item 8 Notes to Consolidated Financial Statements, which is incorporated by reference herein.

Other than the above described legal proceedings, the Company is not aware of any other legal matters in which any director, officer, or any owner of record or beneficial owner of more than five percent of any class of voting securities of the Company, or any affiliate of any such director, officer, affiliate of the Company, or security holder, is a party adverse to the Company or has a material adverse interest to the Company. No provision has been made in the consolidated financial statements for the above contingencies.

Item 4. Mine Safety Disclosures.

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

On January 2, 2014, our common stock began trading on the NASDAQ Global Select Market under the symbol “KNDI”.

Holders of Common Stock

As of March 8, 2024, there were 45 shareholders of record of our common stock. This does not include all beneficial holders who hold shares through their brokerage accounts.

Dividends

We have never paid cash dividends on our common stock. Our policy is to retain all earnings, if any, to provide funds for the operation and expansion of our business. We do not anticipate paying cash dividends in the foreseeable future. Any future determination to declare cash dividends will be made at the discretion of our Board, subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions and other factors that our Board may deem relevant.

Sales of Unregistered Securities

None.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The Company has not repurchased any common shares during the fiscal year ended December 31, 2023, other than those described below:

On November 21, 2023, the board of directors had authorized the repurchase of up to $30 million worth of the Company’s common stock in open market transactions or in privately negotiated transactions. As of December 31, 2023, the Company had repurchased a total of 184,566 common shares at an average stock price of $2.75 per share under the repurchase plan.

The following table sets forth information regarding shares of our common stock that we repurchased in the fiscal year ended December 31, 2023.

	(a)		(b)		(c)		(d)
Period	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs		Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs
October 1 to October 31, 2023		-	$	-		-	$	-
November 1 to November 30, 2023		-	$	-		-	$	-
December 1 to December 31, 2023		184,566	$	2.75		184,566	$	29,492,444
Total		184,566	$	2.75		184,566	$	29,492,444

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Securities Authorized for Issuance under Equity Compensation Plans

	Equity Compensation Plan Information
Plan category	Number of   securities to be   issued upon exercise of outstanding options, warrants and rights			Weighted- average exercise price of outstanding   options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding   securities reflected   in column (a))
	(a)			(b)		(c)
Equity compensation plans not approved by security holders		N/A		$	N/A		N/A
Equity compensation plans approved by security holders		4,301,358	(1)		3.7		1,152,082
Totals		4,301,358		$	3.7		1,152,082

(1) Include the grant of 68,019 stock options to 8 employees approved by the Compensation Committee of the Board of Directors on July 1, 2023. The options are exercisable at an exercise price of $3.96 per share.

Item 6. [Reserved]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.

Overview

Kandi Technologies Group, Inc. (“Kandi Technologies”) is a Delaware holding company, which is trading on the NASDAQ Global Select Market. As a holding company with no material operations of our own, we conduct a substantial majority of our operations through our wholly-owned subsidiaries established in the People’s Republic of China, or the PRC, including Zhejiang Kandi Technologies Group, Co. Ltd. (“Zhejiang Kandi Technologies”) and U.S. wholly-owned subsidiaries SC Autosports, LLC (“SC Autosports”) and their subsidiaries.

Now with the global trend of “fuel to electrification” of off-road vehicles becoming more and more obvious, we have successfully developed a series of pure electric off-road vehicles and put them on the market in batches, which have been favored by users. Next, we will successively launch various electric off-road vehicles, including electric crossover golf carts and electric UTVs. With the successively introduction of new products, we are confident to achieve sustained growth in the field of the pure electric off-road vehicles. As for our EV business, due to the fact that the Chinese EV market has not entered a healthy and orderly development stage, currently the Company will continue to operate in small-scale, and join back as appropriate when the EV market of China entered a healthy and orderly development stage.

For the year ended December 31, 2023, we recognized total revenue of $123,599,232 as compared to $117,813,049 for the same period of 2022, an increase of $5,786,183 or 4.9%. For the year ended December 31, 2023, we recorded $41,370,023 of gross profit, an increase of 112.0% from the same period of 2022. Gross margin for the year ended December 31, 2023, was 33.5%, compared to 16.6% for the same period of 2022. We recorded a net income of $1,669,767 for the year ended December 31, 2023, compared to a net loss of $12,851,024 in the same period of 2022.

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Results of Operations

Comparison of Years Ended December 31, 2023 and 2022

The following table sets forth the amounts and percentage to revenue of certain items in our condensed consolidated statements of operations and comprehensive income (loss) for the years ended December 31, 2023 and 2022:

	Years Ended
	December 31, 2023			% of Revenue			December 31, 2022			% of Revenue			Change in Amount			Change in %
REVENUES, NET	$	123,599,232			100.0	%	$	117,813,049			100.0	%		5,786,183			4.9	%
COST OF GOODS SOLD		(82,229,209	)		(66.5	)%		(98,295,323	)		(83.4	)%		16,066,114			(16.3	)%
GROSS PROFIT		41,370,023			33.5	%		19,517,726			16.6	%		21,852,297			112.0	%
OPERATING EXPENSE:
Research and development		(4,265,176	)		(3.5	)%		(6,029,608	)		(5.1	)%		1,764,432			(29.3	)%
Selling and marketing		(13,335,950	)		(10.8	)%		(5,501,475	)		(4.7	)%		(7,834,475	)		142.4	%
General and administrative		(35,381,496	)		(28.6	)%		(32,325,889	)		(27.4	)%		(3,055,607	)		9.5	%
Impairment of goodwill		(496,981	)		(0.4	)%		(642,665	)		(0.5	)%		145,684			(22.7	)%
Impairment of long-lived assets		(942,591	)		(0.8	)%		(2,697,521	)		(2.3	)%		1,754,930			(65.1	)%
TOTAL OPERATING EXPENSE		(54,422,194	)		(44.0	)%		(47,197,158	)		(40.1	)%		(7,225,036	)		15.3	%
LOSS FROM OPERATIONS		(13,052,171	)		(10.6	)%		(27,679,432	)		(23.5	)%		14,627,261			(52.8	)%
OTHER INCOME (EXPENSE):
Interest income		9,984,558			8.1	%		6,427,502			5.5	%		3,557,056			55.3	%
Interest expense		(1,327,341	)		(1.1	)%		(707,488	)		(0.6	)%		(619,853	)		87.6	%
Change in fair value of contingent consideration		1,803,000			1.5	%		4,196,995			3.6	%		(2,393,995	)		(57.0)	%
Government grants		2,017,551			1.6	%		1,639,328			1.4	%		378,223			23.1	%
Other income, net		4,047,074			3.3	%		2,784,561			2.4	%		1,262,513			45.3	%
TOTAL OTHER INCOME , NET		16,524,842			13.4	%		14,340,898			12.2	%		2,183,944			15.2	%
INCOME (LOSS) BEFORE INCOME TAXES		3,472,671			2.8	%		(13,338,534	)		(11.3	)%		16,811,205			(126.0	)%
INCOME TAX (EXPENSE) BENEFIT		(1,802,904	)		(1.5	)%		487,510			0.4	%		(2,290,414	)		(469.8	)%
NET INCOME (LOSS)		1,669,767			1.4	%		(12,851,024	)		(10.9	)%		14,520,791			(113.0	)%

Revenues

For the year ended December 31, 2023, Zhejiang Kandi Technologies, its subsidiaries and SC Autosports had net revenues of $123,599,232 compared to net revenues of $117,813,049 for the year ended December 31, 2022, representing an increase of $5,786,183, or 4.9%. The increase in revenue was mainly due to the increase in the sales volume and increased margin of off-road vehicles and associated parts.

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The following table summarizes our net revenues by product types for the years ended December 31, 2023 and 2022:

	Year Ended December 31
	2023		2022
	Sales		Sales
EV parts	$	5,807,973	$	8,964,094
EV products		1,214,786		7,926,233
Off-road vehicles and associated parts		106,983,891		70,622,278
Electric Scooters, Electric Self-Balancing Scooters and associated parts		683,952		4,616,683
Battery exchange equipment and Battery exchange service		674,927		1,691,486
Lithium-ion cells		7,994,227		23,992,275
Commission income		239,476		-
Total	$	123,599,232	$	117,813,049

EV Parts

During the year ended December 31, 2023, Zhejiang Kandi Technologies, its subsidiaries and SC Autosports’ revenue from the sale of EV parts was $5,807,973, representing a decrease of $3,156,121 or 35.2% from $8,964,094 for the year ended December 31, 2022. The decrease was primarily due to the reduced demand from the market during the year ended December 31, 2023. In addition, due to the large demand of off-road vehicles from the US market, the Company has been focusing on the production of off-road vehicles, especially crossover golf carts, which could bring in better profit margin.

Zhejiang Kandi Technologies, its subsidiaries and SC Autosports’ EV parts business line accounted for approximately 4.7% of the total net revenue for the year ended December 31, 2023.

EV Products

During the year ended December 31, 2023, Zhejiang Kandi Technologies, its subsidiaries and SC Autosports’ revenue from the sale of EV Products was $1,214,786, representing a decrease of $6,711,447 or 84.7% from $7,926,233 for the year ended December 31, 2022. The decrease was primarily due to the reduced demand from the market during the year ended December 31, 2023. In addition, due to the large demand of off-road vehicles from the US market, the Company has been focusing on the production of off-road vehicles, especially crossover golf carts, which could bring in better profit margin.

Zhejiang Kandi Technologies, its subsidiaries and SC Autosports’ EV Products business line accounted for approximately 1.0% of the total net revenue for the year ended December 31, 2023.

Off-Road Vehicles and Associated Parts

During the year ended December 31, 2023, Zhejiang Kandi Technologies, its subsidiaries and SC Autosports’ revenues from the sale of off-road vehicles including go-karts, ATVs, and others, were $106,983,891, representing an increase of $36,361,613 or 51.5% from $70,622,278 for the year ended December 31, 2022. The increase was because of the sales of our new model of crossover golf carts in US market during the year ended December 31, 2023.

Zhejiang Kandi Technologies, its subsidiaries and SC Autosports’ off-road vehicles business line accounted for approximately 86.6% of our total net revenue for the year ended December 31, 2023.

Electric Scooters, Electric Self-Balancing Scooters and Associated Parts

During the year ended December 31, 2023, Zhejiang Kandi Technologies and its subsidiaries’ revenue from the sale of electric scooters and electric self-balancing scooters and associated parts was $683,952, representing a decrease of $3,932,731 or 85.2% from $4,616,683 for the year ended December 31, 2022. The decrease was primarily due to the fact that the Company has been focusing on the production of off-road vehicles, especially crossover golf carts, which could bring in better profit margin due to the demand from the US market.

Zhejiang Kandi Technologies and its subsidiaries’ electric scooters, electric self-balancing scooters and associated parts business line accounted for approximately 0.5% of the total net revenue for the year ended December 31, 2023.

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Battery Exchange Equipment and Battery Exchange Service

During the year ended December 31, 2023, Zhejiang Kandi Technologies and its subsidiaries’ revenue from the sale of battery exchange equipment and battery exchange service was $674,927, representing a decrease of $1,016,559 or 60.1% from $1,691,486 for the same period of 2022.

Zhejiang Kandi Technologies and its subsidiaries’ sale of battery exchange equipment and battery exchange service business line accounted for approximately 0.5% of the total net revenue for the year ended December 31, 2023.

Lithium-ion cells

During the year ended December 31, 2023, Zhejiang Kandi Technologies and its subsidiaries’ revenue from the sale of Lithium-ion cells was $7,994,227, representing a decrease of $15,998,048 or 66.7% from $23,992,275 for the same period of 2022. The decrease was primarily due to less demand from the market.

Zhejiang Kandi Technologies and its subsidiaries’ Lithium-ion cell business line accounted for approximately 6.5% of the total net revenue for the year ended December 31, 2023.

Commission income

During the year ended December 31, 2023, SC Autosports received commission income of $239,476, which was generated by NGI that was acquired on November 30, 2023,  there was no such income for the same period of 2022.

Such commission income accounted for approximately 0.2% of the total net revenue for the year ended December 31, 2023.

The following table shows the breakdown of our net revenues:

	Year Ended December 31
	2023		2022
	Sales Revenue		Sales Revenue
Primary geographical markets
U.S. and other countries/areas	$	93,979,363	$	65,871,112
China		29,619,869		51,941,937
Total	$	123,599,232	$	117,813,049
Major products and Services
EV parts	$	5,807,973	$	8,964,094
EV products		1,214,786		7,926,233
Off-road vehicles and associated parts		106,983,891		70,622,278
Electric Scooters, Electric Self-Balancing Scooters and associated parts		683,952		4,616,683
Battery exchange equipment and Battery exchange service		674,927		1,691,486
Lithium-ion cells		7,994,227		23,992,275
Commission income		239,476		-
Total	$	123,599,232	$	117,813,049
Timing of revenue recognition
Products transferred at a point in time	$	123,359,756	$	117,813,049
Sales transactions completed at a point in time		239,476		-
Total	$	123,599,232	$	117,813,049

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Cost of Goods Sold

Cost of goods sold for the year ended December 31, 2023 was $82,229,209, representing a decrease of $16,066,114, or 16.3%, from $98,295,323 for the year ended December 31, 2022. The decrease was primarily due to the product mix with larger concentration of sales generated from the products with higher gross margin. Please refer to the Gross Profit section below for product margin analysis.

Gross Profit

Our operating entities’ margins by product for the past two years are as set forth below:

	Year Ended December 31
	2023										2022
	Sales		Cost		Gross Profit			Margin %			Sales		Cost		Gross Profit		Margin %
EV parts	$	5,807,973		5,477,843		330,130			5.7	%	$	8,964,094		7,537,781		1,426,313		15.9	%
EV products		1,214,786		1,109,288		105,498			8.7	%		7,926,233		7,372,078		554,155		7.0	%
Off-road vehicles and associated parts		106,983,891		65,574,158		41,409,733			38.7	%		70,622,278		54,471,656		16,150,622		22.9	%
Electric Scooters, Electric Self-Balancing Scooters and associated parts		683,952		696,102		(12,150	)		-1.8	%		4,616,683		4,294,254		322,429		7.0	%
Battery exchange equipment and Battery exchange service		674,927		594,633		80,294			11.9	%		1,691,486		1,728,068		-36,582		-2.2	%
Lithium-ion cells		7,994,227		8,595,058		(600,831	)		-7.5	%		23,992,275		22,891,486		1,100,789		4.6	%
Commission income		239,476		182,127		57,349			23.9	%		-		-		-		-
Total	$	123,599,232		82,229,209		41,370,023			33.5	%	$	117,813,049		98,295,323		19,517,726		16.6	%

Gross profit for the year ended December 31, 2023 was $41,370,023, as compared to $19,517,726 for the year ended December 31, 2022, representing an increase of $21,852,297 or 112.0%. This was primarily attributable to product mix with higher concentration to our off-road vehicles, especially crossover golf carts, that brought us with significantly higher gross margin. Consequently, our gross margin increased to 33.5%, compared to 16.6% for the same period of 2022.

Research and Development

Research and development expenses, including materials, labor, equipment depreciation, design, testing, inspection, and other related expenses totaled $4,265,176 for the year ended December 31, 2023, compared to $6,029,608 for the year ended December 31, 2022, representing a decrease of $1,764,432, or 29.3%. The decrease was mainly due to fewer research and development projects being carried out in the current period.

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Sales and Marketing

Selling and distribution expenses were $13,335,950 for the year ended December 31, 2023, compared to $5,501,475 for the year ended December 31, 2022, representing an increase of $7,834,475, or 142.4% from 2022. The increase was mainly due to higher commission offered for the sales of off-road vehicles, as well as higher shipping and related expenses incurred due to larger volume of exports to the US market.

General and Administrative Expenses

General and administrative expenses were $35,381,496 for the year ended December 31, 2023, compared to $32,325,889 for the year ended December 31, 2022, representing an increase of $3,055,607 or 9.5% from 2022. For the year ended December 31, 2023, general and administrative expenses included $11,059,801 as expenses for common stock awards and stock options to employees and Board members, and for stock issuance to the consultant which the Company recruited pursuant to certain consulting agreement dated May 25, 2023 (“Consultant Agreement”), compared to $1,926,376 for the years ended December 31 2022. Excluding stock compensation expenses, our net general and administrative expenses for the year ended December 31, 2023 were $24,321,695, a decrease of $6,077,818, or 20.0%, compared to $30,399,513 for the year ended December 31, 2022. The decrease compared to 2022 was largely due to decrease of inventory obsolescence reserve.

Interest Income

Interest income was $9,984,558 for the year ended December 31, 2023, compared to $6,427,502 for the year ended December 31, 2022, representing an increase of $3,557,056, or 55.3% from 2022. The increase was primarily attributable to the increased interest earned on increased certificate of deposit and notes receivable compared to the same period in 2022.

Interest Expense

Interest expense was $1,327,341 for the year ended December 31, 2023, compared to $707,488 for the year ended December 31, 2022, representing an increase of $619,853, or 87.6% from 2022. The increase was primarily due to interest expenses related to increased short-term and long-term debt of the Company compared to the same period in 2022.

Change in fair value of contingent consideration

For the year ended December 31, 2023, the gain related to changes in the fair value of contingent consideration was $1,803,000 compared to the gain related to changes in the fair value of contingent consideration of $4,196,995 for the year ended December 31, 2022, which was mainly due to the adjustment of the fair value of the contingent consideration liability associated with remaining shares of restrictive common stock. (Please refer to NOTE 19 – CONTINGENT CONSIDERATION LIABILITY). The fair value of the contingent consideration liability was estimated at each reporting date by using the Monte Carlo simulation method, which took into account all possible scenarios.

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Government Grants

Government grants totaled $2,017,551 for the year ended December 31, 2023, compared to $1,639,328 for the year ended December 31, 2022, representing an increase of $378,223, or 23.1% from 2022, which was largely attributable to the increased grants received from Hainan local government compare to the same period in 2022.

Other Income, Net

Net other income was $4,047,074 for the year ended December 31, 2023, compared to net other income of $2,784,561 for the year ended December 31, 2022, representing an increase of $1,262,513 or 45.3% from 2022, which was largely due to an income generated from the research service project the Company provided to a third party customer during the year ended December 31, 2023.   

Income Taxes

In accordance with the relevant Chinese tax laws and regulations, the applicable corporate income tax rate of our Chinese subsidiaries is 25%. However, four of our subsidiaries, including Zhejiang Kandi Technologies, Kandi Smart Battery Swap, Kandi Hainan and Jiangxi Huiyi are qualified as high technology companies in China and are therefore entitled to a reduced corporate income tax rate of 15%. Additionally, Hainan Kandi Holding also has an income tax rate of 15% due to its local preferred tax rate in Hainan Free Trade Port. 

Each of our other subsidiaries, Kandi New Energy, Yongkang Scrou, China Battery Exchange and its subsidiaries has an applicable corporate income tax rate of 25%.

Our actual effective income tax rate for 2023 was a tax expense of 51.92% on a reported income before taxes of approximately $3.5 million, compared to a tax benefit of 3.65% on a reported loss before taxes of approximately $13.3 million for 2022.

Net Income (Loss)

We recorded net income of $1,669,767 for the year ended December 31, 2023, compared to net loss of $12,851,024 for the year ended December 31, 2022. The increase of net income was primarily attributable to the increase in gross profit resulted from a higher concentration of sales from off-road vehicles with larger gross margin.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flow

	Years Ended
	December 31, 2023			December 31, 2022
Net cash (used in) provided by operating activities	$	(101,160,636	)	$	31,478,911
Net cash provided by (used in) investing activities	$	32,278,828		$	(35,031,115	)
Net cash provided by (used in) financing activities	$	14,828,688		$	(4,333,088	)
NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	$	(54,053,120	)	$	(7,885,292	)
Effect of exchange rate changes	$	(3,357,083	)	$	(9,750,444	)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR	$	151,040,271		$	168,676,007
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	93,630,068		$	151,040,271

47

For the year ended December 31, 2023, net cash used in operating activities was $101,160,636, as compared to cash provided by operating activities was $31,478,911 for the year ended December 31, 2022. Our operating cash inflows include cash received primarily from sales of our EV parts, off-road vehicles, electric Scooters, electric self-balancing scooters and associated parts and lithium-ion cells. These cash inflows are offset largely by cash paid primarily to our suppliers for production materials and parts used in our manufacturing process, operation expenses, employee compensation, and interest expenses of our financings. The major operating activities that provided cash for the year ended December 31, 2023 were an increase of accounts payable of $38,603,301. The major operating activity that used cash for year ended December 31, 2023 was an increase of notes receivable of $123,992,862.

For the year ended December 31, 2023, net cash provided by investing activities was $32,278,828, as compared to cash used in investing activities of $35,031,115 for the year ended December 31, 2022. The major investing activities that provided cash for the year ended December 31, 2023 were a decrease of certificate of deposit of $45,244,390. The major investing activities that used cash for the year ended December 31, 2023 were an increase of purchases of property, plant and equipment of $13,172,512.

For the year ended December 31, 2023, net cash provided by financing activities was $14,828,688, as compared to cash used in financing activities of $4,333,088 for the year ended December 31, 2022. The major financing activities that provided cash for the year ended December 31, 2023 were proceeds from short-term bank loans of $23,420,534. The major financing activities that used cash for year ended December 31, 2023 were repayments of short-term loans of $19,709,663.

Working Capital

We had working capital of $266,874,509 as of December 31, 2023, which reflects an increase of $19,057,384 from a working capital of $247,817,125 as of December 31, 2022.

Contractual Obligations and Off-balance Sheet Arrangements

Guarantees and pledged collateral for third party bank loans

For the discussion of guarantees for bank loans, please refer to Note 23 - COMMITMENTS AND CONTINGENCIES under Item 8 Notes to Consolidated Financial Statements.

Critical Accounting Policies and Related Estimates That Could Have a Material Effect on Our Consolidated Financial Statements

This section should be read together with the Summary of Significant Accounting Policies in the attached consolidated financial statements included in this Annual Report.

48

Estimates affecting accounts receivable and inventories

The preparation of our consolidated financial statements requires management to make estimates and assumptions that affect our reporting of assets and liabilities (and contingent assets and liabilities). These estimates are particularly significant where they affect the reported net realizable value of our accounts receivable and inventories.

Accounts receivable are recognized and carried at net realizable value. An allowance for doubtful accounts is recorded for periods in which the Company determines a loss is probable, based on its assessment of specific factors, such as troubled collections, historical experience, accounts aging, ongoing business relations and other factors. Accounts are written off after exhaustive collection efforts. If accounts receivable are to be provided for, or written off, they are recognized in the consolidated statement of operations within the operating expenses line item. If accounts receivable previously written off is recovered in a later period or when facts subsequently become available to indicate that the amount provided as an allowance for doubtful accounts was incorrect, an adjustment is made to restate allowance for doubtful accounts.

As of December 31, 2023 and December 31, 2022, credit terms with the Company’s customers were typically 60 to 180 days after delivery. As of December 31, 2023 and 2022, the Company had a $2,886,223 and $2,285,386 allowance for doubtful accounts, as per the Company management’s judgment based on their best knowledge. The Company conducts quarterly assessments of the state of the Company’s outstanding receivables and reserves any allowance for doubtful accounts if it becomes necessary.

Inventories are stated at the lower of cost or net realizable value (market value). The cost of raw materials is determined on the basis of weighted average. The cost of finished goods is determined on the basis of weighted average and comprises direct materials, direct labor and an appropriate proportion of overhead. Net realizable value is based on estimated selling prices less selling expenses and any further costs expected to be incurred for completion. Adjustments to reduce the cost of inventory to net realizable value are made, if required, for estimated excess, obsolescence, or impaired balances.

Although we believe that there is little likelihood that actual results will differ materially from our current estimates, if customer demands for our products decreases significantly in the near future, or if the financial condition of our customers deteriorates in the near future, we could realize significant write downs for slow-moving inventories or uncollectible accounts receivable.

Policy affecting recognition of revenue

Our revenue recognition policy plays a key role in our consolidated financial statements.

The Company adopted ASC Topic 606 Revenue from Contracts with Customers with a date of the initial application of January 1, 2018 using the modified retrospective method. The impact of the adoption of ASC Topic 606 on the Company’s consolidated financial statements is not material.

The Company recognizes revenue when goods or services are transferred to customers in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contract with customer; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

The Company generates revenue through the sales of EV parts and off-road vehicles, as well as commission income. The revenue is recognized at a point in time once the Company has determined that the customer has obtained control over the product, or the control of the promised services. Control is typically deemed to have been transferred to the customer when the performance obligation is fulfilled, usually at the time of delivery, at the net sales price (transaction price). Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. Shipping and handling costs for product shipments occur prior to the customer obtaining control of the goods are accounted for as fulfillment costs rather than separate performance obligations and recorded as sales and marketing expenses.

49

Estimate affecting impairment of long-lived assets

The Company periodically evaluates the carrying value of long-lived assets to be held and used, including intangible assets subject to amortization, when events and circumstances warrant such a review, pursuant to the guidelines established in Statement of Financial Accounting Standards (“SFAS”) No. 144 (now known as “ASC 360”). The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair market values are reduced for disposal costs.

The Company recognized impairment loss of $942,591 and $2,697,521 for finite-lived intangible assets as of December 31, 2023 and December 31, 2022, respectively.

Estimate affecting impairment of goodwill

The Company allocates goodwill from business combinations to reporting units based on the expectation that the reporting unit is to benefit from the business combination. The Company evaluates its reporting units on an annual basis and, if necessary, reassigns goodwill using a relative fair value allocation approach. Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit.

Application of the goodwill impairment test requires judgments, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and the determination of the fair value of each reporting unit. The Company first assesses qualitative factors to determine whether it is more likely than not that goodwill is impaired. If the more likely than not threshold is met, the Company performs a quantitative impairment test.

The Company applies the reporting unit criteria in ASC 350-20 to the components to determine if the reporting unit should be identified one level below the operating segment. Each component will be evaluated to determine if: (a) it is a business (as defined in ASC 805), (b) discrete financial information is available and (c) the operating results are regularly reviewed by the segment manager(s). If the components of a specific operating segment meet these criteria, they might be deemed to be separate reporting units. However, if they have similar economic characteristics (which is a matter of judgment based on individual facts and circumstances), these components must be aggregated into one reporting unit. There are three reporting units under the goodwill impairment analysis, namely 1) SC Autosports, 2) Jinhua An Kao and Yongkang Scrou, and 3) Jiangxi Huiyi.

As of December 31, 2023 and 2022, the Company performed goodwill impairment testing at the reporting unit level and recognized impairment loss of $496,981 and $642,665, respectively.

Estimate affecting contingent consideration liability

The Company recorded contingent consideration liability of the estimated fair value of the contingent consideration the Company currently expects to pay to the Jiangxi Huiyi and NGI’s former members upon the achievement of certain milestones. The fair value of the contingent consideration liability associated with remaining shares of restrictive common stock was estimated by using the Monte Carlo simulation method, which took into account all possible scenarios. This fair value measurement is classified as Level 3 within the fair value hierarchy prescribed by ASC Topic 820, Fair Value Measurement and Disclosures. In accordance with ASC Topic 805, Business Combinations, the Company will re-measure this liability each reporting period and record changes in the fair value through a separate line item within the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss).

50

As of December 31, 2023 and December 31, 2022, the Company’s contingent consideration liability was $2,693,000 and $1,803,000, respectively.

Policy affecting options, warrants and convertible notes

Our stock option cost is recorded in accordance with ASC 718 and ASC 505. The fair value of stock options is estimated using the Binomial Tree Model. Our expected volatility assumption is based on the historical volatility of our stock. The expected life assumption is primarily based on the expiration date of the option. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Stock option expense recognition is based on awards expected to vest. There were no estimated forfeitures. ASC standards require forfeitures to be estimated at the time of grant and revised in subsequent periods, if necessary, if actual forfeitures differ from those estimates.

The stock-based option expenses for the years ended December 31, 2023 and 2022 were $3,476,058 and $1,231,566, respectively. There were no forfeitures estimated during the reporting period.

Our warrant costs are recorded in liabilities and equities, respectively, in accordance with ASC 480, ASC 505 and ASC 815. The fair value of a warrant, which is classified as a liability, is estimated using the Binomial Tree model and the lattice valuation model. Our expected volatility assumption is based on the historical volatility of our common stock. The expected life assumption is primarily based on the expiration date of the warrant. The risk-free interest rate for the expected term of the warrant is based on the U.S. Treasury yield curve in effect at the time of measurement. Our warrants, which are freestanding derivatives classified as liabilities on the balance sheet, are measured at fair value on each reporting date, with decreases in fair value recognized in earnings and increases in fair values recognized in expenses.

The fair value of equity-based warrants, which is not considered derivatives under ASC 815, is estimated using the Binomial Tree model. Our expected volatility assumption is based on the historical volatility of our common stock. The expected life assumption is primarily based on the expiration date of the warrant. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

In accordance with ASC 815, the conversion feature of the convertible notes is separated from the debt instrument and accounted for separately as a derivative instrument. On the date the convertible notes are issued, the conversion feature is recorded as a liability at its fair value, and future decreases in fair value are recognized in earnings while increases in fair values are recognized in expenses. We used the Binomial Tree option-pricing model to obtain the fair value of the conversion feature. The expected volatility assumption is based on the historical volatility of our common stock. The expected life assumption is primarily based on the expiration date of the conversion features. The risk-free interest rate for the expected term of the conversion features is based on the U.S. Treasury yield curve in effect at the time of measurement.

U.S. Corporate Income Tax

Based on Financial Accounting Standards Board (“FASB”) staff Q&A Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income (GILTI), the FASB staff noted that the Company must make an accounting policy election to either (1) recognize taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the “period cost method”) or (2) factor such amount into the Company’s measure of its deferred taxes (the “deferred method”). The Company elected to treat GILTI as a current-period expense when incurred.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

This item is not applicable to us.

51

Item 8. Financial Statements and Supplementary Data.

KANDI TECHNOLOGIES GROUP, INC.

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED

DECEMBER 31, 2023 AND 2022

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

CONTENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - ARK Pro CPA & Co	F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM – Kreit & Chiu CPA LLP	F-6
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2023 AND 2022	F-9
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022	F-10
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022	F-11
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022	F-12
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022	F-13

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To: Board of Directors and Shareholders

Kandi Technologies Group, Inc.

Opinions on the Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Kandi Technologies Group, Inc. (the “Company”) as of December 31, 2023, and the related consolidated statements of operations and comprehensive income, changes in stockholders’ equity, and cash flows for the year ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework (2013) issued by COSO.

Basis for Opinion

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

F-2

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that responds to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Valuation of Goodwill and Intangible Assets

Critical Audit Matter Description

As of December 31, 2023, the Company had $33,146,682 of Goodwill and $6,395,825 of Intangible Assets. As discussed in Notes 5 and 6, management assesses Goodwill and Intangible Assets for impairment. Estimating fair values in connection with these impairment evaluations involves the use of forecasted revenues, expenses, and capital expenditures. The Company identified impairment of Goodwill of $496,981 and Intangible Assets impairment of $942,591, both related to Jiangxi Province Huiyi New Energy Co., Ltd (“Jiangxi Huiyi”), a subsidiary of the Company.

F-3

How the Critical Audit Matter was Addressed in the Audit

Our procedures related to the impairment of Goodwill and Intangible Assets at Jiangxi Huiyi include the following: (1) Tested the effectiveness of internal controls over the impairment analysis including the internal controls over the development of assumptions used in the valuation of Goodwill and Intangible Assets. (2) Tested management’s process of evaluating the appropriateness of the valuation models used to value the Goodwill and Intangible Assets. (3) Assessed qualitative factors relevant to the Company in order to determine if contradictory evidence exists.

Valuation of inventory

Critical Audit Matter Description

The Company values inventory using the lower of  cost or net realizable value. Net realizable value is generally based on the selling price expectations of the merchandise. The Company regularly reviews inventory to determine if the carrying value of the inventory exceeds net realizable value and when determined necessary, records a reserve to reduce the carrying value to net realizable value. As of December 31, 2023, the Company’s inventories amounted to $61,551,268, net of reserves for slow-moving or potential obsolescence of $8,544,926.

We identified the inventory valuation as a critical audit matter because of the extent of audit judgment and effort required to evaluate management’s estimates.

How the Critical Audit Matter was Addressed in the Audit

Our procedures related to the inventory valuation include the following: (1) Tested the effectiveness of internal controls over management’s inventory valuation method, including those over management’s development and approval of product cycles (2) Evaluated the appropriateness of management’s methods used in developing their estimate of the inventory valuation. (3) Evaluated the appropriateness of inputs supporting management’s estimate of inventory cost. We also agreed the data back to source information including third party vendor invoices (4) Evaluated management’s calculation of the inventory cost by testing the mathematical accuracy.

F-4

Valuation of Contingent Consideration Liability

Critical Audit Matter Description

As stated in Note 25, the Company completed to acquire 100% of the equity interest of Northern Group Inc. (“NGI”) in November 2023. The Company had issued a total of 3,951,368 restricted shares and had the contingent obligation to release such escrow restriction upon the achievement of certain agreed-upon milestones over the agreed escrow period, to be released at three milestone dates. The contingent consideration liability was valued at $2,693,000 as of December 31, 2023.

Key inputs to the valuation of the contingent consideration liability include estimates of future revenue and expenses of NGI and estimates of the future stock price of the Company. The valuation of the contingent consideration liability is established by external valuation specialists using the inputs noted above and valuation methods followed in the valuation industry. While the Company used best estimates and engaged an external valuation specialist, the Company’s estimates are inherently uncertain and include significant judgment.

How the Critical Audit Matter was Addressed in the Audit

Our procedures related to the valuation of the contingent consideration liability related to the NGI acquisition include the following: (1) Tested the effectiveness of internal controls over the valuation of contingent consideration liability including the internal controls over the development of assumptions used in the valuation of the contingent consideration liability. (2) Tested management’s process of evaluating the appropriateness of the valuation models used to value the contingent consideration liability. (3) Used an independent valuation specialist to test valuation assumptions and methodology. (4) Assessed qualitative factors relevant to the Company in order to determine if contradictory evidence exists.

/s/ ARK Pro CPA & Co

ARK Pro CPA & Co

(Formerly HKCM CPA & Co.)

We have served as the Company’s auditor since 2023.

Hong Kong, China

March 14, 2024

PCAOB Firm ID: 3299

F-5

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Kandi Technologies Group, Inc.

Opinions on the Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Kandi Technologies Group, Inc. as of December 31, 2022, and the related consolidated statements of operations and comprehensive income, changes in stockholders’ equity, and cash flows for the year ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”). We also have audited Kandi Technologies Group, Inc.’s internal control over financial reporting as of December 31, 2022, based on criteria established in 2013 Internal Control—Integrated Framework issued by the “Committee of Sponsoring Organizations of the Treadway Commission”.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Kandi Technologies Group, Inc. as of December 31, 2022, and the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, Kandi Technologies Group, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Basis for Opinion

Kandi Technologies Group, Inc.’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the entity’s financial statements and an opinion on the entity’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to Kandi Technologies Group, Inc. in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that responds to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

An entity’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. An entity’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the entity; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the entity are being made only in accordance with authorizations of management and directors of the entity; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the entity’s assets that could have a material effect on the financial statements.

F-6

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Valuation of Goodwill and Intangible Assets

Critical Audit Matter Description

As of December 31, 2022, the Company had $33,178,229 of Goodwill and $7,994,112 of Intangible Assets. As discussed in Notes 5 and 6, management assesses Goodwill and Intangible Assets for impairment. Estimating fair values in connection with these impairment evaluations involves the use of forecasted revenues, expenses, and capital expenditures. While the Company did engage an external valuation specialist, the valuation process is still highly subjective.

Through this impairment assessment the Company identified impairment of Goodwill of $642,665 and Intangible Assets impairment of $2,697,521, both related to the Jiangxi Huiyi subsidiary.

How the Critical Audit Matter was Addressed in the Audit

Our procedures related to the impairment of Goodwill and Intangible Assets at Jiangxi Huiyi include the following: (1) Tested the effectiveness of internal controls over the impairment analysis including the internal controls over the development of assumptions used in the valuation of Goodwill and Intangible Assets. (2) Tested management’s process of evaluating the appropriateness of the valuation models used to value the Goodwill and Intangible Assets. (3) Used an independent valuation specialist to test valuation assumptions and methodology. (4) Assessed qualitative factors relevant to the Company in order to determine if contradictory evidence exists.

Valuation of Contingent Consideration Liability

Critical Audit Matter Description

As stated in Note 18, the Company acquired 100% of the equity of Jiangxi Huiyi in October 2021. In addition to cash, the Company had the contingent obligation to pay up to 2,576,310 shares of its common stock over the following three-year period, payable at three milestone dates. The contingent consideration liability was valued at $1,803,000 as of December 31, 2022.

Key inputs to the valuation of the contingent consideration liability include estimates of future revenue and expenses of Jiangxi Huiyi and estimates of the future stock price of the Company. The valuation of the contingent consideration liability is established by external valuation specialists using the inputs noted above and valuation methods followed in the valuation industry. While the Company used best estimates and engaged an external valuation specialist, the Company’s estimates are inherently uncertain and include significant judgment.

F-7

How the Critical Audit Matter was Addressed in the Audit

Our procedures related to the valuation of the contingent consideration liability related to the Jiangxi Huiyi acquisition include the following: (1) We tested the effectiveness of internal controls over the valuation of contingent consideration liability including the internal controls over the development of assumptions used in the valuation of the contingent consideration liability. (2) Tested management’s process of evaluating the appropriateness of the valuation models used to value the contingent consideration liability. (3) Used an independent valuation specialist to test valuation assumptions and methodology. (4) Assessed qualitative factors relevant to the Company in order to determine if contradictory evidence exists.

/s/ Kreit & Chiu CPA LLP

(Formerly Paris, Kreit & Chiu CPA LLP)

We have served as Kandi Technologies Group, Inc.’s auditor since 2021. In 2023, we became the predecessor auditor.

Los Angeles, California

March 16, 2023

PCAOB Firm ID: 6651

F-8

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31, 2023			December 31, 2022
CURRENT ASSETS
Cash and cash equivalents	$	33,756,941		$	84,063,717
Restricted cash		59,873,127			66,976,554
Certificate of deposit		33,947,212			81,191,191
Accounts receivable (net of allowance for doubtful accounts of $2,886,223 and $2,285,386 as of December 31, 2023 and December 31, 2022, respectively)		18,951,745			38,150,876
Inventories		61,551,268			40,475,366
Notes receivable		124,473,111			434,461
Other receivables		6,476,542			11,912,615
Prepayments and prepaid expense		1,909,094			2,970,261
Advances to suppliers		2,609,098			3,147,932
TOTAL CURRENT ASSETS		343,548,138			329,322,973
NON-CURRENT ASSETS
Property, plant and equipment, net		98,803,772			97,168,753
Intangible assets, net		6,395,825			7,994,112
Land use rights, net		2,754,442			2,909,950
Construction in progress		-			199,837
Deferred tax assets		814,610			1,432,527
Long-term investment		-			144,984
Goodwill		33,146,682			33,178,229
Other long-term assets		9,993,130			10,630,911
TOTAL NON-CURRENT ASSETS		151,908,461			153,659,303
TOTAL ASSETS	$	495,456,599		$	482,982,276
CURRENT LIABILITIES
Accounts payable	$	28,744,854		$	35,321,262
Other payables and accrued expenses		7,252,814			14,131,414
Short-term loans		9,072,336			5,569,154
Notes payable		24,071,461			19,123,476
Income tax payable		2,130,083			1,270,617
Other current liabilities		5,402,081			6,089,925
TOTAL CURRENT LIABILITIES		76,673,629			81,505,848
NON-CURRENT LIABILITIES
Long-term loans		8,389,163			-
Deferred taxes liability		963,691			1,378,372
Contingent consideration liability		2,693,000			1,803,000
Other long-term liabilities		227,024			602,085
TOTAL NON-CURRENT LIABILITIES		12,272,878			3,783,457
TOTAL LIABILITIES		88,946,507			85,289,305
STOCKHOLDER’S EQUITY
Common stock, $0.001 par value; 100,000,000 shares authorized; 87,532,800 and 77,668,730 shares issued and 87,348,234 and 74,180,171 outstanding at December 31,2023 and December 31,2022, respectively		87,533			77,669
Less: Treasury stock (184,566 shares with average price of $2.75 and 3,488,559 shares with average price of $2.81 at December 31, 2023 and December 31, 2022, respectively)		(507,013	)		(9,807,820	)
Additional paid-in capital		457,847,155			451,373,645
Accumulated deficit (the restricted portion is $4,422,033 and $4,422,033 at December 31, 2023 and December 31, 2022, respectively)		(16,332,633	)		(16,339,765	)
Accumulated other comprehensive loss		(36,970,066	)		(28,333,239	)
TOTAL KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS’ EQUITY		404,124,976			396,970,490
Non-controlling interests		2,385,116			722,481
TOTAL STOCKHOLDERS’ EQUITY		406,510,092			397,692,971
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	495,456,599		$	482,982,276

See notes to consolidated financial statements.

F-9

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME (LOSS)

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

	Years Ended
	December 31, 2023			December 31, 2022
REVENUES, NET	$	123,599,232		$	117,813,049
COST OF GOODS SOLD		(82,229,209	)		(98,295,323	)
GROSS PROFIT		41,370,023			19,517,726
OPERATING EXPENSE:
Research and development		(4,265,176	)		(6,029,608	)
Selling and marketing		(13,335,950	)		(5,501,475	)
General and administrative		(35,381,496	)		(32,325,889	)
Impairment of goodwill		(496,981	)		(642,665	)
Impairment of long-lived assets		(942,591	)		(2,697,521	)
TOTAL OPERATING EXPENSE		(54,422,194	)		(47,197,158	)
LOSS FROM OPERATIONS		(13,052,171	)		(27,679,432	)
OTHER INCOME (EXPENSE):
Interest income		9,984,558			6,427,502
Interest expense		(1,327,341	)		(707,488	)
Change in fair value of contingent consideration		1,803,000			4,196,995
Government grants		2,017,551			1,639,328
Other income, net		4,047,074			2,784,561
TOTAL OTHER INCOME , NET		16,524,842			14,340,898
INCOME (LOSS) BEFORE INCOME TAXES		3,472,671			(13,338,534	)
INCOME TAX (EXPENSE) BENEFIT		(1,802,904	)		487,510
NET INCOME (LOSS)		1,669,767			(12,851,024	)
LESS: NET INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTERESTS		1,662,635			(727,361	)
NET INCOME (LOSS) ATTRIBUTABLE TO KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS		7,132			(12,123,663	)
OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustment		(8,636,827	)		(28,585,025	)
COMPREHENSIVE LOSS	$	(6,967,060	)	$	(41,436,049	)
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC		78,781,094			75,571,702
WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED		79,902,891			75,571,702
NET INCOME (LOSS) PER SHARE, BASIC	$	0.02		$	(0.17	)
NET INCOME (LOSS) PER SHARE, DILUTED	$	0.02		$	(0.17	)

See notes to consolidated financial statements.

F-10

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

	Number of Outstanding Shares			Common Stock			Treasury Stock			Additional Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss）			Non- controlling interests			Total
BALANCE AS OF DECEMBER 31, 2021		77,385,130		$	77,385		$	(2,392,203	)	$	449,479,461		$	(4,216,102	)	$	251,786		$	-		$	443,200,327
Stock issuance and award		283,600			284			-			746,636			-			-			-			746,920
Stock based compensation		-			-			-			1,231,566			-			-			-			1,231,566
Stock buyback		-			-			(7,415,617	)		(84,018	)		-			-			-			(7,499,635	)
Capital contribution from shareholder		-			-			-			-			-			-			1,449,842			1,449,842
Net loss		-			-			-			-			(12,123,663	)		-			(727,361	)		(12,851,024	)
Foreign currency translation		-			-			-			-			-			(28,585,025	)		-			(28,585,025	)
BALANCE AS OF DECEMBER 31, 2022		77,668,730		$	77,669		$	(9,807,820	)	$	451,373,645		$	(16,339,765	)	$	(28,333,239	)	$	722,481		$	397,692,971
Stock issuance and award		11,685,968			11,686			-			9,357,192			-			-			-			9,368,878
Stock based compensation		-			-			-			3,476,058			-			-			-			3,476,058
Stock buyback		-			-			(507,013	)		(3,731	)		-			-			-			(510,744	)
Cancellation of the Treasury Stock		(3,488,559	)		(3,489	)		9,807,820			(9,804,331	)		-			-			-			-
Stock option exercise		1,666,661			1,667			-			3,448,322			-			-			-			3,449,989
Net income		-			-			-			-			7,132			-			1,662,635			1,669,767
Foreign currency translation		-			-			-			-			-			(8,636,827	)		-			(8,636,827	)
BALANCE AS OF DECEMBER 31, 2023		87,532,800		$	87,533		$	(507,013	)	$	457,847,155		$	(16,332,633	)	$	(36,970,066	)	$	2,385,116		$	406,510,092

See notes to consolidated financial statements.

F-11

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

	Years Ended
	December 31, 2023			December 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	1,669,767		$	(12,851,024	)
Adjustments to reconcile net (loss) income to net cash provided by operating activities
Depreciation and amortization		11,913,647			12,427,973
Impairments		1,439,573			3,340,186
Provision of allowance for doubtful accounts		656,330			(542,801	)
Deferred taxes		203,236			(461,045	)
Loss from long-term Investment		141,389			-
Change in fair value of contingent consideration		(1,803,000	)		(4,196,995	)
Stock award and stock based compensation expense		11,059,801			1,926,376
Changes in operating assets and liabilities:
Accounts receivable		10,560,521			(20,965,140	)
Notes receivable		(123,992,862	)		4,726,570
Inventories		(21,531,323	)		(9,145,298	)
Other receivables and other assets		5,165,337			(4,932,463	)
Advances to supplier and prepayments and prepaid expenses		1,491,762			16,275,678
Increase (Decrease) In:
Accounts payable		38,603,301			62,592,477
Other payables and accrued liabilities		(5,062,494	)		7,842,715
Notes payable		(32,629,627	)		(24,533,127	)
Income tax payable		954,006			(25,171	)
Net cash (used in) provided by operating activities	$	(101,160,636	)	$	31,478,911
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment, net		(13,172,512	)		(3,690,235	)
Payment for construction in progress		(75,185	)		(129,894	)
Certificate of deposit		45,244,390			(31,210,986	)
Acquisition of NGI		282,135			-
Net cash provided by (used in) investing activities	$	32,278,828		$	(35,031,115	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term loans		23,420,534			30,765,776
Repayments of short-term loans		(19,709,663	)		(28,357,211	)
Repayments of long-term loans		(46,426	)		-
Proceeds from long-term loans		8,225,000			-
Contribution from non-controlling shareholder		-			757,981
Purchase of treasury stock		(510,745	)		(7,499,634	)
Proceeds from exercises stock options, stock awards and other financing		3,449,988			-
Net cash provided by (used in) financing activities	$	14,828,688		$	(4,333,088	)
NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	$	(54,053,120	)	$	(7,885,292	)
Effect of exchange rate changes	$	(3,357,083	)	$	(9,750,444	)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR	$	151,040,271		$	168,676,007
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	93,630,068		$	151,040,271
-CASH AND CASH EQUIVALENTS AT END OF PERIOD		33,756,941			84,063,717
-RESTRICTED CASH AT END OF PERIOD		59,873,127			66,976,554
SUPPLEMENTARY CASH FLOW INFORMATION
Income taxes paid	$	311,504		$	350,002
Interest paid	$	965,025		$	345,451
SUPPLEMENTAL NON-CASH DISCLOSURES:
Contribution from non-controlling shareholder by inventories, fixed assets and intangible assets	$	-		$	393,986
Common stock issued for settlement of payables related to acquisitions (see Note 19)	$	1,812,005		$	-

See notes to consolidated financial statements.

F-12

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND PRINCIPAL ACTIVITIES

Kandi Technologies Group, Inc. (“Kandi Technologies”) was incorporated under the laws of the State of Delaware on March 31, 2004. As used herein, the terms “Company” or “Kandi” refer to Kandi Technologies and its operating subsidiaries, as described below.

Headquartered in Jinhua City, Zhejiang Province, People’s Republic of China (“China” or “PRC”), the Company is one of China’s leading producers and manufacturers of electric vehicle (“EV”) products, EV parts, and off-road vehicles for sale in the Chinese and the global markets. The Company conducts its primary business operations through its wholly-owned subsidiaries, Zhejiang Kandi Vehicles Co., Ltd. (“Kandi Vehicles”), Kandi Vehicles’ wholly and partially-owned subsidiaries, and SC Autosports, LLC (“SC Autosports”, d/b/a Kandi America) and its wholly-owned subsidiary, Kandi America Investment, LLC (“Kandi Investment”). In March 2021, Zhejiang Kandi Vehicles Co., Ltd. changed its name to Zhejiang Kandi Technologies Group Co., Ltd. (“Zhejiang Kandi Technologies”).

The Company’s organizational chart as of the date of this report is as follows:

 

F-13

Operating Subsidiaries

Pursuant to certain VIE   agreements signed by Zhejiang Kandi Technologies and Mr. Hu Xiaoming, from January 2011 to March 13, 2022, Zhejiang Kandi Technologies is entitled to 100% of the economic benefits, voting rights and residual interests (100% of profits and losses) of Jinhua Kandi New Energy Vehicles Co., Ltd. (“Kandi New Energy”). Specifically, on May 18, 2010, Zhejiang Kandi Technologies signed the Agreement of Establishment of Kandi New Energy with Mr. Hu Xiaoming, pursuant to which both parties agreed to together contribute RMB 36 Million to establish Kandi New Energy, and each party will contribute 50% of the total investment. Zhejiang Kandi Technologies will make its contribution in kind equivalent to its portion and Mr. Hu will make his contribution in cash. On the same date, Zhejiang Kandi Technologies signed a Contractor’s Agreement with Mr. Hu Xiaoming pursuant to which both parties agreed that during the existence of Kandi New Energy, it is contracted to Zhejiang Kandi Technologies for operation and management and Mr. Hu Xiaoming will not participate in any management, dividend distribution or loss of Kandi New Energy. On the same day, Zhejiang Kandi Technologies also signed a Share Escrow and Trust Agreement with Mr. Hu Xiaoming, pursuant to which upon the existence of Kandi New Energy,  Mr. Hu Xiaoming agreed to entrust his entire 50% equity in the Kandi New Energy with Zhejiang Kandi Technologies, and Zhejiang Kandi Technologies agrees to accept such trust. All the above-mentioned agreements shall only be effective within 30 days upon the Kandi New Energy receives government’s approval and reaches to the practical operation stage. Therefore, all the three agreements became effective on January 2011. All these three agreements were previously attached as Exhibit 10.13, Exhibit 10.14, and Exhibit 10.15 to the Company’s Annual Report on Form 10-K filed on March 31, 2011 and are incorporated herein by reference. Effective March 14, 2022, Mr. Hu Xiaoming transferred his 50% equity interests of Kandi New Energy to Zhejiang Kandi Technologies. As a result, Kandi New Energy has become a wholly-owned subsidiary of Zhejiang Kandi Technologies.

In April 2012, pursuant to an agreement with the shareholders of Yongkang Scrou Electric Co, Ltd. (“Yongkang Scrou”), the Company acquired 100% of Yongkang Scrou, a manufacturer of automobile and EV parts. In September 2020, Zhejiang Kandi Technologies transferred all of its equity interest in Yongkang Scrou to its wholly owned subsidiary, Zhejiang Kandi Smart Battery Swap Technology Co., Ltd. (“Kandi Smart Battery Swap”).

On February 18, 2021, Zhejiang Kandi Technologies signed an Equity Transfer Agreement with Geely to transfer the remaining 22% equity interests of the Fengsheng Automotive Technology Group Co., Ltd. to Geely. As of September 10, 2021, the Company received all the equity transfer payment.

In April 2013, Zhejiang Kandi Technologies and Kandi New Energy formed Kandi Electric Vehicles (Wanning) Co., Ltd., which was renamed Kandi Electric Vehicles (Hainan) Co., Ltd. (“Kandi Hainan”), when it was relocated from Wanning City to Haikou City in January 2016. Zhejiang Kandi Technologies has 45% ownership interest in Kandi Hainan, and Kandi New Energy has the remaining 55% ownership interest.

In December 2017, Zhejiang Kandi Technologies and the sole shareholder of Jinhua An Kao Power Technology Co., Ltd. (“Jinhua An Kao”) entered into a Share Transfer Agreement and a Supplementary Agreement, pursuant to which Zhejiang Kandi Technologies acquired 100% equity of Jinhua An Kao. In June 2020, Jinhua An Kao changed its name to Kandi Smart Battery Swap.

On May 31, 2018, the Company entered into a Membership Interests Transfer Agreement (the “Transfer Agreement”) with the two members of SC Autosports LLC (“SC Autosports”) (formerly known as: Sportsman Country, LLC) pursuant to which the Company acquired 100% of the ownership of SC Autosports.

F-14

On March 4, 2019, in order to build a logistics network composed of suppliers, manufacturers, warehouses, distribution centers and channel providers, meeting the needs of improving production and operation efficiency, the Company participated in the formation of Zhejiang Kandi Supply Chain Management Co., Ltd. (“Supply Chain Company”). Zhejiang Kandi Technologies has 10% ownership interest in Supply Chain Company, the remaining 90% is owned by unrelated other parties. As of the date of this report, Zhejiang Kandi Technologies has not made any capital contribution to Supply Chain Company since the contribution is not yet due as the relevant per PRC regulations, and is not involved in its operations. The Company deemed that Supply Chain Company is not a related party with the analysis in accordance with ASC 850-10.

In September 2020, in order to make full use of its dozens of patents in the field of battery swap systems and attract strategic investors to participate across the whole sector value chain, including battery swapping services and used battery recycling, the Company formed China Battery Exchange (Zhejiang) Technology Co., Ltd. (“China Battery Exchange”) and its subsidiaries. Zhejiang Kandi Technologies has 100% ownership interest in China Battery Exchange and its subsidiaries.

In September 2020, intending to explore ridesharing service business, the Company participated in the formation of Zhejiang Ruiheng Technology Co., Ltd (“Ruiheng”). Zhejiang Kandi Technologies has 10% ownership interest in Ruiheng, the remaining 90% is owned by unrelated other parties. The Company deemed that Ruiheng is not a related party with the analysis in accordance with ASC 850-10. Ruiheng was dissolved in November 2023; however, its subsidiary Hainan Ruigeng still operates under different group of shareholders and managements.

During January 2021, SC Autosports established a wholly owned subsidiary, Kandi America Investment, LLC (“Kandi Investment”) in Dallas.

On July 13, 2021, Zhejiang Kandi Technologies entered into a Share Transfer Agreement and Supplementary Agreement with three individual shareholders of Jiangxi Province Huiyi New Energy Co., Ltd. (“Jiangxi Huiyi”) to acquire 100% equity of Jiangxi Huiyi. The acquisition was consummated at October 31, 2021.

On February 15, 2022, Kandi Hainan and Jiangsu Xingchi Signed a joint venture agreement, the two parties jointly invested RMB 30,000,000 (approximately $4.6 million) in Haikou, Hainan (of which Kandi Hainan owns 66.7% and Jiangsu Xingchi owns 33.3%) to establish Hainan Kandi Holding New Energy Technology Co., Ltd. (“Hainan Kandi Holding”).

On June 17, 2023, SC Autosports entered into an equity transfer agreement with the owner of Northern Group, Inc. (“NGI”) to acquire 100% equity of NGI, and on March 12, 2024, the parties entered into a supplementary agreement to revise certain profit targets. The acquisition was consummated on November 30, 2023.

During September 27, 2023, SC Autosports established a wholly owned subsidiary, Kandi Technologies Canada Inc. (“Kandi Canada”) in Ontario, Canada.

On December 27, 2023, the shareholders of the Company approved the merger agreement and plan of merger, that the Company is to merge with and into Kandi BVI, with Kandi BVI as the surviving company upon the merger becoming effective in the second quarter of 2024 (the “Reincorporation”).

On January 1, 2024, the Company established a wholly-owned subsidiary, Kandi Electric Innovation, Inc. (“Kandi Innovation”), incorporated under the laws of the state of Nevada. Subsequently, SC Autosports became the wholly-owned subsidiary of Kandi Innovation, instead of being directly owned by the Company. 

NOTE 2 - LIQUIDITY

The Company had working capital of $266,874,509  as of December 31, 2023, an increase of $19,057,384  from the working capital of $247,817,125 as of December 31, 2022. As of December 31, 2023 and December 31, 2022, the Company’s cash and cash equivalents were $33,756,941 and $84,063,717, respectively, and the Company’s restricted cash was $59,873,127 and $66,976,554, respectively. As of December 31, 2023 and December 31, 2022, the Company had multiple certificates of deposit with a total amount of $33,947,212 and $81,191,191, respectively. These certificates of deposit have an annual interest rate from 3.25% to 3.99% which can be transferred when necessary without any penalty or any loss of interest and principal.

Although the Company expects that most of its outstanding trade receivables from customers will be collected in the next twelve months, there are uncertainties with respect to the timing in collecting these receivables.

The Company’s primary need for liquidity stems from its need to fund working capital requirements of the Company’s businesses, its capital expenditures and its general operations, including debt repayment. The Company has historically financed its operations through short-term commercial bank loans from Chinese banks, as well as its ongoing operating activities by using funds from operations, external credit or financing arrangements. Currently the Company has sufficient cash in hand to meet the existing operational needs, but the credit line is retained and can be utilized timely when the Company has special capital needs. The PRC subsidiaries have $7.1 million short-term bank loans and the US subsidiaries have $2.0 million short-term bank loans and $8.4 million long-term bank loans outstanding as of December 31, 2023.

F-15

NOTE 3 - BASIS OF PRESENTATION

The Company’s financial statements and notes are the representations of the Company’s management. Accounting policies adopted by the Company conform to generally accepted accounting principles in the United States and have been consistently applied in the Company’s presentation of its financial statements.

NOTE 4 - PRINCIPLES OF CONSOLIDATION

The Company’s condensed consolidated financial statements reflect the accounts of the Company and its ownership interests in the following subsidiaries:

(1) Continental Development Limited (“Continental”), a wholly-owned subsidiary of the Company, incorporated under the laws of Hong Kong;

(2) Zhejiang Kandi Technologies, a wholly-owned subsidiary of Continental, incorporated under the laws of the PRC;

(3) Kandi New Energy Vehicle Co. Ltd. (“Kandi New Energy”), formerly, a 50%-owned subsidiary of Zhejiang Kandi Technologies (Mr. Hu Xiaoming owned the other 50%), incorporated under the laws of the PRC. Pursuant to agreements executed in January 2011, Mr. Hu Xiaoming contracted with Zhejiang Kandi Technologies for the operation and management of Kandi New Energy and put his shares of Kandi New Energy into escrow. As a result, Zhejiang Kandi Technologies was entitled to 100% of the economic benefits, voting rights and residual interests of Kandi New Energy. Effective March 14, 2022, Mr. Hu Xiaoming transferred his 50% equity interests of Kandi New Energy to Zhejiang Kandi Technologies. As a result, Kandi New Energy has become a wholly-owned subsidiary of Zhejiang Kandi Technologies;

(4) Kandi Electric Vehicles (Hainan) Co., Ltd. (“Kandi Hainan”), a subsidiary 55% owned by Kandi New Energy and 45% owned by Zhejiang Kandi Technologies, incorporated under the laws of the PRC;

(5) Zhejiang Kandi Smart Battery Swap Technology Co., Ltd (“Kandi Smart Battery Swap”), a wholly-owned subsidiary of Zhejiang Kandi Technologies, incorporated under the laws of the PRC;

(6) Yongkang Scrou Electric Co, Ltd. (“Yongkang Scrou”), a wholly-owned subsidiary of Kandi Smart Battery Swap, incorporated under the laws of the PRC;

(7) SC Autosports (d/b/a Kandi America), a wholly-owned subsidiary of the Company, formed under the laws of the State of Texas, USA;

(8) China Battery Exchange (Zhejiang) Technology Co., Ltd. (“China Battery Exchange”), a wholly-owned subsidiary of Zhejiang Kandi Technologies, and its subsidiaries, incorporated under the laws of the PRC;

(9) Kandi America Investment, LLC (“Kandi Investment”), a wholly-owned subsidiary of SC Autosports formed under the laws of the State of Texas, USA;

(10)	Jiangxi Province Huiyi New Energy Co., Ltd. (“Jiangxi Huiyi”) and its subsidiaries, a wholly-owned subsidiary of Zhejiang Kandi Technologies, incorporated under the laws of the PRC; and
(11)	Hainan Kandi Holding New Energy Technology Co., Ltd. (“Hainan Kandi Holding”), a subsidiary of Kandi Hainan, incorporated under the laws of the PRC; Kandi Hainan owns 66.7% and a non-affiliate, Jiangsu Xingchi owns 33.3% of  Hainan Kandi Holding. Consequently, effective February 15, 2022, non-controlling interests of an aggregate of 33.3% of the equity interests of Hainan Kandi Holding held by an entity are presented in the consolidated balance sheets, separately from equity attributable to the shareholders of the Company. Non-controlling interest in the results of the Company are presented on the consolidated statement of operations as an allocation of the total income or loss for the period between non-controlling interest holders and the shareholders of the Company;
(12)	Northern Group, Inc. (“NGI”), a wholly-owned subsidiary of SC Autosports formed under the laws of the State of Wisconsin, USA; and
(13)	Kandi Technologies Canada Inc. (“Kandi Canada”), a wholly-owned subsidiary of SC Autosports formed under the laws of Canada.

F-16

NOTE 5 - USE OF ESTIMATES

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and related disclosures of contingent assets and liabilities at the balance sheet date, and the reported revenues and expenses during the reported period in the consolidated financial statements and accompanying notes. Significant accounting estimates reflected in the Company’s consolidated financial statements primarily include, but are not limited to, allowances for doubtful accounts, lower of cost and net realizable value of inventory, assessment for impairment of long-lived assets and intangible assets, valuation of deferred tax assets, change in fair value of contingent consideration, determination of share-based compensation expenses as well as fair value of stock warrants.

Management bases the estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from these estimates.

NOTE 6 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Economic and Political Risks

Part of the Company’s operations are conducted in China. As a result, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in China, and by the general state of the Chinese economy. In addition, the Company’s earnings are subject to movements in foreign currency exchange rates when transactions are denominated in Renminbi (“RMB”), which is the Company’s functional currency. Accordingly, the Company’s operating results are affected by changes in the exchange rate between the U.S. dollar and the RMB.

The Company’s operations in China are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange restrictions. The Company’s performance may be adversely affected by changes in the political and social conditions in China, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.

(b) Fair Value of Financial Instruments

ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

These tiers include:

Level 1 — defined as observable inputs such as quoted prices in active markets;

Level 2 — defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

Level 3 — defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

F-17

The Company’s financial instruments primarily consist of cash and cash equivalents, restricted cash, accounts receivable, notes receivable, other receivables, accounts payable, other payables and accrued liabilities, short-term bank loans, notes payable, and warrants.

The carrying value of cash and cash equivalents, restricted cash, accounts receivable, notes receivable, other receivables, accounts payable, other payables and accrued liabilities, and notes payable approximate fair value because of the short-term nature of these items. The estimated fair values of short-term bank loans were not materially different from their carrying value as presented due to the brief maturities and because the interest rates on these borrowings approximate those that would have been available for loans of similar remaining maturities and risk profiles. As the carrying amounts are reasonable estimates of fair value, these financial instruments are classified within Level 1 of the fair value hierarchy. The Company identified notes payable as Level 2 instruments due to the fact that the inputs to valuation are primarily based upon readily observable pricing information. The balance of notes payable, which were measured and disclosed at fair value, was $24,071,461 and $19,123,476 as of December 31, 2023 and December 31, 2022, respectively.

Contingent consideration related to the acquisitions of Jiangxi Huiyi and NGI, which is accounted for as liabilities, are measured at each reporting date for their fair value using Level 3 inputs. The fair value of contingent consideration was $2,693,000 and $1,803,000 as of December 31, 2023 and December 31, 2022, respectively. Also see Note 19.

(c) Cash and Cash Equivalents

The Company considers highly-liquid investments purchased with original maturities of three months or less to be cash equivalents.

(d) Restricted cash

Restricted cash primarily represents bank deposits for letter of credit and bank acceptance bill.

As of December 31, 2023 and December 31, 2022, the Company’s restricted cash was $59,873,127 and $66,976,554, respectively.

(e) Inventories

In the Company’s subsidiaries located in China, inventories are stated at the lower of cost or net realizable value (market value). The cost of raw materials is determined on the basis of weighted average. The cost of finished goods is determined on the basis of weighted average and comprises direct materials, direct labor and an appropriate proportion of overhead.

In the Company’s subsidiaries located in the United States, the Company values its vehicle products at the lower of specific cost or net realizable value to reflect the nature of the oversea trading operations. Specific cost consists of the amount paid to acquire the vehicle, plus the cost of transportation, custom, and duty. The cost of remaining inventory items is determined on the basis of weighted average.

Net realizable value is based on estimated selling prices less selling expenses and any further costs expected to be incurred for completion. Adjustments to reduce the cost of inventory to net realizable value are made, if required, for estimated excess, obsolescence, or impaired balances.

(f) Accounts Receivable

Accounts receivable are recognized and carried at net realizable value. The Company establishes provision for doubtful accounts when there is objective evidence that the Company may not be able to collect amounts due. Management reviews the adequacy of the provision for doubtful accounts on an ongoing basis, using historical collection trends and individual account analysis. The provision is based on management’s best estimates of specific losses on individual customer exposures, as well as historical trends of collections. Account balances are charged off against the provision after all means of collection have been exhausted and the likelihood of collection is not probable. An allowance for doubtful accounts is recorded for periods in which the Company determines credit losses are probable. In order to measure expected credit losses of the accounts receivable, the Company’s policy is to adopt aging method by reviewing and analyzing the aging of each customer, especially those with aged balances without any movement, and then assessing their financial conditions and payment plans. On top of the aging analysis, the Company also analyzed the nature and background of the customers, and analyzed the probability of recovery of the receivables. Accounts are written off after exhaustive collection efforts. If accounts receivable are to be provided for, or written off, they are recognized in the consolidated statement of operations within the operating expenses line item. If accounts receivable previously written off is recovered in a later period or when facts subsequently become available to indicate that the amount provided as an allowance for doubtful accounts was incorrect, an adjustment is made to restate allowance for doubtful accounts.

F-18

As of December 31, 2023 and December 31, 2022, credit terms with the Company’s customers were typically 60 to 180 days after delivery. The Company has agreements or purchase orders signed with the customers which state the payment term based on the scale of sales and background of the customers. The terms and agreements signed are legally enforceable. As of December 31, 2023 and 2022, the Company had $2,886,223 and $2,285,386 allowance for doubtful accounts, as per the Company management’s judgment based on their best knowledge. The Company conducts quarterly assessments of the state of the Company’s outstanding receivables and reserves any allowance for doubtful accounts if it becomes necessary.

The table below summarized the aging of the accounts receivable as of December 31, 2023 and 2022.

Aging of accounts receivable as of December 31, 2022	Outstanding balance		Subsequent collection(1)
1 to 90 days	$	17,696,095	$	17,269,833
91 to 180 days		1,863,518		1,775,104
Over 180 days		634,596		634,596
Over one year		1,104,456		258,981
Over two years		19,137,597		16,312,594
Total	$	40,436,262	$	36,251,108

Aging of accounts receivable as of December 31, 2023	Outstanding balance		Subsequent collection(1)
1 to 90 days	$	13,532,753	$	8,614,006
91 to 180 days		4,810,095		1,025,240
Over 180 days		142,122		111,448
Over one year		287,967		197,550
Over two years		3,065,031		49,506
Total	$	21,837,968	$	9,997,750

(1) the Company reviewed the subsequent collection until March 10, 2024.

(g) Notes Receivable

Notes receivable represent short-term loans to third parties with maximum terms of six months. Interest income is recognized according to each agreement between a borrower and the Company on an accrual basis. For notes receivable with banks, the interest rates are determined by banks. For notes receivable with other parties, the interest rates are based on agreements between the parties. If notes receivable are paid back, that transaction will be recognized in the relevant year. If notes receivable are not paid back, or are written off, that transaction will be recognized in the relevant year once default is probable, reasonably assured, and the loss can be reasonably estimated. The Company will recognize income if the written-off loan is recovered at a future date. In case of any foreclosure proceedings or legal actions, the Company provides an accrual for the related foreclosure and litigation expenses. If the Company decides to discount notes receivable for the purpose of receiving immediate cash, the current discount rate is approximately in the range of 1.5% to 2.2% annually depends on different banks. As of December 31, 2023 and 2022, the Company had notes receivable from unrelated parties of $124,473,111 and $434,461, respectively, which notes receivable typically mature within six months.

F-19

(h) Property, Plant and Equipment, net

Property, Plant and equipment are carried at cost less accumulated depreciation. Depreciation is calculated over the asset’s estimated useful life, using the straight-line method. Leasehold improvements are amortized over the life of the asset or the term of the lease, whichever is shorter. Estimated useful lives are as follows:

Buildings	20-40 years
Machinery and equipment	10 years
Office equipment	5 years
Motor vehicles	5 years
Molds	5 years

The costs and related accumulated depreciation of assets sold or otherwise retired are eliminated from the Company’s accounts and any gain or loss is included in the statements of income. The cost of maintenance and repairs is charged to expenses as incurred, whereas significant renewals and betterments are capitalized.

(i) Land Use Rights, net

Land in China is owned by the government and land ownership rights cannot be sold to an individual or to a private company. However, the Chinese government grants the user a “land use right” to use the land. The land use rights granted to the Company are amortized using the straight-line method over a term of fifty years.

The Company elected the practical expedient that permits the Company to carry forward the accounting treatment for land use rights in existing agreements as of the effective date of ASC 842.

Upon the adoption of ASC 842 on January 1, 2019, the new land use rights agreements signed beyond the effective date are identified as operating lease right-of-use assets, whereas the existing agreements as of the effective date are separately disclosed as “Land use rights” in the Company’s consolidated balance sheets.

(j) Accounting for the Impairment of Long-Lived Assets

The Company periodically evaluates the carrying value of long-lived assets to be held and used, including intangible assets subject to amortization, when events and circumstances warrant such a review, pursuant to the guidelines established in ASC Topic 360 Impairment or Disposal of Long-Lived Assets. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair market values are reduced for disposal costs.

The Company recognized impairment loss of $942,591 and $2,697,521 for finite-lived intangible assets as of December 31, 2023 and December 31, 2022, respectively.

F-20

(k) Revenue Recognition

The Company adopted ASC Topic 606 Revenue from Contracts with Customers with a date of the initial application of January 1, 2018 using the modified retrospective method. As a result, the Company has changed its accounting policy for revenue recognition. The impact of the adoption of ASC Topic 606 on the Company’s consolidated financial statements is not material.

The Company recognizes revenue when goods or services are transferred to customers in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contract with customer; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

The Company generates revenue through the sales of EV parts and off-road vehicles, as well as commission income. The revenue is recognized at a point in time once the Company has determined that the customer has obtained control over the product or the control of the promised services. Control is typically deemed to have been transferred to the customer when the performance obligation is fulfilled, usually at the time of delivery, at the net sales price (transaction price). Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. Shipping and handling costs for product shipments occur prior to the customer obtaining control of the goods are accounted for as fulfillment costs rather than separate performance obligations and recorded as sales and marketing expenses.

See Note 24 “Segment Reporting” for disaggregation of revenue by reporting segments. The Company believes this disaggregation best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

(l) Research and Development

Expenditures relating to the development of new products and processes, including improvements to existing products as well as research and development and consulting work performed by third parties, are expensed as incurred. Research and development expenses were $4,265,176 and $6,029,608 for the years ended December 31, 2023 and 2022, respectively.

(m) Government Grants

Government grants are recognized when there is reasonable assurance that: (1) the recipient will comply with the relevant conditions and (2) the grant will be received. After initial recognition, government grants are recognized in profit or loss on a systematic basis that mirrors the manner in which the Company recognizes the underlying costs for which the grant is intended to compensate. If some, or all, of a government grant becomes repayable (e.g. due to non-fulfillment of the grant conditions), then the repayment is accounted for prospectively as a change in accounting estimate. The effect of the change in estimate is recognized in the period in which management concludes that it is no longer reasonably assured that all of the grant conditions will be met. A corresponding financial liability is recognized for the amount of the repayment.

For the years ended December 31, 2023 and 2022, $2,017,551 and $1,639,328, respectively, were received by the Company’s subsidiaries from the Chinese government.

F-21

(n) Income Taxes

The Company accounts for income tax using an asset and liability approach, which allows for the recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred income taxes are recognized for differences between the financial reporting and tax bases of assets and liabilities at enacted tax rates in effect for the years in which the differences are expected to reverse. The accounting for deferred tax calculation represents the Company management’s best estimate of the most likely future tax consequences of events that have been recognized in our financial statements or tax returns and related future anticipation. A valuation allowance is recorded to reduce the deferred tax assets to an amount that is more likely than not to be realized after considering all available evidence, both positive and negative.

(o) Foreign Currency Translation

The accompanying consolidated financial statements are presented in United States dollars. The functional currency of the Company is the Renminbi (RMB). Capital accounts of the consolidated financial statements are translated into United States dollars from RMB at their historical exchange rates when the capital transactions occurred.

Assets and liabilities are translated at the exchange rates as of balance sheet date. Income and expenditures are translated at the average exchange rate of the reporting period, which rates are obtained from the website: http://www.oanda.com

	December 31,		December 31,
	2023		2022
Period end RMB : USD exchange rate		7.0698		6.8973
Average RMB : USD exchange rate		7.0727		6.7284

(p) Comprehensive Income (Loss)

Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income (loss) are required to be reported in a financial statement that is presented with the same prominence as other financial statements. Comprehensive income (loss) includes net income (loss) and the foreign currency translation changes.

(q) Segments

In accordance with ASC 280-10, Segment Reporting, the Company’s chief operating decision maker (“CODM”), identified as the Company’s Chief Executive Officer, relies upon the consolidated results of operations as a whole when making decisions about allocating resources and assessing the performance of the Company. As a result of the assessment made by CODM, the Company has only one reportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting. As the Company’s long-lived assets are substantially located in the PRC, no geographical segments are presented.

(r) Stock Option Expenses

The Company’s stock option expenses are recorded in accordance with ASC 718 and ASC 505.

The fair value of stock options is estimated using the Binomial Tree model. The Company’s expected volatility assumption is based on the historical volatility of the Company’s common stock. The expected life assumption is primarily based on the expiration date of the option. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The recognition of stock option expenses is based on awards expected to vest.

The stock-based option expenses for the years ended December 31, 2023 and 2022 were $3,476,058 and $1,231,566, respectively. There were no forfeitures estimated during the reporting period.

F-22

(s) Goodwill

The Company allocates goodwill from business combinations to reporting units based on the expectation that the reporting unit is to benefit from the business combination. The Company evaluates its reporting units on an annual basis and, if necessary, reassigns goodwill using a relative fair value allocation approach. Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit.

Application of the goodwill impairment test requires judgments, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and the determination of the fair value of each reporting unit. The Company first assesses qualitative factors to determine whether it is more likely than not that goodwill is impaired. If the more likely than not threshold is met, the Company performs a quantitative impairment test.

The Company applies the reporting unit criteria in ASC 350-20 to the components to determine if the reporting unit should be identified one level below the operating segment. Each component will be evaluated to determine if: (a) it is a business (as defined in ASC 805), (b) discrete financial information is available and (c) the operating results are regularly reviewed by the segment manager(s). If the components of a specific operating segment meet these criteria, they might be deemed to be separate reporting units. However, if they have similar economic characteristics (which is a matter of judgment based on individual facts and circumstances), these components must be aggregated into one reporting unit. There are four reporting units under the goodwill impairment analysis, namely 1) SC Autosports, 2) Jinhua An kao and Yongkang Scrou, 3) Jiangxi Huiyi, and 4) NGI.

As of December 31, 2023 and 2022, the Company performed goodwill impairment testing at the reporting unit level and recognized impairment loss of $496,981 and $642,665, respectively.

(t) Intangible Assets

Intangible assets consist of patent, trade names, customer relations and technology associated with the purchase price from the allocation of Kandi Smart Battery Swap, Jiangxi Huiyi, Hainan Kandi Holding and NGI. Such assets are being amortized over their estimated useful lives. Intangible assets were amortized as of December 31, 2023. The amortization expenses for intangible assets were $1,489,657 and $1,965,490 for the years ended December 31, 2023 and 2022, respectively.

The Company recognized impairment loss of $942,591 and $2,697,521 for finite-lived intangible assets as of December 31, 2023 and December 31, 2022, respectively.

(u) Accounting for Sale of Common Stock and Warrants

In connection of the issuance of common stocks, the Company may issue options or warrants to purchase common stock. Warrants classified as equity are initially recorded at fair value and subsequent changes in fair value are not recognized as long as the warrants continue to be classified as equity.

F-23

(v) Consolidation of variable interest entities

In accordance with accounting standards regarding consolidation of variable interest entities, or VIEs, VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision making ability. All VIEs with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes.

Based on the contractual arrangements, Kandi New Energy had been deemed as a VIE and that the Company’s wholly-owned subsidiary, Zhejiang Kandi Technologies, absorbs all risk of loss from the activities of this VIE, thereby enabling the Company, through Zhejiang Kandi Technologies, to receive all of its expected residual returns. Therefore, although Kandi Technologies only owns 50% equity in Kandi New Energy, for accounting purpose, Kandi Technologies is the sole beneficiary and shall be wholly included in the consolidation.

Additionally, because Kandi New Energy is under common control with other entities, the consolidated financial statements have been prepared as if the transactions had occurred retroactively as to the beginning of the reporting period of these consolidated financial statements.

Control and common control are defined under the accounting standards as “an individual, enterprise, or immediate family members who hold more than 50 percent of the voting ownership interest of each entity.” Because the owners collectively owned 100% of Kandi New Energy, and had agreed to vote their interests in concert since the establishment of each of these three companies as memorialized in the Voting Rights Proxy Agreement, the Company believes that the owners collectively have control and common control of Kandi New Energy. Accordingly, the Company believes that Kandi New Energy was constructively held under common control by Zhejiang Kandi Technologies as of the time the contractual agreements were entered into, establishing Zhejiang Kandi Technologies as their primary beneficiary. Zhejiang Kandi Technologies, in turn, is owned by Continental, which is owned by the Company.

The Company has completed the conversion of Kandi New Energy to a wholly-owned subsidiary of Zhejiang Kandi Technologies, effective March 14, 2022. The Company no longer has any VIE subsequent to March 14, 2022. There was no other VIE contractual arrangements during the year ended December 31, 2023.

For accounting purpose, the tables below are condensed consolidating schedules summarizing separately the results of operations, financial position and cash flows of the parent company including non-VIE subsidiaries and Kandi New Energy, which was deemed as an VIE since the Company only owned 50% of the equity, and control Kandi New Energy through several contractual agreements prior to its conversion to a wholly-owned subsidiary of Zhejiang Kandi Technologies effective March 14, 2022, together with eliminating adjustments:

Consolidated Statements of Operations Information

	For the year ended December 31, 2022
	Parent including non-VIE subsidiaries			VIE*		Elimination		Consolidated
Revenues	$	117,813,049		$	-	$	-	$	117,813,049
Gross profit	$	19,517,726		$	-	$	-	$	19,517,726
Loss from operations	$	(27,679,432	)	$	-	$	-	$	(27,679,432	)
Loss before income taxes	$	(13,338,534	)	$	-	$	-	$	(13,338,534	)
Net loss	$	(12,851,024	)	$	-	$	-	$	(12,851,024	)

* Effective March 14, 2022, the Company has completed the conversion of Kandi New Energy to a wholly-owned subsidiary of Zhejiang Kandi Technologies and the VIE agreements were terminated. The Company no longer has any VIE as of the date of this report.

F-24

Consolidated Balance Sheets Information

	As of December 31, 2022
	Parent including non-VIE subsidiaries		VIE*		Elimination		Consolidated
Cash and cash equivalents	$	84,063,717	$	-	$	-	$	84,063,717
Total current assets	$	329,322,973	$	-	$	-	$	329,322,973
Total non-current assets	$	153,659,303	$	-	$	-	$	153,659,303
Total current liabilities	$	81,505,848	$	-	$	-	$	81,505,848
Total non-current liabilities	$	3,783,457	$	-	$	-	$	3,783,457
Total stockholders’ equity	$	397,692,971	$	-	$	-	$	397,692,971

* Effective March 14, 2022, the Company has completed the conversion of Kandi New Energy to a wholly-owned subsidiary of Zhejiang Kandi Technologies and the VIE agreements were terminated. The Company no longer has any VIE as of the date of this report.

Percentage of VIE’s assets and liabilities compared to consolidated assets and liabilities

	As of December 31, 2022
	Parent including non-VIE subsidiaries		Consolidated		% of VIE’s assets and liabilities in consolidated assets and liabilities
Cash and cash equivalents	$	84,063,717	$	84,063,717		-
Total current assets	$	329,322,973	$	329,322,973		-
Total non-current assets	$	153,659,303	$	153,659,303		-
Total current liabilities	$	81,505,848	$	81,505,848		-
Total non-current liabilities	$	3,783,457	$	3,783,457		-
Total stockholders’ equity	$	397,692,971	$	397,692,971		-

* Effective March 14, 2022, the Company has completed the conversion of Kandi New Energy to a wholly-owned subsidiary of Zhejiang Kandi Technologies and the VIE agreements were terminated. The Company no longer has any VIE as of the date of this report.

Consolidated Cash Flows Information

	For the year ended December 31, 2022
	Parent including non-VIE subsidiaries			VIE*		Elimination		Consolidated
Net cash provided by operating activities	$	31,478,911		$	-	$	-	$	31,478,911
Net cash used in investing activities	$	(35,031,115	)	$	-	$	-	$	(35,031,115	)
Net cash used in financing activities	$	(4,333,088	)	$	-	$	-	$	(4,333,088	)

* Effective March 14, 2022, the Company has completed the conversion of Kandi New Energy to a wholly-owned subsidiary of Zhejiang Kandi Technologies and the VIE agreements were terminated. The Company no longer has any VIE as of the date of this report.

F-25

NOTE 7 - NEW ACCOUNTING PRONOUNCEMENTS

Accounting Pronouncements Adopted

In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805) – Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, as if it had originated the contracts. Prior to this ASU, an acquirer generally recognizes contract assets acquired and contract liabilities assumed that arose from contracts with customers at fair value on the acquisition date. The ASU is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The ASU is applied prospectively to business combinations occurring on or after the effective date of the amendment (or if adopted early as of an interim period, as of the beginning of the fiscal year that includes the interim period of early application). The Company has adopted this accounting pronouncement from January 1, 2023, and there was no material impact on its consolidated financial statements from the adoption.

Issued Accounting Standards Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in the ASU require that a public entity discloses, on an annual and interim basis, significant segment expenses that are regularly provided to an entity’s chief operating decision maker (“CODM”), a description of other segment items by reportable segment, and any additional measures of a segment’s profit or loss used by the CODM when deciding how to allocate resources. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Retrospective application is required for all prior periods presented, and early adoption is permitted. The Company does not expect the adoption of ASU No. 2023-07 to have a material impact on the Company’s consolidated financial statements or disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes: Improvements to Income Tax Disclosures. This guidance requires consistent categories and greater disaggregation of information in the rate reconciliation and disclosures of income taxes paid by jurisdiction. The guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and should be applied either prospectively or retrospectively. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures.

NOTE 8 - CONCENTRATIONS

(a) Customers

For the years ended December 31, 2023 and 2022, the Company’s major customers, who accounted for more than 10% of the Company’s consolidated revenue, were as follows:

	Sales			Trade Receivable
	Year Ended
	December 31，			December 31，			December 31，
Major Customers	2023			2023			2022
Customer A		26	%		1	%		1	%
Customer B		19	%		4	%		-
Customer C		11	%		4	%		-

	Sales			Trade Receivable
	Year Ended
	December 31,			December 31,			December 31,
Major Customers	2022			2022			2021
Customer A		26	%		1	%		-

(b) Suppliers

For the years ended December 31, 2023 and 2022, the Company’s material suppliers, each of whom accounted for more than 10% of the Company’s total purchases, were as follows:

	Purchases			Accounts Payable
	Year Ended
	December 31，			December 31，			December 31，
Major Suppliers	2023			2023			2022
Zhejiang Kandi Supply Chain Management Co., Ltd.(1)		20	%		26	%		32	%

	Purchases			Accounts Payable
	Year Ended
	December 31,			December 31,			December 31,
Major Suppliers	2022			2022			2021
Zhejiang Kandi Supply Chain Management Co., Ltd.(1)		22	%		32	%		11	%

(1) Zhejiang Kandi Technologies owns 10% equity interest of the supplier.

F-26

NOTE 9 - EARNINGS (LOSS) PER SHARE

The Company calculates earnings (loss) per share in accordance with ASC 260, Earnings Per Share, which requires a dual presentation of basic and diluted earnings (loss) per share. Basic earnings (loss) per share are computed using the weighted average number of shares outstanding during the reporting period. Diluted earnings (loss) per share represents basic earnings (loss) per share adjusted to include the potentially dilutive effect of outstanding stock options and warrants (using treasury stock method).

Due to the average market price of the common stock during the period being below the exercise price of certain options and warrants, approximately 968,019 options and 8,131,332 warrants that were wholly expired in May 2023 were excluded from the calculation of diluted earnings per share, for the year ended December 31, 2023. There were dilutive effects of 1,121,797 shares for 3,333,339 stock options granted on September 7, 2022, at an exercise price of $2.07 per share, for the year ended December 31, 2023.

Due to the net loss for the year ended December 31, 2022, approximately 5,900,000 options and 8,131,332 warrants were excluded from the calculation of diluted loss per share, for the year ended December 31, 2022. 

NOTE 10 - ACCOUNTS RECEIVABLE, NET

Accounts receivable are summarized as follows:

	December 31,			December 31,
	2023			2022
Accounts receivable	$	21,837,968		$	40,436,262
Less: allowance for doubtful accounts		(2,886,223	)		(2,285,386	)
Accounts receivable, net	$	18,951,745		$	38,150,876

The following table sets forth the movement of provision for doubtful accounts:

	Allowance for Doubtful Accounts
BALANCE AT DECEMBER 31, 2021	$	3,053,277
Provision		456,974
Recovery		(999,775	)
Exchange rate difference		(225,090	)
BALANCE AT DECEMBER 31, 2022	$	2,285,386
Provision		690,236
Recovery		(33,906	)
Exchange rate difference		(55,493	)
BALANCE AT DECEMBER 31, 2023	$	2,886,223

F-27

NOTE 11 - INVENTORIES

Inventories are summarized as follows:

	December 31,		December 31,
	2023		2022
Raw material	$	6,248,888	$	6,551,450
Work-in-progress		4,061,146		4,114,550
Finished goods and finished goods on consignment*		51,241,234		29,809,366
Inventories	$	61,551,268	$	40,475,366

* As of December 31, 2023, approximately $50.5 million of finished goods and finished goods on consignment of off-roads and EVs held by SC Autosports were pledged as collateral for the $2,000,000 short-term loan.

NOTE 12 - NOTES RECEIVABLE

Notes receivable are summarized as follows:

	December 31,			December 31,
	2023			2022
Notes receivable as below:
Bank acceptance notes	$	-		$	434,461
Commercial acceptance notes		124,473,111	*		-
Notes receivable	$	124,473,111		$	434,461

* As of December 31, 2023, there was $124,473,111 notes receivable from unrelated parties, among which $60.8 million was due on January 3, 2024 and $63.7 million was due on January 5, 2024. By end of January 2024, $124,473,111 notes receivable was wholly settled with cash collection subsequently.

F-28

NOTE 13 - PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment as of December 31, 2023 and 2022 consisted of the following:

	December 31,			December 31,
	2023			2022
At cost:
Buildings(1)	$	61,964,058		$	49,239,626
Machinery and equipment(2)		74,520,599			77,845,979
Office equipment		1,474,944			1,528,135
Motor vehicles and other transport equipment		695,383			1,810,825
Molds and others		13,011,196			10,983,573
		151,666,180			141,408,138
Less : Accumulated depreciation		(52,862,408	)		(44,239,385	)
Property, plant and equipment, net	$	98,803,772		$	97,168,753

The Company’s Jinhua factory completed the relocation to a new industrial park in April 2021. The new location covers an area of more than 58,000 square meters and a construction area of more than 96,000 square meters. The Company’s off-road vehicles, EV battery packs, electric scooters battery packs, smart battery swap system and some EV parts are manufactured in the Jinhua factory. The Company’s Jinhua factory owns the above production facilities. The  Company’s  EV products, EV parts and electrical off-road vehicles, including Neighborhood EVs (“NEVs”), pure electric utility vehicles (“UTV”), pure electric golf cart and EV parts are manufactured in the Hainan factory. The Company’s Hainan factory expects to have production capacity with an annual output (three shifts) of 100,000 units of various models of EV products, EV parts and electrical off-road vehicles and owns the above facilities. As of December 31, 2023, the Hainan factory has passed the completion acceptance inspection.

Depreciation expenses for the years ended December 31, 2023 and 2022 were $10,141,120 and $10,165,138, respectively.

(1)	As of December 31, 2023, approximately $12.4 million of buildings held by Kandi Investment were pledged as collateral for the $8,178,574 long-term loan.
(2)	As of December 31, 2023, machinery and equipment with carrying value totaling approximately $24.2 million were pledged to banks as collateral for credit limits and loans.

NOTE 14 - INTANGIBLE ASSETS

Intangible assets include acquired other intangibles of trade name, customer relations, patent and technology recorded at estimated fair values in accordance with purchase accounting guidelines for acquisitions.

The following table provides the gross carrying value and accumulated amortization for each major class of our intangible assets, other than goodwill:

	Remaining	December 31,			December 31,
	useful life	2023			2022
Cost:
Patent	1.5-3.17 years	$	4,818,262			4,938,765
Technology	3-5 years		9,759,823			10,003,915
Customer relation	2.92 years		1,030,000			-
			15,608,085			14,942,680
Less : Accumulated amortization
Patent		$	(3,281,463	)		(2,744,024	)
Technology			(2,391,950	)		(1,573,079	)
Customer relation			(28,611	)		-
			(5,702,024	)		(4,317,103	)
Less : Accumulated impairment for intangible assets			(3,510,236	)		(2,631,465	)
Intangible assets, net		$	6,395,825		$	7,994,112

F-29

The aggregate amortization expenses for those intangible assets that continue to be amortized is reflected in amortization of intangible assets in the Consolidated Statements of Income and Comprehensive Income and were $1,489,657 and $1,965,490 for the year ended December 31, 2023 and 2022, respectively.

Amortization expenses for the next five years and thereafter are as follows:

Years ended December 31,
2024	$	1,718,689
2025		1,657,930
2026		1,426,023
2027		820,390
2028		772,793
Thereafter		-
Total	$	6,395,825

NOTE 15 - LAND USE RIGHTS

The Company’s land use rights consist of the following:

	December 31,			December 31,
	2023			2022
Cost of land use rights	$	3,716,267		$	3,809,211
Less: Accumulated amortization		(961,825	)		(899,261	)
Land use rights, net	$	2,754,442		$	2,909,950

The amortization expense for the years ended December 31, 2023 and 2022 were $84,471 and $88,794, respectively.

Amortization expense for the next five years and thereafter is as follows:

Years ended December 31,
2024	$	84,471
2025		84,471
2026		84,471
2027		84,471
2028		84,471
Thereafter		2,332,087
Total	$	2,754,442

NOTE 16 - OTHER LONG-TERM ASSETS

	December 31,		December 31,
	2023		2022
Prepayments for land use right (i)	$	3,738,418		3,917,226
Right - of - use asset (ii)		5,889,690		6,383,824
Others		365,022		329,861
Total other long-term asset	$	9,993,130	$	10,630,911

(i) As of December 31, 2023 and December 31, 2022, the Company’s other long term assets included net value of prepayments for land use right of Hainan facility of $3,738,418 and $3,917,226, respectively. As of December 31, 2023, the land use right of Hainan was not recognized since the land certificate is still in process. The amortization expense for the year ended December 31, 2023 and 2022 were $83,196 and $87,453, respectively.

(ii) As of December 31, 2023 and December 31, 2022, the Company’s operating lease right-of-use assets in other long term assets included net value of land use right of Jinhua facility acquired in October 2020 and Jiangxi facility acquired in October 2021 of $5,443,448 and $5,697,720, respectively, as well as the amount of $446,242 and $686,104 related to the lease of Hangzhou office starting January 1, 2022. The amortization expense of land use right of Jinhua facility and Jiangxi facility for the year ended December 31, 2023 and 2022 were $115,204 and $121,099, respectively.

F-30

NOTE 17 - TAXES

(a) Corporation Income Tax

Pursuant to the tax laws and regulations of the PRC, the Company’s applicable corporate income tax (“CIT”) rate is 25%. However, Zhejiang Kandi Technologies, Kandi Smart Battery Swap, Jiangxi Huiyi and Kandi Hainan qualify as High and New Technology Enterprise (“HNTE”) companies in the PRC, and are entitled to a reduced income tax rate of 15% for the years presented. An HNTE Certificate is valid for three years. An entity may renew its HNTE certificate when the prior certificate expires. Historically, Zhejiang Kandi Technologies, Kandi Smart Battery Swap, Jiangxi Huiyi and Kandi Hainan have successfully renewed for such certificates when their prior certificates expired. Additionally, Hainan Kandi Holding also has an income tax rate of 15% due to its local preferred tax rate in Hainan Free Trade Port. The applicable CIT rate of each of the Company’s other PRC subsidiaries, Kandi New Energy, Yongkang Scrou, China Battery Exchange and its subsidiaries is 25%.

The Company’s provision or benefit from income taxes for interim periods is determined using an estimate of the Company’s annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter the Company updates its estimate of the annual effective tax rate, and if its estimated tax rate changes, management makes a cumulative adjustment. For 2023, the Company’s effective tax rate is favorably affected by a super-deduction for qualified research and development costs in China and adversely affected by non-deductible expenses such as stock rewards for non-US employees, add back of GILTI income and part of entertainment expenses. The Company records valuation allowances against the deferred tax assets associated with losses and other timing differences for which we may not realize a related tax benefit. After combining research and development tax credits of 25% on certain qualified research and development expenses, the Company’s effective tax rate for December 31, 2023 and 2022 was a tax expense of 51.92% on a reported income before taxes of approximately $3.5 million and a tax benefit of 3.65% on a reported loss before taxes of approximately $13.3 million, respectively. The effective tax rates for each of the periods mentioned above are disclosed in the summary table of income tax expenses for December 31, 2023 and 2022.

Under ASC 740 guidance relating to uncertain tax positions, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. As of December 31, 2023, the Company did not have any liability for unrecognized tax benefits. The Company files income tax returns with the U.S. Internal Revenue Services (“IRS”) and those states where the Company has operations. The Company is subject to U.S. federal or state income tax examinations by the IRS and relevant state tax authorities. During the periods open to examination, the Company has net operating loss carry forwards (“NOLs”) for U.S. federal and state tax purposes that have attributes from closed periods. Since these NOLs may be utilized in future periods, they remain subject to examination. The Company also files certain tax returns in the PRC. As of December 31, 2023, the Company was not aware of any pending income tax examinations by U.S. or PRC tax authorities. The Company records interest and penalties on uncertain tax provisions as income tax expense. As of December 31, 2023, the Company has no accrued interest or penalties related to uncertain tax positions.

Income tax expenses (benefit) for the year ended December 31, 2023 and 2022 are summarized as follows:

	For Year Ended
	December 31,
	2023		2022
Current:
Provision for CIT	$	1,599,668	$	(26,465	)
Deferred:
Provision for CIT		203,236		(461,045	)
Income tax expense (benefit)	$	1,802,904	$	(487,510	)

F-31

The reconciliation of taxes at the PRC statutory rate (25% in 2023 and 2022) to our provision for income taxes for the years ended December 31, 2023 and 2022 was as follows:

	For Year Ended
	December 31,
	2023			2022
Expected taxation at PRC statutory tax rate	$	1,885,374		$	(3,334,633)
Effect of differing tax rates in different jurisdictions		650,434			(81,257	)
Effect of PRC preferential tax rates		(2,471,114	)		790,053
Non-taxable income		(898,290	)		(1,984,855	)
Non-deductible expenses		3,830,387			2,315,146
Research and development super-deduction		(1,516,020	)		(1,672,428	)
Over-accrued EIT for previous years		(431	)		(538,545	)
Addition to valuation allowance		467,366			2,800,862
Foreign tax credit		(70,708	)		(84,045	)
Other (including intercompany transaction )		(74,094	)		1,302,192
Income tax expense (benefit)	$	1,802,904		$	(487,510	)

The tax effects of temporary differences that give rise to the Company’s net deferred tax assets and liabilities as of December 31, 2023 and December 31, 2022 are summarized as follows:

	December 31,			December 31,
	2023			2022
Deferred tax assets:
Accruals and reserves	$	6,388,121		$	6,759,952
Loss carried forward		9,412,846			8,547,725
Total deferred tax assets		15,800,967			15,307,677
Deferred tax liabilities:
Expense		(345,033	)		(212,143	)
Tangible		(218,406	)		(207,905	)
Intangible		(763,627	)		(1,146,339	)
Revenue		(1,222,344	)		(426,504	)
Total deferred tax liability		(2,549,410	)		(1,992,891	)
Net deferred tax assets	$	13,251,557		$	13,314,786
less: valuation allowance		(13,400,638	)		(13,260,631	)
Net deferred tax (liabilities) assets, net of valuation allowance	$	(149,081	)	$	54,155

The tax effected aggregate Net Operating Loss (“NOL”) was $9.4 million and $8.5 million in tax year 2023 and 2022, which were deriving from entities in the PRC and Hong Kong. Some of the NOLs will start to expire from 2026 if they are not used. The cumulative NOL in the PRC can be carried forward for five years in general, and ten years for entities qualify High and New Technology Enterprise (“HNTE”) treatment, which is $0.7 million and $8.6 million respectfully, to offset future net profits for income tax purposes.

The Company recorded valuation allowances of $13.4 million as of December 31, 2023, against the deferred tax assets associated with losses and other timing differences for which we may not realize a related tax benefit. Tax benefit of operating loss is evaluated on an ongoing basis including a review of historical and projected future operating results, the eligible carry forward period, and available tax planning strategies.

F-32

Income (loss) before income taxes from PRC and non-PRC sources for the year ended December 31, 2023 and 2022 are summarized as follows:

	For Year Ended
	December 31,
	2023			2022
Income (loss) before income taxes consists of:
PRC	$	23,550,796		$	(10,448,802	)
Non-PRC		(20,078,125	)		(2,889,732	)
Total	$	3,472,671		$	(13,338,534	)

Net change in the valuation allowance of deferred tax assets are summarized as follows:

Net change of valuation allowance of Deferred tax assets
Balance at December 31,2022	$	13,260,631
Additions-change to tax expense		467,366
Prior year true up		(5,478	)
Exchange rate difference		(321,881	)
Balance at December 31,2023	$	13,400,638

(b) Tax Holiday Effect

For the year ended December 31, 2023 and 2022, the PRC CIT rate was 25%. Certain subsidiaries of the Company are entitled to tax exemptions (tax holidays) for the years ended December 31, 2023 and 2022.

The combined effects of income tax expense exemptions and reductions available to the Company for the years ended December 31, 2023 and 2022 are as follows:

	Year Ended
	December 31,
	2023		2022
Tax benefit (holiday) credit	$	2,421,539	$	1,202,615
Basic net income per share effect	$	0.03	$	0.02

F-33

NOTE 18 - LEASES AND RIGHT-OF-USE-ASSETS

During October 2020, land use right of gross value of $3.5 million was acquired from the government as the new site of Jinhua Facility’s relocation as per the Repurchase Agreement. On October 31, 2021, the Company acquired $2.8 million of land use rights through the acquisition of Jiangxi Huiyi. This land use rights was wholly prepaid.

The Company has entered into a lease for Hangzhou office, with a term of 48 months from January 1, 2022 to December 31, 2025. The Company recorded operating lease assets and operating lease liabilities on January 1, 2022, with a remaining lease term of 48 months and discount rate of 3.70%. The annual lease payment for 2022 was prepaid as of January 1, 2022. As of December 31, 2023, the Company has paid the lease amount of both year 2022 and 2023 totaling $490,198.

The Company also elected to apply the short-term lease exception for lease arrangements with a lease term of 12 months or less at commencement. Lease terms used to compute the present value of lease payments do not include any option to extend, renew or terminate the lease that the Company is not able to reasonably certain to exercise upon the lease inception. Accordingly, operating lease right-of-use assets and liabilities do not include leases with a lease term of 12 months or less.

As of December 31, 2023, the Company’s operating lease right-of-use assets (grouped in other long-term assets on the balance sheet) was $5,889,690 and lease liability was $445,948 (grouped in other current liabilities and other long-term liabilities on the balance sheet). For the years ended December 31, 2023 and 2022, the Company’s operating lease expense were $338,233 and $355,541, respectively.

Supplemental information related to operating leases was as follows:

	Year Ended
	December 31,
	2023		2022
Cash payments for operating leases	$	338,233	$	355,541

Maturities of lease liabilities as of December 31, 2023 were as follow:

Maturity of Lease Liabilities:	Lease payable
Years ended December 31,
2024	$	218,924
2025		227,024

F-34

NOTE 19 - CONTINGENT CONSIDERATION LIABILITY

On July 19, 2021, Zhejiang Kandi Technologies signed a share transfer agreement and its supplementary agreement (“No.1 Supplementary Agreement”) with the former shareholders of Jiangxi Huiyi (the “Transferors”). On October 31, 2021, the Company completed the acquisition of 100% of the equity of Jiangxi Huiyi. Pursuant to the share transfer agreement, the Company paid approximately RMB 50 million (approximately $7.9 million) at the closing of the transaction using cash on hand and, as agreed upon under No.1 Supplementary Agreement, may be required to pay future consideration of up to an additional 2,576,310 shares of common stock, or the total make good shares, upon the achievement of certain net income-based milestones in the next three years (“Evaluation Period”, as discussed below). Due to the latest COVID-19 outbreak and extended lockdown in some areas in China, in June 2022, the Company agreed with the Transferors and jointly signed a No.2 supplementary agreement (“No.2 Supplementary Agreement”, collectively with No.1 Supplementary Agreement, “Supplementary Agreements”) to revise the conditions of the annual profit target and extension of evaluation period for the first year, which were set under No.1 Supplementary Agreement. Pursuant to the No.2 Supplementary Agreement, the Transferors have the right to obtain 858,770 KNDI shares in each of the below-mentioned periods, provided that Jiangxi Huiyi achieves a net income of 1) RMB 8 million yuan or more during the period from July 1, 2021 to September 30, 2022 (“Period I”); 2) RMB 15 million yuan or more during the period from October 1, 2022 to September 30, 2023 (“Period II”); 3) RMB 15 million yuan or more during the period from October 1, 2023 to September 30, 2024 (“Period III”). If the net income of Jiangxi Huiyi fails to reach the respective target number in any of the three periods, the shares that the Transferors are entitled to obtain in that period will be adjusted accordingly: 1) if the difference between the net income in each Period and its Target Number is less than or equivalent to 20% of its Target Number (RMB 8 Million in Period I or RMB 15 Million in Period II or Period III), the transferee or KNDI has right to directly subtract 171,754 KNDI shares from the total make good shares, and the Transferor are entitled to obtain 687,016 KNDI shares; 2) if the difference between the net income in each Period and its Target Number (RMB 8 Million in Period I or RMB 15 Million in Period II or Period III) is more than 20% of its Target Number but less than 40% of its Target Number, the transferee or KNDI has the right to directly subtract 343,508 KNDI shares from the total make good shares, and the Transferors have the right to obtain 515,262 KNDI shares; 3) if the difference between the net income in each Period and its Target Number (RMB 8 Million in Period I or RMB 15 Million in Period II or Period III) is greater than or equal to 40% of its Target Number, the transferee of KNDI has the right to directly subtract 858,770 KNDI shares from the total make good shares, and the Transferors will not have the right to obtain any shares in such year.

For the period from July 1, 2021 to September 30, 2022, Jiangxi Huiyi achieved its net profit target. Accordingly, the Transferors received 858,770 shares of Kandi’s restrictive common stock in October 2023.

In 2023, after evaluating the actual operation of Jiangxi Huiyi, the Company believes that taking over the management rights and conducting resources integration to combine Jiangxi Huiyi with the Company’s strategy are beneficial for improving the Company’s overall business performance. On August 3, 2023, Zhejiang Kandi Technologies and the Transferors signed an agreement on termination of make good shares (the “Termination Agreement”), pursuant to which the Supplementary Agreements were terminated. Zhejiang Kandi Technologies will take over the management rights while the Transferors shall not participate the management of Jiangxi Huiyi, and there was no further Evaluation Period or make good shares.

On November 30, 2023, SC Autosports acquired Northern Group, Inc. (“NGI”), a Wisconsin company, please refer to Note 25 – Acquisitions for more details.

On July 12, 2023, pursuant to the Equity Transfer Agreement, the Company issued a total of 3,951,368 shares of restrictive stock to sole shareholder of NGI, which are being held in escrow with certain escrow restrictions, to be released contingent upon the achievement of certain agreed-upon milestones during the escrow period.

The Company recorded contingent consideration liability of the estimated fair value of the contingent consideration the Company currently expects to pay to the Transferors for the achievement of the milestones. The fair value of the contingent consideration liability associated with remaining shares of restrictive common stock was estimated by using the Monte Carlo simulation method, which took into account all possible scenarios. This fair value measurement is classified as Level 3 within the fair value hierarchy prescribed by ASC Topic 820, Fair Value Measurement and Disclosures. In accordance with ASC Topic 805, Business Combinations, the Company will re-measure this liability each reporting period and record changes in the fair value through a separate line item within the Company’s consolidated statements of income.

F-35

As of December 31, 2023 and December 31, 2022, the Company’s contingent consideration liability was $2,693,000 and $1,803,000, respectively. 

Details of the contingent consideration liability as of December 31, 2023 and December 31, 2022 were as follow:

	December 31,		December 31,
	2023		2022
Contingent consideration liability to former members of Jiangxi Huiyi	$	-		1,803,000
Contingent consideration liability to former members of NGI		2,693,000		-
Total contingent consideration liability	$	2,693,000	$	1,803,000

NOTE 20 - COMMON SHARES

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

On November 21, 2023, the board of directors had authorized the repurchase of up to $30 million worth of the Company’s common stock in open market transactions or in privately negotiated transactions. As of December 31, 2023, the Company had repurchased a total of 184,566 common shares at an average stock price of $2.75 per share under the repurchase plan.

Retirement of Treasury Shares

On June 9, 2023, the Board of Directors of the Company approved to retire 3,488,559 shares of its common stock held in treasury, and the retirement was completed in June, 2023. The shares were returned to the status of authorized but unissued shares. As a part of the retirement, the Company reduced its common stock and additional paid-in capital by $9,807,820.

Issuance of Shares

On May 25, 2023, the Company entered into a consulting agreement (“Consultant Agreement”) with a consulting firm to advise the Company on business growth and financial advisory services about which this consulting firm has knowledge or experience. Pursuant to the Consultant Agreement, the Company issued the consulting firm and its designees (the “Consultant”) an aggregate of 300,000 restricted shares of the Company’s common stock for its services from May 25, 2023 to May 24, 2024.

For the year ended December 31, 2023, the Company recognized $1,083,000 of expenses for stock issued to the Consultant, respectively.

On November 30, 2023, SC Autosports acquired NGI, a Wisconsin incorporated company, please refer to Note 25 – Acquisition for more details.

F-36

NOTE 21 - STOCK OPTIONS

On September 7, 2022, the Compensation Committee of the Board of Directors of the Company approved the grant of stock options to purchase 5,000,000 shares of the Company’s common stock, at an exercise price of $2.07 per share, to the Company’s senior employees. The stock options will vest ratably over three years on October 7, 2023, October 7, 2024 and October 7, 2025, respectively, and expire on the tenth anniversary of the grant date. The Company valued the stock options at $6,704,829 and has amortized the stock compensation expense using the graded vesting method over the service period from September 7, 2022, through October 7, 2025. The value of the stock options was estimated using the Binomial Tree Model with an expected volatility of 79.83%, an expected life of 10 years, a risk-free interest rate of 3.27% and an expected dividend yield of 0.00%.

On July 1, 2023, the Compensation Committee of the Board of Directors of the Company approved the grant of stock options to purchase 68,019 shares of the Company’s common stock, at an exercise price of $3.96 per share, to the Company’s employees. The stock options will vest ratably over three years on July 1, 2024, July 1, 2025 and July 1, 2026, respectively, and expire on the tenth anniversary of the grant date. The Company valued the stock options at $172,601 and has amortized the stock compensation expense using the graded vesting method over the service period from July 1, 2023, to July 1, 2026. The value of the stock options was estimated using the Binomial Tree Model with an expected volatility of 78.08%, an expected life of 10 years, a risk-free interest rate of 3.81% and an expected dividend yield of 0.00%.

The following is a summary of the stock option activities of the Company:

	Number of Shares			Weighted Average Exercise Price
Outstanding as of December 31, 2021		900,000		$	9.72
Granted		5,000,000			2.07
Exercised		-			-
Cancelled		-			-
Forfeited		-			-
Outstanding as of December 31, 2022		5,900,000		$	3.24
Granted		68,019			3.96
Exercised		(1,666,661	)		2.07
Cancelled		-			-
Forfeited		-			-
Outstanding as of December 31, 2023		4,301,358		$	3.70

The fair value of each of the 900,000 options issued to the employees and directors on May 29, 2015 is $8.16 per share option. The fair value of each of the 5,000,000 options issued to the employees on September 7, 2022 is $1.34 per share. The fair value of each of the 68,019 options issued to the employees on July1, 2023 is $2.54 per share.

There were $3,476,058 and $1,231,566 in stock compensation expenses associated with stock options booked for the years ended December 31, 2023 and 2022, respectively.

F-37

NOTE 22 - STOCK AWARD

In connection with the appointment of Mr. Henry Yu as a member of the Board of Directors (the “Board”), the Board authorized the Company to compensate Mr. Henry Yu with 5,000 shares of Company’s restricted common stock every six months as compensation, beginning in July 2011.

As compensation for Mr. Jerry Lewin’s services as a member of the Board, the Board authorized the Company to compensate Mr. Jerry Lewin with 5,000 shares of Company’s restricted common stock every six months, beginning in August 2011.

As compensation for Ms. Kewa Luo’s services as the Company’s investor relation officer, the Board authorized the Company to compensate Ms. Kewa Luo with 2,500 shares of the Company’s common stock every three months, beginning in September 2013.

On May 15, 2020, the Board appointed Mr. Jehn Ming Lim as the Chief Financial Officer. Mr. Lim was entitled to receive 6,000 shares of the common stock annually, which shall be issuable evenly on each six-month anniversary hereof. Mr. Lim was entitled to receive 10,000 shares of the common stock per year which shall be issuable evenly on each six-month anniversary as per the renewed contract effective on May 15, 2023.

On January 10, 2023, the Board appointed Dr. Xueqin Dong as the Chief Executive Officer, Dr. Dong was entitled to receive 20,000 shares of the common stock annually.

The fair value of stock awards with service condition is determined based on the closing price of the common stock on the date the shares are granted. The compensation costs for awards of common stock are recognized over the requisite service period.

On May 10, 2022, the Company granted 238,600 shares of common stock to certain management members and employees as compensation for their past services under the 2008 Plan. On April 29, 2023, May 5, 2023 and July 1, 2023 the Company granted 588,019 shares of common stock to certain management members and employees as compensation for their past services under the 2008 Plan.

On March 13, 2023, Kandi Technologies entered into an Equity Incentive Agreement (the “Equity Incentive Agreement”) with Pan Guoqing (the “Receiving Party”), who is the representative of the project management team of the project of crossover golf carts of Kandi Electric Vehicles (Hainan) Co., Ltd. (“Kandi EV Hainan”), a wholly owned subsidiary of the Company organized under the laws of the People’s Republic of China. The Receiving Party originally led the management team of golf crossover project of Hainan Kandi Holding New Energy Technology Co., Ltd. (“Hainan Kandi Holding”), a company organized under the laws of the People’s Republic of China. The Receiving Party and its management team has agreed to be employed as management team of Kandi EV Hainan, responsible for the operation of the golf crossover project of Kandi EV Hainan, and stop production and operation of Hainan Kandi Holding’s business.

Pursuant to the Equity Incentive Agreement, for the next three calendar years ending in December 31, 2025 (the “Incentive Period”), the Company will provide equity incentives to the Receiving Party, subject to the Receiving Party meeting certain performance milestones in its role as the management team of the golf crossover project (the “Crossover Project”) of Kandi EV Hainan. The performance milestones are measured in terms of the net profit of the Crossover Project after deducting relevant operating costs and income taxes, excluding various incentives, allowances and rebates, among others, and shall be audited and confirmed by the third party auditor designated by the granting party, or the Company. The net profit target (the “Net Profit Target”) for the Incentive Period is RMB 150 million (approximately $21,719,613), with an annual net profit target (the “Annual Net Profit Target”) of RMB 50 million (approximately $7,239,871). Should the Receiving Party meet or exceed the Net Profit Target over the Incentive Period, the Company will issue to the Receiving Party as incentive compensation up to a maximum of 5,957,811 shares (the “Maximum Equity Awards”) of the Company’s common stock (the “Award Shares”) under the Company’s 2008 Omnibus Long-Term Incentive Plan, as amended (the “2008 Plan”). The amount of Award Shares issued within each calendar year of the Vesting Period is adjusted based on the net profit of the Crossover Project within that calendar year. If the net profit of every of the three calendar years is below 60% of the Annual Net Profit Target, the Receiving Party will receive no Equity Awards. If the net profit of every of the three calendar years is at or above the Annual Net Profit Target, the Receiving Party will receive the Maximum Equity Awards, with higher performance resulting in receiving the Equity Awards earlier. If the net profit of every of the three calendar years fall between 60% of the Annual Net Profit Target and the Annual Net Profit Target, the Receiving Party will receive an amount of Equity Awards below the Maximum Equity Awards. On August 28, 2023, both parties agreed to issue 5,957,811 shares ahead of the original timeline due to the good performance achieved from January to July 2023. These shares are Restricted Shares under the 2008 Plan, to be to be vested upon the achievement of certain performance targets.

F-38

The Receiving Party has no relationship to the Company other than as described above.

On September 18, 2023, the Company issued a total of 5,957,811 Restricted Shares under the 2008 Plan but have not been vested to the relevant members of the project management team. For the year ended December 31, 2023, the Annual Net Profit Target of the Crossover Project was met. Accordingly, 1,985,937 shares of Kandi’s restricted common stock will be vested to the Receiving Party.

For the years ended December 31, 2023 and 2022, the Company recognized $6,500,743 and $694,810 of employee stock award expenses for stock compensation and annual incentive award under the 2008 Plan paid to Board members, management under General and Administrative Expenses, respectively.

NOTE 23 - COMMITMENTS AND CONTINGENCIES

Guarantees and pledged collateral for bank loans to other parties:

(1) Guarantees for bank loans

On March 15, 2013, the Company entered into a guarantee contract to serve as the guarantor of Nanlong Group Co., Ltd. (“NGCL”) for NGCL’s $2,828,934 (RMB 20 million) loan from Shanghai Pudong Development Bank Jinhua Branch, for a term from March 15, 2013 to March 15, 2016. NGCL is not related to the Company. Under this guarantee contract, the Company agreed to assume joint liability as the loan guarantor. In April 2017, Shanghai Pudong Development Bank filed a lawsuit against NGCL, the Company and ten other parties in Zhejiang Province People’s Court in Yongkang City, alleging NGCL defaulted on a bank loan borrowed from Shanghai Pudong Development Bank for a principal amount of approximately $2.9 million and demanded that the guarantor bear the liability for compensation. On May 27, 2017, a judicial mediation took place in Yongkang City and parties reached a settlement in mediation, in which the plaintiff agreed NGCL would repay the loan principal and interest in installments. The settlement was executed starting from May 2019. If there were an event of default that NGCL could not repay the loan, the Company may be obligated to bear the liability of defaulted amount. According to the current financial situation of NGCL, the Company does not expect it will incur any losses in connection with this matter.

(2) Pledged collateral for bank loans for which the parties other than the Company are the borrowers.

As of December 31, 2023 and December 31, 2022, none of the Company’s land use rights or plants and equipment were pledged as collateral securing bank loans for which the parties other than the Company are the borrowers.

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Litigation

Beginning in March 2017, putative shareholder class actions were filed against Kandi Technologies Group, Inc. (“Kandi”) and certain of its current and former directors and officers in the United States District Court for the Central District of California and the United States District Court for the Southern District of New York. The complaints generally alleged violations of the federal securities laws based on Kandi’s disclosure in March 2017 that its financial statements for the years 2014, 2015 and the first three quarters of 2016 would need to be restated, and sought damages on behalf of putative classes of shareholders who purchased or acquired Kandi’s securities prior to March 13, 2017. Kandi moved to dismiss the remaining cases, all of which were pending in the New York federal court, that motion was granted in September 2019, and the time to appeal has run. In June 2020, a similar but separate putative securities class action was filed against Kandi and certain of its current and former directors and officers in California federal court. This action was transferred to the New York federal court in September 2020, Kandi moved to dismiss in March 2021, and that motion was granted in October 2021. The plaintiff in this case subsequently filed an amended complaint, Kandi moved to dismiss that complaint in January 2022, and the motion was granted in part and denied in part in September 2022. Discovery is ongoing as to the remaining claims and defendants.

Beginning in May 2017, purported shareholder derivative actions based on the same underlying events described above were filed against certain current and former directors of Kandi in the United States District Court for the Southern District of New York. The New York federal court confirmed the voluntary dismissal of these actions in April 2019.

In October 2017, a shareholder filed a books and records action against the Company in the Delaware Court of Chancery pursuant to 8 Del. C. Section 220 seeking the production of certain documents generally relating to the same underlying items described above as well as attorney’s fees (the “Section 220 Litigation”). On September 28, 2018, the parties, through their respective counsel, agreed to dismiss the Section 220 Litigation with prejudice and with each party bearing its own attorney’s fees, costs, and expenses, thereby concluding the action. In February 2019, this same shareholder commenced a derivative action against certain current and former directors of Kandi in the Delaware Court of Chancery. A motion to dismiss this derivative action was filed in May 2019 and that motion was denied on April 27, 2020. Discovery is ongoing.

Separately, in connection with allegations of misconduct identified in pre-suit demands made by putative shareholders of Kandi, Kandi formed a Special Litigation Committee (“SLC”) and retained a Delaware law firm as independent counsel to the SLC to aid in the SLC’s investigation of, and to ultimately report on, the allegations of misconduct set forth in the pre-suit demands. The SLC recommended to Kandi’s board of directors in June 2020 that the SLC be dissolved in light of the ongoing derivative action pending in the Delaware Court of Chancery, and this recommendation was adopted by the board in August 2020.

In December 2020, a putative securities class action was filed against Kandi and certain of its current officers in the United States District Court for the Eastern District of New York. The complaint generally alleges violations of the federal securities laws based on claims made in a report issued by Hindenburg Research in November 2020, and seeks damages on behalf of a putative class of shareholders who purchased or acquired Kandi’s securities prior to March 15, 2019. Kandi moved to dismiss in February 2022, and that motion remains pending.

While the Company believes that the claims in these litigations are without merit and will defend itself vigorously, the Company is unable to estimate the possible loss, if any, associated with these litigations. The ultimate outcome of any litigation is uncertain and the outcome of these matters, whether favorable or unfavorable, could have a negative impact on the Company’s financial condition or results of operations due to defense costs, diversion of management resources and other factors. Defending litigation can be costly, and adverse results in the litigations could result in substantial monetary judgments. No assurance can be made that litigation will not have a material adverse effect on the Company’s future financial position.

On September 21, 2023, the SEC filed a settled administrative order (the “Order”) against Kandi alleging violations of certain provisions of the United States’ securities laws. The Order sets forth certain findings, which the Company neither admits nor denies, regarding statements the Company made in its periodic filings and press releases that issued during the years 2020 and 2019. These statements concerned the Company’s then plans to sell highway passenger electric vehicles in the United States. Pursuant to the Order, the Company agreed to settle and completed the payment of the settlement of $710,000 by September 30, 2023. 

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NOTE 24 - SEGMENT REPORTING

The Company has one operating segment. The Company’s revenue and long-lived assets are primarily derived from and located in China and U.S. The Company does not have manufacturing operations outside of China.

The following table sets forth disaggregation of revenue:

	Year Ended December 31
	2023		2022
	Sales Revenue		Sales Revenue
Primary geographical markets
U.S. and other countries/areas	$	93,979,363	$	65,871,112
China		29,619,869		51,941,937
Total	$	123,599,232	$	117,813,049
Major products and Services
EV parts	$	5,807,973	$	8,964,094
EV products		1,214,786		7,926,233
Off-road vehicles and associated parts		106,983,891		70,622,278
Electric Scooters, Electric Self-Balancing Scooters and associated parts		683,952		4,616,683
Battery exchange equipment and Battery exchange service		674,927		1,691,486
Lithium-ion cells		7,994,227		23,992,275
Commission income		239,476		-
Total	$	123,599,232	$	117,813,049
Timing of revenue recognition
Products transferred at a point in time	$	123,359,756	$	117,813,049
Sales transactions completed at a point in time		239,476		-
Total	$	123,599,232	$	117,813,049

F-41

NOTE 25 - ACQUISITIONS

Acquisition of Northern Group Inc.

NGI, a Wisconsin incorporated company that was founded in 2000, has extensive sales experience and sales channels in the United States rooted in wholesale, retail, supply chain and analytics solutions, including more than 20 team members, 16 major retailers and 20 suppliers and brands.

On November 30, 2023, the Company, through SC Autosports, completed the acquisition of NGI pursuant to certain equity transfer agreement SC Autosports entered into with the owner of NGI to acquire 100% equity of NGI. The Company acquired all the equity interests of NGI for a purchase price of $13 million, in form of the Company’s restricted shares to the Transferors.  The Company shall issue a total of 3,951,368 restricted shares (which is calculated as the Transfer Value divided by the average closing price of the Company’s stock for the twenty trading days prior to June 1, 2023, i.e., $3.29 per share) of common stock, par value $0.001 (the “KNDI Stock”) of the Company to the Transferor, holding in escrow pending the satisfaction of the Profit Targets agreed upon.

On July 12, 2023, pursuant to the Equity Transfer Agreement, the Company issued a total of 3,951,368 shares of restrictive stock to sole shareholder of NGI, which are being held in escrow with certain escrow restrictions, to be released contingent upon the achievement of certain agreed-upon milestones during the escrow period.

Pursuant to the terms of the Equity Transfer Agreement and the Supplementary Agreement, dated as of March 12, 2024, the escrow restrictions on the KNDI Stock shall be removed sequentially based on the following conditions: 1) when NGI achieves pretax income of $4.6 million or more (“Profit Target I”) during the period from December 1, 2023 to November 30, 2024, 2,431,612 shares of KNDI Stock Transferor holds shall be fully vested by removing the escrow restriction. Notwithstanding the above, the Transferor, on December 31, 2023, can apply for vesting certain number of shares, but no more than 1,418,440 shares, with its value equal to the actual amount of pre-tax income achieved hereinunder (for example: if the pre-tax income is $3.5 million, 1,063,830 shares (3,500,000/3.29=1,063,830) shall be fully vested and without escrow restriction); 2) when NGI achieves pretax income of $5.25 million or more (“Profit Target II”) during the period from December 1, 2024 to November 30, 2025, 759,878 shares of KNDI Stock Transferor holds shall be fully vested by removing its escrow restriction; and 3) when NGI achieves pretax income of $6 million or more (“Profit Target III”, collectively with Profit Target I, and Profit Target II, “Profit Targets”) during the period from December 1, 2025 to November 30, 2026, 759,878 shares of KNDI Stock Transferor holds shall be fully vested by removing the escrow restriction. If NGI fails to reach any of the Profit Targets in any period as mentioned above, the number of KNDI Stock to be removed escrow restriction in that period shall be adjusted based on the percentage of the actual achieved pretax income. If there is any loss incurred in that period, the Transferor shall assume the loss.

As of the acquisition date, the Company recorded a contingent consideration liability of approximately $2.7 million, representing the estimated fair value of the contingent consideration the Company currently expects to pay to the NGI Transferors upon the achievement of certain Profit Targets aforementioned. The fair value of the contingent consideration liability associated with 3,951,368 shares of restrictive common stock was estimated by using Monte Carlo simulation method, which took into account all possible scenarios. This fair value measurement is classified as Level 3 within the fair value hierarchy prescribed by ASC Topic 820, Fair Value Measurement and Disclosures. In accordance with ASC Topic 805, Business Combinations, the Company will re-measure this liability each reporting period and record changes in the fair value through a separate line item within the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss).

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The components of the preliminary purchase price as of the acquisition date for NGI are as follows:

	NGI
Fair value of contingent consideration	$	2,693,000
Total	$	2,693,000

The Company accounted for the acquisition as business combinations, in accordance with ASC Topic 805. The Company has recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The following summarizes the preliminary purchase price allocations:

	NGI
Goodwill	$	1,139,438
Amortizable intangible assets		1,030,000
Other net assets		523,562
Total	$	2,693,000

Transaction costs of $45,267 associated with the acquisition were expensed as incurred through general and administrative expenses in the statement of income in 2023.

The Company allocated the preliminary purchase price to specific intangible asset categories as of the acquisition date for NGI as follows:

	Amount Assigned		Estimated useful life (in years)
Amortizable intangible assets:
Customer relation	$	1,030,000		3

The Company allocated the preliminary purchase price to specific intangible assets for patents that the Company acquired. The Company believes that the estimated intangible asset value so determined represents the fair value on the date of acquisition and do not exceed the amount a third party would pay for the assets. The Company used the asset based approach to derive the fair value of the amortizable intangible assets. These fair value measurements are based on significant unobservable inputs, including estimates and assumptions and, accordingly, are classified as Level 3 within the fair value hierarchy prescribed by the ASC Topic 820.

The Company recorded the excess of the purchase price over the estimated fair values of the identified assets as goodwill, which is non-deductible for tax purposes. Goodwill was established due to primarily to revenue and earnings projections associated with NGI’s future operations, as well as synergies expected to be gained from the integration of the business into the Company’s existed operations.

The Company’s condensed consolidated financial statements included approximately $0.2 million of revenue and approximately $6,641 of operating income related to the operating results for NGI from its date of acquisition.

The following unaudited pro forma financial information presents the combined results of operations of Kandi and the Acquired Business as if the acquisition had occurred as of January 1, 2023. The pro forma information is not necessarily indicative of what the financial position or results of operations actually would have been had the acquisition been completed as of January 1, 2023. In addition, the unaudited pro forma financial information is not indicative of, nor does it purport to project, the future financial position or operation results of Kandi. The unaudited pro forma financial information excludes acquisition and integration costs and does not give effect to any estimated and potential cost savings or other operating efficiencies that could result from acquisition. For the year ended December 31, 2023, the unaudited pro forma combined statements of income information consists of the revenue with $127,578,305, loss from operations with $12,544,014 and net income with $2,177,924.

NOTE 26 - SUBSEQUENT EVENT

During January and February of 2024, the Company had repurchased a total of 540,362 common shares at an average stock price of $2.74 per share under the repurchase plan.

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures

The Company is required to disclose in reports that are filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is: (i) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding disclosure.

The Company has evaluated, under the participation of the Company’s Chief Executive Officer and the Chief Financial Officer, the effectiveness of disclosure controls and procedures as of December 31, 2023. Based on our evaluation, we concluded that the Company’s disclosure controls were effective as of December 31, 2023. In designing and evaluating the disclosure controls and procedures, the Company’s management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and the Company’s management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

(b) Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (“ICFR”) as defined in Rules 13a-15(f) and 15d-15(f) under Exchange Act. The Company’s ICFR is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.

The Company’s ICFR includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the consolidated financial statements.

All internal control systems, no matter how well designed, have inherent limitations, so that no evaluation of controls can provide absolute assurance that all control issues are detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Therefore, any current evaluation of controls cannot and should not be projected to future periods.

52

Management conducted an assessment of the effectiveness of our system of ICFR as of December 31, 2023, the last day of our fiscal year of 2023. This assessment was based on criteria established in Internal Control—Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in 2013 (the “2013 COSO Framework”) and included an evaluation of elements such as the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies, and our overall control environment. Based on management’s evaluation under the 2013 COSO Framework, management concluded that the Company’s internal controls over financial reporting were effective as of December 31, 2023 based on those criteria.

We reviewed the results of management’s assessment with the Audit Committee of our Board of Directors.

Our independent registered public accounting firm, ARK Pro CPA & Co, has audited the effectiveness of our ICFR as of December 31, 2023 as stated in their report which is attached to the auditors’ reports included under item 8 of this report.

(c) Changes in Internal Control Over Financial Reporting

There was no change to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

Except as set forth in NOTE 26 - SUBSEQUENT EVENT under Item 8. Financial Statements and Supplementary Data, our management is currently not aware of any other information that would have a significant effect on the Company’s results of operation or financial statements. For the detailed discussion of other information that may materially influence the Company’s results of operation of financial statements, please refer to NOTE 26 - SUBSEQUENT EVENT under Item 8. Financial Statements and Supplementary Data, which is incorporated by reference herein.

Trading Plans

During the fiscal quarter ended December 31, 2023, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement”, as those terms are defined in Regulation S-K, Item 408.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

None.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

The following table sets forth certain information regarding our executive officers and members of the Company’s board of directors (the “Board of Directors”) as of March 10, 2024:

Name	Age	Position	Served From
Hu Xiaoming	67	Chairman of the Board	June 2007
Lim Jehn Ming	41	Chief Financial Officer	May 2020
Chen Liming (1),(2),(3)	87	Director (Independent)	May 2012
Lin Yi (2),(3)	71	Director (Independent)	May 2017
Jerry Lewin (1)	69	Director (Independent)	November 2010
Henry Yu (1),(2),(3)	70	Director (Independent)	July 2011
Dong Xueqin (4)	42	Chief Executive Officer, President, Director	December 2021
Wang Lin	35	Director	December 2019

(1)	Member of Audit Committee
(2)	Member of Compensation Committee
(3)	Member of Nominating and Corporate Governance Committee
(4)	Dr. Dong Xueqin has been appointed to be the Chief Executive Officer of the Company effective January 10, 2023.

Business Experience of Directors and Executive Officers

Biographical Information

Hu Xiaoming was appointed as our Chief Executive Officer, President and Chairman of the Board in June 2007. Prior to joining the Company, from October 2003 to April 2005, Mr. Hu served as the Project Manager (Chief Scientist) in the WX Pure Electric Vehicle Development Important Project of Electro-vehicle in the State 863 Plan. From October 1984 to March 2003, Mr. Hu served as: (i) Factory Director of the Yongkang Instrument Factory, (ii) Factory Director of the Yongkang Mini Car Factory, (iii) Chairman and General Manager of the Yongkang Vehicle Company, (iv) General Manager of the Wan Xiang Electric Vehicle Developing Center and (v) the General Manager of the Wan Xiang Battery Company. Mr. Hu personally owned four invention patents and seven utility model patents, which he transferred to the Company in fiscal year 2012. He resigned to be our Chief Executive Officer and President effective January 9, 2023. Mr. Hu remains being Chairman of the Board.

Dong Xueqin was appointed as our Chief Executive Officer and President effective January 10, 2023. Mr. Dong has served as a director of the Company since December 2021. He received a Doctor Engineering degree in Vehicle Engineering from Shanghai Tongji University. Dr. Dong has rich practical experience and extensive knowledge and expertise in the fields of automotive engineering, automotive safety and others. He has successively served as the General Manager of Jiangsu Xingchi Electric Power Technology Co., Ltd, the Deputy General Manager of Jiangsu Yixing Vehicles Co., Ltd, the General Manager of Yijue Automobile (Shanghai) Co., Ltd, the Deputy General Manager of business department of Automobile Design and Research Institute Co., Ltd. of Shanghai Tongji University, and the R & D Engineer of Jiangling Automobile Co., Ltd. In addition, Mr. Dong has also participated in multiple technology R & D projects, including the research and development of Class AO small urban pure electric vehicle, and test, evaluation and standard technology related to whole electric vehicle and its parts as well as infrastructures in the “863” Project of China Ministry of Science and Technology; safety technology of electric vehicles in typical crash mode in the Project of Shanghai Bureau of Quality and Technical Supervision; and so on. Furthermore, he has published 11 papers on automobile and electric vehicle engineering technology. Mr. Dong also owns 18 utility model patents, 2 invention patents and 1 appearance design patent.

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Jehn Ming Lim has extensive experience in providing financial accounting and advisory services to public and private companies and has been engaging in this profession for more than 15 years. He was the Chief Financial Officer of Takung Art Co., Ltd. (NYSE American: TKAT) from February 2019 to May 2020. Prior to that, he had been the managing director of Albeck Financial Services, a financial consulting firm from January 2013 to February 2019, mainly responsible for overseeing SEC reporting, GAAP technical consultation, financial statement audit preparation, due diligence and internal controls compliance services. He also has extensive experience in auditing private and public companies in his stints as audit manager and senior auditor of two regional accounting firms in the United States, i.e., Kabani & Company, Inc. from October 2008 through December 2012 and Stonefield Josephson, Inc. from September 2006 through October 2008, respectively and as an auditor at Ernst & Young in the United States from September 2004 through to July 2006. Mr. Lim graduated with High Honors from the University of California, Santa Barbara, with a Bachelor of Arts degree in Business Economics.

Wang Lin was appointed as a director of the Company in December 2019. Ms. Wang has been serving as Chief Financial Officer Assistant of the Company since June 2015. Before joining the Company, Ms. Wang served as Fund Accountant of State Street Technology (Zhejiang) Co., Ltd. from December 2014 to June 2015. At the Company, Ms. Wang is responsible for the preparation of consolidated financial statements in accordance with the U.S. GAAP standards, and the preparation of SEC reports, including the Annual Reports on Form 10-K and the Quarterly Reports on Form 10-Q. Ms. Wang has knowledge of the basic U.S. GAAP standards and SEC regulations. She is also familiar with the culture and business process of the Company. Mastering good communication and coordination skills, Ms. Wang also has financial management experience of U.S. listed companies. Ms. Wang received her Bachelor degree in Finance from Zhejiang Gongshang University in 2011 and received her Master degree in Accounting from Hofstra University in 2014.

Lin Yi was appointed as a director of Kandi on May 4, 2017. He has extensive experience in automotive engineering and multi-body system dynamics research. Throughout his career, he has been awarded numerous high-ranking national science and technology rewards. He served several key senior roles in academic and industrial organizations and was given Special Government Allowances from the State Council in 1992. Additionally, he was named an “Expert of China’s Machinery Industry” in 1995 and elected to the “Outstanding Young Science Talents in China’s Automobile Industry” in 1998. From 2007 to 2015, he served as a deputy chief engineer at Beijing Automotive Group Co., Ltd., as an executive director of Beijing Automotive New Energy Vehicle Co., Ltd., and as the executive vice president of Beijing Automotive Research Institute. Prior to that, he was a part-time professor at Beijing University of Technology, Beijing University of Aeronautics and Astronautics, Institute of Electrical Engineering at China Academy of Sciences, Shanghai Jiaotong University, and Hunan University. He was appointed as the dean of Automotive Engineering at Jilin University of Technology in 1996 and remained in that position until 2000.

Jerry Lewin was appointed as a director of the Company in November 2010. Jerry Lewin became Senior Vice President of Field Profitability Globally of Hyatt Hotels Corporation in January of 2015. In his new responsibilities he and his team are to move the company forward with new initiatives to be the best operator in the Hospitality Industry. Prior to this promotion, he served as Senior Vice President of Field Operations for Hyatt Hotels Corporation and is responsible for managing the hotels in North American continent. Mr. Lewin has been with Hyatt since 1987. In his past capacity as Senior Vice President of Operation Lewin supervised a number of areas, including finance, sales and marketing, public relations, customer service, engineering, and human resources. Lewin serves as a member of the Hyatt Hotels Corporation’s Managing Committee and sits on the board of directors of the New York City Hotel Association. Since July 2009, Mr. Lewin has served as a director of several companies in the past. Lewin currently serves as the President of the New York Law Enforcement Foundation and as the President of the NY State Troopers PBA Signal 30 Fund. Mr. Lewin has served in various management capacities for several hotel companies in San Francisco, Oakland, Los Angeles, San Diego and Las Vegas. Mr. Lewin received his Bachelor of Science degree from Cornell University and completed the Executive Development Program at J.L. Kellogg Graduate School of Management at Northwestern University.

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Henry Yu was appointed as a director of the Company on July 1, 2011. In October of 2015, Henry joined Asian Investors Consortium as an Executive Director. Asian Investors Consortium of Asia invests in projects in Greater China and in Asia Pacific. Henry is also a Senior Advisor to ChinaPlus Capital Ltd of Shanghai, a company that focuses on bridging US/China business. Yu, a seasoned banker of about 34 years, has had an excellent banking career covering domestic banking and global business. He was Managing Director of the Global Financial Institutions of Fifth Third Bank from 2012-September of 2015. Previous affiliation included Bank of America in HK, Comerica Bank, National City Bank, SunTrust Bank, Standard Chartered Bank China, and East West Bank. Henry is a well-rounded banker having been involved in Investment Banking, Commercial and International Multinational Lending, Treasury Management, Credit Administration, Compliance, Foreign bank relationship management, Trade Finance, and Global Supply Chain. From 2003 through 2007, Yu held Series 7 and 62 Certification from the Financial Industry Regulatory Authority. Henry Yu is also an avid volunteer promoting U.S./China and U.S./Emerging Markets business relationships and transactions. Through Henry’s 25 plus years of coverage on Emerging Markets, Asia, and in particular Greater China, he is a frequent speaker and lecturer on Asian/U.S./China business to universities in Georgia (Emory University, Georgia Tech, Georgia State University, Kennesaw State University, Georgia Perimeter College), and universities in China, namely Sichuan University, Suzhou Institute, Jiliang University, and Jinan University. Henry chairs the Advisory Board of the National Association of Chinese-Americans, and is a member of the Global Commerce Council of the Metro Atlanta Chamber. A believer in education and mentorship, Henry sits on the Asian Studies Board of Kennesaw State University, a member of Georgia State University’s China Task Force, and Trustee of Georgia Perimeter College’s Foundation Board. Henry is also President of the Hong Kong Association of Atlanta, and works closely with the NYC Office of the HK Economic & Trade Office in NYC. Henry received his BA degree in Economics in 1978 from the University of Michigan and MBA in Finance from the University of Detroit in 1980.

Chen Liming was appointed as a director of the Company on May 1, 2012. Mr. Chen serves as an advisor to AA Wind & Solar Energy Development Group, LLC. Prior to his current position, from February 2009 to October 2010, Mr. Chen participated in a joint venture with Mr. Qiu Youmin, the former designer of Geely Automobile Co., Ltd., and assisted in the development of super mini three seat pure electric vehicles. From June 2008 to July 2009, he participated in the development of Lithium Iron Phosphate Battery with Shanghai Yuankai Group. Mr. Chen served as a Professor of Electrical Engineering at Zhejiang University from 1983 to 1997. In addition, Mr. Chen served as a visiting scholar in the Electrical Engineering Department at Columbia University in New York City from 1981 to 1983 and as a professor in Electrical Engineering at Zhejiang University from 1960 to 1981. Mr. Chen received his bachelor degree from Southeast University in Jiangsu, China in 1960.

Family Relationships

No family relationships existed among any of our directors or executive officers.

Board Diversity

The Nominating and Corporate Governance Committee does not have a formal policy with respect to diversity. However, the Board of Directors and the Nominating and Corporate Governance Committee believe that it is essential that the members of the Board of Directors represent diverse viewpoints. In considering candidates for the Board of Directors, the Board of Directors and the Nominating and Corporate Governance Committee consider the entirety of each candidate’s credentials in the context of the factors mentioned above. The Company is currently in compliance with the diversity requirements of Nasdaq Rule 5605(f) and 5606, with one female Asian directors, five male Asian director and one male White director.

Board Diversity Matrix (As of March 10, 2024) 

Total Number of Directors	7
	Female		Male		Non-Binary		Did Not Disclose Gender
Part I: Gender Identity
Directors		1		6		0		0
Part II: Demographic Background
African American or Black		0		0		0		0
Alaskan Native or Native American		0		0		0		0
Asian		1		5		0		0
Hispanic or Latinx		0		0		0		0
Native Hawaiian or Pacific Islander		0		0		0		0
White		0		1		0		0
Two or More Races or Ethnicities		0		0		0		0
LGBTQ+						0
Did Not Disclose Demographic Background						0

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Audit Committee Financial Expert

Our Audit Committee currently consists of Henry Yu (Chairman), Jerry Lewin and Chen Liming, each of whom is independent under NASDAQ listing standards. Our Board of Directors determined that each of Mr. Yu and Mr. Lewin qualifies as an “audit committee financial expert,” as defined by Item 407 of Regulation S-K and NASDAQ Rule 5605(a)(2). In reaching this determination, the Board of Directors made a qualitative assessment of Mr. Yu’s and Mr. Lewin’s level of knowledge and experience based on a number of factors, including formal education and business experience.

Code of Ethics

We have adopted a “Code of Ethics” as defined by regulations promulgated under the Securities Act of 1933, as amended, and the Exchange Act that applies to all of our directors and employees, including our principal executive officer, principal financial officer and principal accounting officer. A current copy of our “Code of Business Conduct and Ethics” is included as exhibit 14.1 to our annual report on Form 10-K filed on March 16, 2015. A copy of our “Code of Business Conduct and Ethics” will be provided to you without charge upon written request to Dong Xueqin, Chief Executive Officer, Kandi Technologies Group, Inc., Jinhua City Industrial Zone, Jinhua, Zhejiang Province, People’s Republic of China, 321016. You may also access these filings at our web site under the investor relations link at http://en.kandivehicle.com

Section 16(A) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires that the Company’s directors and executive officers and persons who beneficially own more than ten percent (10%) of a registered class of its equity securities, file with the SEC reports of ownership and changes in ownership of its common stock and other equity securities. Executive officers, directors, and beneficial owners of greater than ten percent (10%) of a registered class of the Company’s equity securities are required by SEC regulation to furnish the Company with copies of all Section 16(a) reports that they file. Based solely upon a review of the copies of such reports furnished to us or written representations that no other reports were required, the Company believes that, during fiscal year 2023, all filing requirements applicable to its executive officers, directors, and greater than ten percent (10%) beneficial owners were met, except for the following: (i) Hu Xiaoming, Wang Lin and Dong Xueqin did not timely file there Form 4s after being granted 50,000, 2,000 and 20,000 shares on June 15, 2023, respectively, their Form 4s have been filed on July 13, 2023; (ii) Henry Yu did not timely file Form 4s after being granted 5,000 shares and 5,000 shares on February 2, 2023 August 1, 2023. (iii) Jerry Lewin did not timely file Form 4s after being granted 5,000 shares and 5,000 shares on February 2, 2023 and August 1, 2023.

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Item 11. Executive Compensation

Summary Compensation Table

The following table summarizes the compensation earned during the years ended December 31, 2023 and 2022, by the individuals who served as our Chief Executive Officer and Chief Financial Officer during any part of fiscal year 2023 or any other executive officer with total compensation in excess of $100,000 during fiscal year 2023. The individuals listed in the table below are referred to as the “named executive officers”.

		Salary		Bonus		Stock Awards		Option Awards		Non-Equity Incentive Plan Compensation		Nonqualified Deferred Compensation Earnings		All Other Compensation		Total
Name and Principal Position	Year	($)		($)		($)(4)		($)		($)		($)		($)		($)
Hu Xiaoming (1)	2023	$	51,522		-	$	156,500		-		-		-		-	$	208,022
Chairman of the Board	2022	$	53,505		-	$	122,500		-		-		-		-	$	176,005
Dong Xueqin (2)
CEO and President	2023	$	70,694		-	$	59,600		-		-		-		-	$	130,294
Lim Jehn Ming (3)	2023	$	120,000		-	$	26,870		-		-		-		-	$	146,870
CFO	2022	$	120,000		-	$	18,540		-		-		-		-	$	138,540

(1)	Mr. Hu was appointed as CEO and President of the Company on June 29, 2007. He resigned to be CEO and President of the Company effective January 9, 2023.
(2)	Dr. Dong Xueqin has been appointed to be the Chief Executive Officer of the Company effective January 10, 2023. He has served as a director of the Company since December 2021.
(3)	Mr. Lim was appointed as the Company’s CFO, effective May 15, 2020.
(4)	The amounts in this column reflect the aggregate grant date fair value under FASB ASC Topic 718 of awards made during the respective year.

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Salary and Incentive Compensation

In fiscal 2023, the primary components of our executive compensation programs were base salary and equity compensation.

Salary

We use base salary to fairly and competitively compensate our executives, including the named executive officers, for the jobs we ask them to perform. We view base salary as the most stable component of our executive compensation program, as this amount is not at risk. We believe that the base salaries of our executives should be targeted at or above the median of base salaries for executives in similar positions with similar responsibilities at comparable companies, consistent with our compensation philosophy. At the end of the year, each executive’s performance is evaluated by our Compensation Committee, which takes into account the individual’s performance, responsibilities of the position, adherence to our core values, experience, and external market conditions and practices.

Incentive Compensation

We believe it is a customary and competitive practice to include an equity-based element of compensation to the overall compensation package for our named executive officers. We believe that a significant portion of the compensation paid to our named executive officers should be performance -based and therefore at risk. Awards made are granted under the Kandi Technologies Group, Inc. Omnibus Long-Term Incentive Plan (the “Plan”).

At our 2008 annual shareholders meeting, our stockholders approved the adoption of the Plan.

Pursuant to Pre-Approved Award Grant Sub-Plan approved by the Board of Directors on December 30, 2013 and modified on July 25, 2014, if the Non-GAAP net income in one year increases by 10% compared with the previous year, the total of 335,000 shares of the common stock from the Plan (as disclosed in details in the next paragraph below) to be granted to certain employees (management of the Company is authorized to determine list of employees and stock amount rewarded based on position adjustment of employees, performance and tenure of each employee in that year) will be granted for that year; if the Non-GAAP net income in one year is less than the Non-GAAP net income in the previous year, then no stock will be granted in that year; if the Non-GAAP net income in one year is 10% less than or 10% more than the Non-GAAP net income in the previous year, then the stock grant amount will decrease or increase according to the Non-GAAP net income decrease or increase percentage, but the total amount rewarded may not be over 200%.

On May 20, 2015, the shareholders of the Company approved an increase of 9,000,000 shares under the Plan at its annual meeting. The fair value of each award granted under the Plan is determined based upon the closing price of the Company’s stock on the date of the grant. To the extent that the performance goal is not met and so no shares become due, no compensation cost is recognized and any recognized compensation cost during the applicable year is reversed. The number of shares of common stock granted under the Plan with respect to fiscal 2014 was 670,000 shares based on the Non-GAAP Net Income of 2014. Compensation expense is recognized in General and Administrative Expenses. On April 23, 2015 and June 7, 2015, the Company granted 550,000 shares and 120,000 shares, respectively, to the senior management and key employee as year 2014 performance awards. On April 13, 2016, the Company granted 670,000 shares to the senior management and key employee as year 2015 performance awards. In February 2017, the Board of Directors authorized the Company to grant 246,900 shares to a list of management members as compensation for their past services pursuant to Section 11 of the Company’s 2008 plan. On September 26, 2016, the Board approved the termination of the previous Board’s Pre-Approved Award Grant Sub-Plan under the 2008 Plan and adopted a new plan to reduce the total number of shares of common stock of the stock award for select executives and key employees from 335,000 shares of common stock to 250,000 shares of common stock for each fiscal year and the other terms were as same as before. There was no grant under the Board’s Pre-Approved Award Grant Sub-Plan in the years of 2017 to 2021.

On May 29, 2015, the Compensation Committee of the Board of Directors of the Company approved the grant of stock options to purchase 4,900,000 shares of common stock at an exercise price of $9.72 per share to the Company’s senior executives. The stock options will vest ratably over three years and expire on the tenth anniversary of the grant date. As of December 31, 2023, 3,000,000 shares have been exercised, and 1,000,000 shares have been forfeited.

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On September 7, 2022, the Compensation Committee of the Board of Directors of the Company approved the grant of stock options to purchase 5,000,000 shares of the Company’s common stock, at an exercise price of $2.07 per share, to the Company’s senior employees. The stock options will vest ratably over three years on October 7, 2023, October 7, 2024 and October 7, 2025, respectively, and expire on the tenth anniversary of the grant date. As of December 31, 2023, 1,666,661 shares have been exercised.

On July 1, 2023, the Compensation Committee of the Board of Directors of the Company approved the grant of stock options to purchase 68,019 shares of the Company’s common stock, at an exercise price of $3.96 per share, to the Company’s employees. The stock options will vest ratably over three years on July 1, 2024, July 1, 2025 and July 1, 2026, respectively, and expire on the tenth anniversary of the grant date.

The granted stock option to the directors and officers are as below:

Name	stock options
Hu Xiaoming		900,000

Outstanding Equity Awards at 2023 Fiscal Year End

The following table sets forth information regarding all unexercised, outstanding equity awards held, as of December 31, 2023, by those individuals who served as our named executive officers during any part of fiscal year 2023.

Name	Number of Securities underlying Unexercised Exercisable		Number of Securities underlying Unexercised Options(#) Unexercisable		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)		Option Exercise Price ($)(1)		Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested (#)		Market Value of Shares or Units of Stock That Have Not Vested ($)		Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)		Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
Hu Xiaoming	$	900,000	$	-	$	-	$	9.72	5/28/2025	$	-	$	-	$	-	$	-

(1) The grant date fair value of each share of common stock option is $9.72, calculated in accordance with FASB Topic 718.

Employment Agreements

Zhejiang Kandi Technologies has a five-year-term employment agreement with Mr. Hu, expiring June 9, 2028. The agreement provides an annual salary for Mr. Hu with bonuses to be decided at the discretion of our Board at the year end. Such employment agreement is filed as Exhibit 10.2 herein.

On May 15, 2023, the Company and Mr. Lim entered into a three-year-term employment agreement, pursuant to which Mr. Lim shall receive an annual salary in the amount of $120,000. He will also receive 10,000 shares of the common stock under the Company’s 2008 Omnibus Long-Term Incentive Plan, which shall be issuable evenly on each six-month anniversary hereof or as otherwise determined by the Board of Directors. Such employment agreement is filed as Exhibit 10.31 herein.

On January 10, 2023, the Company and Dr. Dong entered into a three-year-term employment agreement, pursuant to which Dr. Dong shall receive an annual salary in the amount of RMB500,000 (approximately $70,000). He will also receive 20,000 shares of the common stock under the Company’s 2008 Omnibus Long-Term Incentive Plan. Such employment agreement is filed as Exhibit 10.30 herein.

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Potential Payments Upon Termination or Change of Control

Under Chinese law, we may only terminate employment agreements without cause and without penalty by providing notice of non-renewal one month prior to the date on which the employment agreement is scheduled to expire. If we fail to provide this notice or if we wish to terminate an employment agreement in the absence of cause, as defined in the agreement, then we are obligated to pay the employee one month’s salary for each year we have employed the employee. We are, however, permitted to terminate an employee for cause without penalty pursuant to the employee’s employment agreement. If the named executive officer is not terminated for cause, the Company will pay the remaining portion of the executive officer’s salary.

Director Compensation (excluding Named Executive Officers)

The following table sets forth certain information regarding the compensation earned by or awarded during the 2023 fiscal year to each of our non-executive directors:

Name	Fees Earned or Paid in Cash ($)(2)		Stock Awards ($)(1)(2)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings		All Other Compensation ($)		Total ($)
Lin Yi	$	8,483		-		-		-		-		-	$	8,483
Henry Yu	$	24,000		18,100		-		-		-		-	$	42,100
Jerry Lewin	$	24,000		26,500		-		-		-		-	$	50,500
Chen Liming	$	8,483		-		-		-		-		-	$	8,483
Wang Lin	$	32,519		6,260		-		-		-		-	$	38,779
Dong Xueqin	$	57,969		59,600		-		-		-		-	$	117,569

(1)

The amounts in these columns represent the aggregate grant date fair value of stock awards granted to our non-named executive officer directors during the fiscal year ended December 31, 2023, in accordance with ASC Topic 718. In connection with his appointment to the Board of Directors in July 2011, the Board of Directors authorized the Company to issue to Mr. Yu 5,000 shares of Company’s restricted common stock every six months, par value $0.001. The closing stock price at the grant date is $1.81 per share. Similarly, in August 2011, the Board of Directors authorized the Company to issue to Mr. Lewin 5,000 shares of Company’s restricted common stock every six months, par value $0.001. The closing stock price at the grant date is $2.65 per share. As of December 31, 2023, 120,000 shares of restricted common stock had been issued to Mr. Lewin and Mr. Yu, respectively.

(2)

In setting director compensation, we consider the significant amount of time that directors spend fulfilling their duties to the Company, as well as the skill level required to serve as a director and manage the affairs of the Company. Certain directors receive a monthly fee as follows: (i) Lin Yi receives a monthly fee of RMB5,000 (approximately $740) starting May 2017; (ii) Jerry Lewin receives a monthly fee of $2,000; (iii) Henry Yu receives a monthly fee of $2,000; and (iv) Chen Liming receives a monthly fee of RMB 5,000 (approximately $740) starting 2014.

The aggregate number of stock options and restricted shares outstanding, as of December 31, 2023, for each of the non-named executive officer directors were as follows:

Name	Options		Restricted  stock
Henry Yu		0		120,000	(1)
Chen Liming		0		0
Lin Yi		0		0
Jerry Lewin		0		120,000
Wang Lin		0		0
Dong Xueqin		0		0

(1) Besides the 120,000 shares of restricted common stock, Mr. Yu owns additional 23,510 shares of the Company’s common stock that he purchased from the open market.

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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth information known to us, as of March 8, 2024, relating to the beneficial ownership of shares of common stock by each person who is known by us to be the beneficial owner of more than five percent (5%) of the outstanding shares of common stock; each director; each executive officer; and all executive officers and directors as a group. We believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock shown as being owned by them. The applicable percentages of ownership are based on an aggregate of 87,358,234 shares of our Common Stock outstanding on March 8, 2024. Unless indicated otherwise, the mailing address of each beneficial owner is Jinhua New Energy Vehicle Town, Jinhua City, Zhejiang Province, China 321016.

Title of Class	Name of Beneficial Owner	Amount and Nature of Beneficial Ownership			Percent of Class
Named Executive Officers and Directors
Common Stock	Hu Xiaoming		14,426,481	(1)		16.51	%
Common Stock	Jehn Ming Lim		1,500			*
Common Stock	Henry Yu		148,510			*
Common Stock	Jerry Lewin		125,000			*
Common Stock	Chen Liming		-			-
Common Stock	Lin Yi		-			-
Common Stock	Dong Xueqin		20,000			-
Common Stock	Wang Lin		11,000			*
All officers and directors			14,732,491			16.86	%
Other 5% Stockholders:
Common Stock	Excelvantage Group Limited(3)		12,821,404	(2)		14.68	%

* Less than 1%

(1) Includes (i) 1,605,077 shares owned directly by Mr. Hu, (ii) 12,821,404 shares owned by Excelvantage Group Limited. As reflected in footnote 2, Mr. Hu may be deemed to be the beneficial owner of these shares.

(2)

On March 29, 2010, Hu Xiaoming, our Chairman of the Board of Directors, previous Chief Executive Officer, and President, became the sole stockholder of Excelvantage Group Limited. Through his position as the sole stockholder in Excelvantage Group Limited, Mr. Hu has the power to dispose of or direct the disposition of the shares of the common stock in Excelvantage Limited Group. As a result, Mr. Hu may, under the rules of the Securities and Exchange Commission, be deemed to be the beneficial owner of the shares of common stock.

(3)

Based solely on the Schedule 13G filed by Invesco Ltd filed with the SEC on February 10, 2022.

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Item 13. Certain Relationships and Related Transactions, and Director Independence.

Transactions with Related Parties

Effective March 14, 2022, Mr. Hu Xiaoming transferred his 50% equity interests of Kandi New Energy to Zhejiang Kandi Technologies for $2.83 million (RMB 18 million, equal to the subscribed capital contributed by Mr. Hu Xiaoming to Kandi New Energy) according to the Share Transfer Agreement signed on March 7, 2022 between Zhejiang Kandi Technologies and Mr. Hu Xiaoming. As a result, Kandi New Energy has become a wholly-owned subsidiary of Zhejiang Kandi Technologies. Upon the closing of the transfer, all the pre-existing agreements between the Company and Mr. Hu Xiaoming regarding the entitlement of 100% of the economic benefits, voting rights and residual interests are all terminated.

Procedures For Approval of Related Party Transactions

According to the Company policy on Related-Party Transactions (the “Policy”), a “Related Transaction” is “any transaction, includes, but not limited to, any financial transaction, arrangement, relationship (including any indebtedness or guarantee of indebtedness) or any series of similar transactions, arrangements or relationships, since the beginning of the Company’s last fiscal year, or any currently proposed transaction, and the amount involved exceeds $120,000, and in which any related party had or will have a direct or indirect material interest”. The Policy’s definition of a “Related Party” is in line with the definition set forth in the instructions to Item 404(a) of Regulation S-K promulgated by the SEC.

Under the Policy, the Company’s proposed material related transaction with related persons shall be submitted to the Board for consideration and discussion after an independent director presents his/her approval opinion beforehand. The Audit Committee shall conduct an audit on the related-party transaction and prepare a written opinion, and can engage independent financial advisers to issue a report as a basis for its judgment, then submit it to the Board. The Policy states that the Board meeting can be held as long as non-affiliated directors making up a majority of the Board attend, and any resolution made by the Board must be approved by a majority of non-affiliated directors.

Director Independence

Messrs. Henry Yu, Chen Liming, Lin Yi and Jerry Lewin are all non-employee directors, all of whom our Board has determined to be independent pursuant to NASDAQ rules. All of the members of our Audit Committee, Nominating/Corporate Governance Committee and Compensation Committee are independent pursuant to NASDAQ rules.

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Item 14. Principal Accounting Fees and Services.

The following table represents the aggregate fees from our current and previous principal accounting firm, ARK Pro CPA & Co and Kreit & Chiu CPA LLP for the years ended December 31, 2023 and 2022, respectively.

	2023		2022
Audit Fees	$	360,000	$	410,000
Audit Related Fees	$	-	$	-
Tax Fees	$	-	$	-
All other fees	$	89,071	$	5,600
TOTAL FEES	$	449,071	$	415,600

Audit Fees — This category includes the audit of our annual financial statements and services that are normally provided by the independent auditors in connection with engagements for those fiscal years.

Audit-Related Fees — This category consists of assurance and related services by the independent auditors that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees”.

Tax Fees — This category consists of professional services rendered by the Company’s independent registered public accounting firm for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice.

All Other Fees — This category consists of fees for other miscellaneous items.

Pre-Approval Policies and Procedures

All of the services rendered to us by our independent registered public accountants were pre-approved by the Audit Committee.

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PART IV

Item 15. Exhibits, Financial Statement Schedules.

Exhibit Number	Description
2.1	Share Exchange Agreement, dated June 29, 2007, by and among Stone Mountain Resources, Inc., Continental Development Limited and Excelvantage Group Limited. [Incorporated by reference from Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on July 6, 2007]
3.1	Certificate of Incorporation. [Incorporated by reference from Exhibit 3.1 to Form SB-2 filed by the Company on April 1, 2005]
3.2	Certificate For Renewal and Revival of Charter dated May 27, 2007. [Incorporated by reference from Exhibit 3.2 to the Company’s Registration Statement on Form S-3 dated June 20, 2014]
3.3	Certificate of Amendment of Certificate of Incorporation. [Incorporated by reference from Exhibit 4.2 to the Company’s Form S-3, dated November 19, 2009; File No. 333-163222]
3.4	Certificate of Amendment of Certificate of Incorporation. [Incorporated by reference from Exhibit 3.1 to the Company’s Form 8-K, dated December 21, 2012]
3.5	Bylaws. [Incorporated by reference from Exhibit 3.2 to Form SB-2 filed by the Company on April 1, 2005]
4.1	Description of Securities Registered Pursuant to Section 12 of the Exchange Act. [Incorporated by reference from Exhibit 4.5 to the Company’s Annual Report on Form 10-K filed on March 15, 2022]
10.1	Form of the Director Agreement [Incorporated by reference from Exhibit 10.1 to the Company’s Annual Report on Form 10-K filed on March 16, 2015]
10.2	Employment Agreement by and between the Company and Hu Xiaoming †
10.3	Kandi Technologies, Corp. 2008 Omnibus Long-Term Incentive Plan [Incorporated by reference from Appendix A to the Company’s Definitive Schedule 14A filed on November 24, 2008]

10.4	Amendment No. 1 to Kandi Technologies, Corp. 2008 Omnibus Long-Term Incentive Plan [Incorporated by reference from Exhibit A to the Company’s Definitive Schedule 14A filed on April 10, 2015]
10.5	Amendment No. 2 to Kandi Technologies, Corp. 2008 Omnibus Long-Term Incentive Plan [Incorporated by reference from Appendix A to the Company’s Definitive Schedule 14A filed on November 16, 2018]

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10.6	English Translation of the Share Transfer Agreement by and between Zhejiang Kandi Technologies Group Co., Ltd. and Mr. Wang Xinhuo dated December 12, 2017 [Incorporated by reference from Exhibit 10.18 to the Company’s Annual Report on Form 10-K filed on March 16, 2018]
10.7	English Translation of the Supplementary Agreement by and between Zhejiang Kandi Technologies Group Co., Ltd. and Mr. Wang Xinhuo dated December 12, 2017 [Incorporated by reference from Exhibit 10.19 to the Company’s Annual Report on Form 10-K filed on March 16, 2018]
10.8	Membership Interest Transfer Agreement of Sportsman Country, LLC by and between David Shan, Johnny Tai and Kandi Technologies Group, Inc. dated May 31, 2017 (Bilingual) [Incorporated by reference from Exhibit 10.15 to the Company’s Annual Report on Form 10-K filed on March 15, 2019]
10.9	Equity Transfer Agreement by and between Zhejiang Kandi Technologies Group Co., Ltd. and Geely Technology Group Co., Ltd., dated March 21, 2019 [Incorporated by reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on May 10, 2019]
10.10	English translation of the land repurchase agreement for the Jinhua premise, dated as of March 10, 2020, by and between Zhejiang Kandi Technologies Group Co., Ltd. and Administrative Committee of Jinhua Economic and Technological Development Zone.* [Incorporated by reference from Exhibit 10.16 to the Company’s Annual Report on Form 10-K filed on April 28, 2020]
10.11	Employment Agreement by and between the Company and Jehn Ming Lim dated as of May 15, 2020 [Incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 21, 2020]
10.12	Form of Securities Purchase Agreement in connection with the Registered Direct offering closed on November 12, 2020 [Incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 10, 2020]
10.13	Placement Agent Agreement in connection with the Registered Direct offering closed on November 12, 2020 [Incorporated by reference from Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 10, 2020]
10.14	Form of Securities Purchase Agreement in connection with the Registered Direct offering closed on November 23, 2020 [Incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 20, 2020]
10.15	Placement Agent Agreement in connection with the Registered Direct offering closed on November 23, 2020 [Incorporated by reference from Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 20, 2020]
10.16	Equity Transfer Agreement by and between Zhejiang Kandi Technologies Group Co., Ltd. and Geely Technology Group Co., Ltd., dated February 18, 2021. [Incorporated by reference from Exhibit 10.22 to the Company’s Annual Report on Form 10-K filed on March 30, 2021]

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10.17	English Translated Version of the Transfer Agreement Between Mr. Hu and Zhejiang Kandi Technologies Group Co., Ltd. Regarding the 50% Equity Interests Transfer in the VIE Dated March 7, 2022. [Incorporated by reference from Exhibit 10.23 to the Company’s Annual Report on Form 10-K filed on March 15, 2022]
10.18	English Translation of the Share Transfer Agreement by and between Zhejiang Kandi Technologies Group Co., Ltd. and Shareholders of Jiangxi Province Huiyi New Energy Co., Ltd. dated July 13, 2021. [Incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 19, 2021]
10.19	English Translation of the Supplementary Agreement by and between Zhejiang Kandi Technologies Group Co., Ltd. and Shareholders of Jiangxi Province Huiyi New Energy Co., Ltd. dated July 13, 2021. [Incorporated by reference from Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on July 19, 2021]
10.20	English Translation of the Equity Incentive Agreement by and among the Company and certain receiving parties, dated March 13, 2023. [Incorporated by reference from Exhibit 10.26 to the Company’s Annual Report on Form 10-K filed on March 16, 2023]
10.21	Equity Transfer Agreement by and between SC Autosports, LLC and Olen Rice. [Incorporated by reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on August 8, 2023]
10.22	English Translation of the Agreement on Termination of the Make Good Shares by and between Zhejiang Kandi Technologies Group Co., Ltd and the Former Shareholders of Jiangxi Province Huiyi New Energy Co., Ltd dated August 3, 2023. [Incorporated by reference from Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on August 8, 2023]
10.23	Supplementary Agreement to Equity Incentive Agreement on Project of Crossover Golf Carts by and between Kandi Technologies Group, Inc. and Project Management Team of Kandi Electric Vehicles (Hainan) Co., Ltd. [Incorporated by reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on November 8, 2023]
10.24	Employment Agreement between the Company and Dong Xueqin. †
10.25	Employment Agreement between the Company and Jehn Ming Lim †
10.26	Supplementary Agreement to the Equity Transfer Agreement of Northern Group, Inc. by and between SC Autosports, LLC And Olen Rice †
14.1	Code of Business Conduct and Ethics. [Incorporated by reference from Exhibit 14.1 to the Company’s Annual Report on Form 10-K filed on March 16, 2015]
21.1	List of Subsidiaries †
23.1	Consent of ARK Pro CPA & Co. †
31.1	Certification of CEO pursuant to Rule 13a-14 under the Securities Exchange Act of 1934. †
31.2	Certification of CFO pursuant to Rule 13a-14 under the Securities Exchange Act of 1934. †
32.1	Certifications of CEO and CFO pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. †
97.1	Compensation Recovery Policy of Kandi Technologies Group, Inc. †
101.INS	Inline XBRL Instance Document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

† Exhibits filed herewith.

* Certain portion of the exhibit has been omitted in accordance with the provisions of Item 601(b)(2)(ii) of Regulation S-K.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	KANDI TECHNOLOGIES GROUP, INC.
March 14, 2024	By:	/s/ Dong Xueqin
		Dong Xueqin
		President and Chief Executive Officer

Pursuant to the requirements of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Dong Xueqin	President and Chief Executive Officer	March 14, 2024
Dong Xueqin	(Principal Executive Officer) & Director
/s/ Jehn Ming Lim	Chief Financial Officer	March 14, 2024
Jehn Ming Lim	(Principal Financial Officer and
	Principal Accounting Officer)
/s/ Hu Xiaoming	Chairman of the Board	March 14, 2024
Hu Xiaoming
/s/ Chen Liming	Director	March 14, 2024
Chen Liming
/s/ Lin Yi	Director	March 14, 2024
Lin Yi
/s/ Jerry Lewin	Director	March 14, 2024
Jerry Lewin
/s/ Henry Yu	Director	March 14, 2024
Henry Yu
/s/ Wang Lin	Director	March 14, 2024
Wang Lin

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EX-10.2

Exhibit 10.2

Zhejiang Kandi Technologies Group Co., Ltd.

Labor Contract

Party A: Zhejiang Kandi Technologies Group Co., Ltd.

Address: New Energy Vehicle Town, Jinhua City, Zhejiang Province, China

Party B: __Hu Xiaoming________________________
ID No. ___________________________________________

Party A and Party B make this contract on the principle of voluntaries and equality through mutual negotiation in accordance with Labor Law of the People’s Republic of China and other relevant prescriptions.

1. Term of labor contract

The term of contract shall be five year(s) from this 10^th day of June, 2023 to this 9^th day of June, 2028.

2. Scope of work

Party B agrees to work at the post of Chairman of the Company and shall fulfill the task assigned for the post. If required by work, Party B agrees to change the post.

3. Work condition and labor protection

Party A shall set up regulation on production safety and labor protection, and provide Party B with labor protection articles.

Party B shall work in according with the safety operating procedure to ensure safety production. If Party B does not operate according to the standard operating procedure set by Party A, Party B shall make compensation for the economical losses caused to Party A.

4. Labor discipline

Party B shall comply with the regulation that is set up by Part A in accordance with the Law and shall obey the management of Party A. If Party B breaches the regulation, Party A may give appropriate punishment to Party B in accordance with the regulations.

5. Labor compensation

Labor compensation is executed according to Method One.

Method One: the labor compensation is made by Party A based on the rule of distribution according to work. Party B’ s labor compensation is made in accordance with the compensation regulation and method set by Party A

Method Two: Annual wage system. Annual wage is RMB ____yuan, which is pre-tax wage. At the end of each year, the amount and payment manner of bonus,based on the the Company’s performance,shall be determined by the Board of directors. The annual wage includes all the wage subsidies and over time payment.

6. Social insurance and welfare benefits

Social insurance and welfare benefits shall be subject to Party A's regulations.

7. Change and cancellation of contract.

(1) If circumstances change, such as Party A adjusts production or production projects, the two parties can change the content of labor contract by consensus.

(2) During the term of contract, each of the two parties can terminate the contract under the circumstances according to the prescriptions of Labor Law upon thirty days’ prior written notice to the other party.

(3) Party B has any of the following circumstances, Party A may terminate the contract at any time:

① Party B breaches the working regulation or operating procedure causing an accident, or has dereliction of duty causing serious consequences;

② Party B seriously breaches work order resulting in unmoral work of Party A;

③ Party B seriously breaches the regulations or labor discipline of Party A;

④ Party B is sentenced to detention or imprisonment or penalty suspended or re-education through labor.

8. Termination of contract

(1) Under any of the following circumstances, the contract shall be terminated.

① The contract will be terminated at the expiration date. If any party requests for renewal of the contract, it shall notify the other party. The procedures for renewal of the contract can be made upon mutual consensus of the two parties

② Retirement or quit of Party B shall comply with relevant national regulations.

(2) After the termination of the contract, Party A shall provide Party B with Certification of Termination of Labor Contract, and follow relevant procedures.

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9. Breach Liabilities

(1)	The contract shall come into effect once being signed and shall be performed strictly by both parties.
(2)	Should any party breach the contract, the liable party shall bear the legal responsibility, and make compensation for economic losses caused to the other party in view of the result and its liability.
(3)	If Party B leaves his post without permission, and cause the termination of the contract, and caused direct economic losses to Party A, Party B shall make compensation according to the losses. If the economic losses are immeasurable, t Party B shall make compensation equal to the amount of his one month’s salary per year.

10. Others

11. Any dispute arising out of performance of the contract may be settled by negotiation of the two parties, otherwise shall be settled according to laws.

12. The contract is made in quadruplicate, with two copies held by Party A, one held by Party B and one shall be filed in supervision authority.

13. Special Agreement: This Contract shall come into force after being signed by both parties and signed and sealed by the Legal Department of Kandi Group.

Party A:	Party B: Hu Xiaoming
Zhejiang Kandi Technologies Group Co., Ltd
/s/ Seal Affixed	/s/ Hu Xiaoming
Date: May 31, 2023

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EX-10.24

Exhibit 10.24

EMPLOYMENT AGREEMENT

雇佣协议

This EMPLOYMENT AGREEMENT (this “Agreement”) is dated as of January 10, 2023 and by and between KANDI TECHNOLOGIES GROUP, INC. (the “Company”or “Party A”) and Dong Xueqing (“Party B”).

2023年1月10日，特拉华州的康迪科技集团（下称“公司”或“甲方”）与董学勤（下称“乙方”）签署本雇佣协议。

WHEREAS, Party A desires to employ Party B as its Chief Executive Officer (CEO) on the terms and conditions as set forth hereinafter, and Party B desires to be so employed;

鉴于， 甲方愿意根据以下条款雇佣乙方为康迪科技集团有限公司首席执行官(CEO), 乙方愿意接受该聘用。

NOW, THEREFORE, IN CONSIDERATION of the foregoing facts, the mutual covenants and agreements contained herein and other good and valuable consideration, the parties hereby agree as follows:

因此，鉴于上述事实以及本协议包含的共同约定及其他良好和有价值的考虑，双方就以下方面达成一致意见：

1. Employment, Duties and Acceptance.

雇佣，职责和承诺

1.1 Effective as of the date of this Agreement, Party A hereby agrees to employ Party B as its CEO to be responsible and plan for the public company’s work, and Party B hereby accepts such employment on the terms and conditions contained in this Agreement.  During the term of this Agreement, Party B shall make himself available to Party A and to any of its subsidiaries or affiliates as directed to pursue the business of Party A, subject to the supervision and direction of the Board of Directors.

自本协议生效之日起，甲方同意雇佣乙方为公司CEO全面负责和规划上市公司相关工作。根据本协议中的条款和条件，乙方愿意接受该聘用。在本协议期限内，在公司董事会的监督和指示下，乙方应按指示服务于甲方及甲方的子公司或联营公司，开展甲方的业务。

1.2 The Board of Directors of the Company may assign Party B such general management and supervisory responsibilities and executive duties for the Company as are appropriate and commensurate with Party B’s position as CEO of the Company.

公司董事会可指派乙方执行与其公司CEO的岗位相符合的综合管理和监督职责和行政职责。

1.3 Party B accepts such employment and agrees to devote all of his business time, energies and attention to the performance of his duties hereunder.

乙方接受聘用并同意将投入全部时间精力开展本职工作。

2. Compensation and Benefits

薪酬与福利

2.1 Party A shall pay to Party B a salary at an annual base rate of RMB500,000 for the term hereof. During Party B’s employment, salary will be paid monthly.

甲方应支付乙方人民币500,000的年薪。在雇佣期间乙方的工资将按月支付。

2.2 Party A shall issue to Party B an aggregate of 20,000 shares of its common stock annually.

甲方同意支付乙方每年合计20,000股的公司普通股。

3. Term and Termination.

期限和终止

3.1 The term of this Agreement commences as of the execution of the Agreement and shall continue for three (3) year unless sooner terminated as herein provided.

本协议期限自签订之日起有效期三年，除非提前终止本合同规定。

3.2 If Party B dies during the term of this Agreement, this Agreement shall thereupon terminate, except that Party A shall pay to the legal representative of Party B’s estate any accrued and unpaid base salary due to Party B pursuant to Section 2.1 hereof based on the days of service prior to the death and all amounts owing to Party B at the time of termination, including for previously accrued but unpaid expense reimbursements.

如果乙方在本协议期限内身亡，应立即终止本协议，但甲方应根据第2.1条规定按乙方身亡前的服务天数支付乙方继承人任何应得未付的基本工资及协议终止日应付乙方的所有金额，包括之前应计未付的报销费用。

3.3 Party A reserves the right to declare Party B in default of this Agreement if Party B materially breaches or habitually neglects the duties which he is required to perform under the terms of this Agreement, or if Party B commits such acts of dishonesty, fraud, misrepresentation, gross negligence or willful misconduct as would prevent the effective performance of his duties or which results in material harm to the Company or its business.  Party A may immediately terminate this Agreement for cause by giving written notice of termination to Party B.  Upon the date of delivery of the written notice of such termination, the obligations of Party B and the Company under this Agreement shall immediately cease. In the event of a termination pursuant to this section, Party B shall be entitled to receive any accrued and unpaid amounts earned pursuant to Section 2.1 hereof.  Party A shall also pay to Party B all amounts owing to Party B at the time of termination. 

如果乙方实质性违反或经常性疏忽履行根据本协议的条款规定的职责，或犯了不诚实，欺诈，虚假陈述，重大疏忽或故意不当行为，妨碍了工作有效进行并对公司及公司业务造成危害，公司有权终止协议。甲方可以立即有理由终止协议，但必须书面通知乙方终止协议。自书面通知送达之日，本协议下甲方和乙方的义务立即停止。如果根据本条款终止协议，乙方应有权获得按第2.1条规定的直到终止日期的任何应得未付的工资。甲方还应支付在协议终止日应付乙方的所有金额。

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3.4 Party B’s employment may be terminated at any time by Party B upon not less than thirty (30) days written notice by Party B to the Chairman of the Board.of Directors. Upon such termination the obligations of Executive and the Company under Sections 1 and 2 of this Agreement shall immediately cease.  In the event of a termination pursuant to this section, Party B shall be entitled to receive any accrued and unpaid amounts earned pursuant to Section 2.1 hereof.  Party A shall also pay to Party B all amounts owing to Party B at the time of termination.

乙方可以任何时间终止本协议，但必须至少提前三十（30）天的书面通知董事会主席。自书面通知送达之日，甲方和乙方间在本协议第一条和第二条下的义务即停止。如果根据本条款终止协议，乙方应有权获得按第2.1条规定的直到终止日期的任何应得未付的工资。甲方还应支付在协议终止日应付乙方的所有金额。

3.5 Company may terminate Party B’s employment upon not less than thirty (30) days written notice by Company to Party B. Upon the effective date as specified in such notice, the obligations of Party B and Party A under Sections 1 & 2 under this Agreement shall immediately cease.  In the event of a termination pursuant to this section, Party B shall be entitled to receive any accrued and unpaid amounts earned pursuant to Section 2.1 hereof based on the days of service prior to the termination and all amounts owing to Party B at the time of termination.

甲方可以终止本协议，但必须至少提前三十（30）天的书面通知乙方。自通知中所写的终止日起，本协议第1、2条下甲方和乙方的义务立即停止。如果协议终止，乙方应有权获得按第2.1条规定的直到终止日期的任何应得未付的工资以及协议终止日应付乙方的所有金额。

3.6 In the event of termination of Party B’s employment prior to the expiration of this Agreement, shares of the Company’s common stock owed to Party B pursuant to Section 2.2 that are vested as of the termination date shall be issued to Party B on the termination date.

如乙方在本协议期满前离职，在协议终止日甲方应发行给乙方按第2.2条规定的未付的应付乙方的普通股股份。

4. Confidential Information, Noncompetition and Cooperation.

保密信息、非竞争性和合作

4.1 Confidential Information. As used in this Agreement, “Confidential Information” means information belonging to the Company which is of value to the Company in the course of conducting its business and the disclosure of which could result in a competitive or other disadvantage to the Company. Confidential Information includes, without limitation, financial information, reports, and forecasts; inventions, improvements and other intellectual property; trade secrets; know-how; designs, processes or formulae; software; market or sales information or plans; customer lists; and business plans, prospects and opportunities (such as possible acquisitions or dispositions of businesses or facilities) which have been discussed or considered by the management of the Company. Confidential Information includes information developed by Party B in the course of Party B’s engagement by the Company, as well as other information to which Party B may have access in connection with Party B’s engagement. Confidential Information also includes the confidential information of others with which the Company has a business relationship. Notwithstanding the foregoing, Confidential Information does not include information in the public domain, unless in the public domain due to breach of Party B’s duties under Section 4.2

保密信息 本协议中的“保密信息”是指属于公司对公司业务开展有价值的信息，该信息的披露可能给公司造成竞争压力或其他不利影响。保密信息包括但不仅限于财务信息、财务报告和财务预测；发明、改进和其他知识产权、商业机密、专业技术；设计、工艺或配方；软件；营销信息或营销计划；客户名单；经公司管理层审议的经营规划、经营预期和机遇（企业或设施的潜在收购或处置）。保密信息还包括乙方在其受聘期间所形成的信息以及乙方因受聘CEO一职可能接触到的其他信息。保密信息还包括公司与之有业务关系的其他公司的保密信息。尽管有上述规定，保密信息不包括公共领域中的信息，因违反第4.2条下的乙方职责所导致流入公共领域的信息除外。

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4.2 Confidentiality. Party B understands and agrees that Party B’s employment creates a relationship of confidence and trust between Party B and the Company with respect to all Confidential Information. At all times, both during Party B’s engagement with the Company and after its termination, Party B will keep in confidence and trust all such Confidential Information, and will not use or disclose any such Confidential Information without the written consent of the Company, except as may be necessary in the ordinary course of performing Party B’s services for the Company.

保密性 乙方知悉并同意该雇佣使乙方和公司就所有保密信息达成信任关系。乙方在受聘期间及聘约终止之后的任何时候都要对所有此类保密信息保密，未经公司书面同意，不得使用或披露保密信息，为公司正常履行雇佣服务过程中所需的信息除外。

4.3 Documents, Records, etc. All documents, records, data, apparatus, equipment and other physical property, whether or not pertaining to Confidential Information, which are furnished to Party B by the Company or are produced by Party B in connection with Party B’s employment will be and remain the sole property of the Company. Party B will return to the Company all such materials and property as and when requested by the Company. In any event, Party B will return all such materials and property immediately upon termination of Party B’s engagement for any reason. Party B will not retain with Party B any such material or property or any copies thereof after such termination.

文件、记录等。凡公司提供给乙方或乙方就该雇佣所产生的所有文件、记录、仪器、设备和其他实物财产，无论涉及保密信息与否，都将为公司的独有财产。如果公司要求，乙方将把所有上述资料和财产归还给公司。不管怎样，乙方应在其聘约终止后立即归还所有资料和财产。聘约终止后，乙方不得保留任何上述资料或财产或资料的复印件。

4.4 Noncompetition and Nonsolicitation. Without the prior written consent of the Board of Directors of the Company, during the period that Party B is engaged by Company and for two (2) years thereafter, Party B (i) will refrain from soliciting or encouraging any customer or supplier to terminate or otherwise modify adversely its business relationship with the Company; (ii) will not, directly or indirectly, whether as owner, partner, shareholder, consultant, agent, employee, co-venturer or otherwise, engage, participate, assist or invest in any Competing Business (as hereinafter defined) and (iii) will refrain from directly or indirectly employing, attempting to employ, recruiting or otherwise soliciting, inducing or influencing any person to leave employment with the Company. Party B understands that the restrictions set forth in this Section 4.4 are intended to protect the Company’s interest in its Confidential Information and established employee, customer and supplier relationships and goodwill, and agrees that such restrictions are reasonable and appropriate for this purpose. For purposes of this Agreement, the term “Competing Business” shall mean any business that provides or intends to provide the same or similar types of services or products as those provided or targeted by Company or any of its subsidiaries in any geographic area then served or targeted by Company or any of its subsidiaries. Notwithstanding the foregoing, Party B may own up to two percent (2%) of the outstanding stock of a publicly-held corporation.

非竞争性和非教唆 未经公司董事会书面同意，乙方在受聘期间及之后的2年里：（1）禁止教唆或鼓动客户或供应商终止与公司的业务关系或对其与公司的业务关系做不利的变动；（2）不得以业主、合伙人、股东、顾问、代理人、雇员、合资人等其他身份直接或间接从事、参与、协助或投资任何竞争性企业（如以下所定义）及（3）禁止直接或间接雇佣或试图雇佣、招募、教唆、引诱或影响任何人离职。乙方知悉4.4条中的限制条款旨在保护公司的保密信息以及公司与员工、客户、供应商所确立的关系和商誉，并同意为此目的上述限制条款是合理且适当的。本协议中的术语“竞争企业”是指提供或打算提供与公司或其子公司在其服务或目标地区提供相同或相似服务或产品的企业。尽管有上述规定，乙方可以拥有多达上市公司流通股的2%。

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4.5 Injunction. Party B agrees that it would be difficult to measure any damages caused to the Company which might result from any breach by Party B of the promises set forth in this Section 4, and that in any event money damages would be an inadequate remedy for any such breach. Accordingly, subject to Section 5.2 of this Agreement, Party B agrees that if Party B breaches, or proposes to breach, any portion of this Agreement, the Company shall be entitled, in addition to all other remedies that it may have, to an injunction or other appropriate equitable relief to restrain any such breach without showing or proving any actual damage to the Company.

禁令 乙方同意因其违背第4条所列约定对公司造成的损失很难计量，任何经济赔偿都不足以弥补这一违背所造成的损失。因此，根据本协议第5.2条，乙方同意如果其违背或打算违背本协议的任何条款，公司除可获得所有其他赔偿外，还有权实施禁令或其他同等命令，禁止在未能表明或证明对公司造成的实际损失之前不得有任何此类违背行为。

5. Miscellaneous Provisions

其他规定

5.1 Governing Law: All questions with respect to the construction of this Agreement, and the rights and obligations of the parties hereunder, shall be determined in accordance with the law of the State of Delaware applicable to agreements made and to be performed entirely in the State of Delaware. Any disputes, claims, or causes of action by one party against the other arising out of, in related to or concerning this Agreement shall be commenced and maintained in any state or federal court located in the State of Delaware, and Party B hereby submits to the jurisdiction and venue of any such court.

适用法律。所有涉及本协议以及协议双方的权利和义务的解释的问题，应由特拉华州法律决定，并在特拉华州执行。任何一方对另一方有关本协议的争议，索赔或诉讼，应当在位于特拉华州的任何州或联邦法院进行 ，乙方服从管辖和法庭审判地点。

5.2 No Conflict of Interest.Party B represents and warrants that there is no conflict of interest in Party B’s other contracts for services or other employment or other business relations with the services to be provided pursuant to this Agreement and that Party B will ensure that no such conflict arises during the term and that the performance of Party B’s duties and obligations under this Agreement will not violate any agreement between the Party B and any other person, firm, partnership, company or organization.

无利益冲突 乙方声明并保证不存在与本协议规定提供的服务有利益冲突的乙方的其他服务合同或雇佣关系或业务关系，乙方将确保在聘任期间不会有此类冲突发生，本协议下的乙方职责和义务的履行将不会违反乙方与其他人、事务所、合伙关系、公司或组织间的协议。

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IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first above written.

以兹证明， 双方在文首日签署本雇佣协议。 

“PARTY A”	“PARTY B”
KANDI TECHNOLOGIES GROUP, INC.
HU XIAOMING	DONG XUEQING
By: Hu Xiaoming	By: Dong Xueqing
Its: Chairman of the Board of Directors
Address:	Address:
Jinhua New Energy Vehicle Town	202, No. 8, Lane 100, Anzhi Road, Jiading
Jinhua, Zhejiang Province, PRC	District,Shanghai, PRC

“甲方”	“乙方”
康迪科技集团	董学勤
胡晓明
董事会主席
地址：	地址：
中国浙江省金华市新能源汽车小镇	中国上海市嘉定区安智路100弄8号202

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EX-10.25

Exhibit 10.25

EMPLOYMENT AGREEMENT

雇佣协议

This EMPLOYMENT AGREEMENT (this “Agreement”) is dated as of May 15, 2023 and by and between KANDI TECHNOLOGIES GROUP, INC., a Delaware corporation having its principal office at Jinhua City Industrial Zone, Jinhua, Zhejiang Province, People’s Republic of China (the “Company” or “Party A”) and Jehn Ming Lim, an individual, whose address is Flat 7E, Block 3, Banyan Mansions, Whampoa Garden, Hung Hom, Hong Kong(“Party B”).

2023年5月15日，特拉华州的康迪科技集团有限公司（“下称甲方”）（其地址是中国浙江省金华市金华市工业园区）与林镇铭（“下称乙方”）（其地址是Flat 7E, Block 3, Banyan Mansions, Whampoa Garden, Hung Hom, Hong Kong）签署本聘用协议。

WHEREAS, Party A desires to employ Party B as its Chief Financial Officer(CFO) on the terms and conditions as set forth hereinafter, and Party B desires to be so employed;

鉴于，甲方愿意根据以下条款雇佣乙方为康迪科技集团有限公司首席财务官（CFO）, 乙方愿意接受该聘用。

NOW, THEREFORE, IN CONSIDERATION of the foregoing facts, the mutual covenants and agreements contained herein and other good and valuable consideration, the parties hereby agree as follows:

因此，鉴于上述事实以及本协议包含的共同约定及其他良好和有价值的考虑，双方就以下方面达成一致意见：

1. Employment, Duties and Acceptance.

雇佣，职责和承诺

1.1 Party A hereby agrees to employ Party B as its Chief Financial Officer to be responsible for the public company’s work, and Party B hereby accepts such employment on the terms and conditions contained in this Agreement. During the term of this Agreement, Party B shall make himself available to Party A and to any of its subsidiaries or affiliates as directed to pursue the business of Party A, subject to the supervision and direction of the Board of Directors and the President of the Company.

甲方同意雇佣乙方为公司首席财务官，全面负责上市公司相关工作。根据本协议中的条款和条件，乙方愿意接受该聘用。在本协议期限内，在公司董事会和总裁的监督和指示下，乙方应按指示服务于甲方及甲方的子公司、合资公司或联营公司，开展甲方的业务。

1.2  The Board of Directors and the President of the Company may assign Party B such general management and supervisory responsibilities and executive duties for the Company as are appropriate and commensurate with Party B’s position as Chief Financial Officer of the Company.

公司董事会和总裁可指派乙方执行与其公司首席财务官的岗位相符合的综合管理和监督职责和行政职责。

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1.3 Party B accepts such employment and agrees to devote all of his business time, energies and attention to the performance of his duties hereunder.

乙方接受聘用并同意在工作时间中将投入全部精力开展本职工作。

1.4 Considering the distance between Party B's place of residence and the Company's office location, as well as the feasibility of working online, Party B's working hours are agreed as follows:

Party B's working hours shall be consistent with China's statutory working days. Subject to certain special circumstance as described at the end of this paragraph, Party B shall conduct his work at the Company's office for at least one week in each month, and may work remotely for the rest of the month. Party B’s working hours shall be spent with a target of completing the work, and therefore Party B shall not be entitled to any overtime compensation .During the filing period of the Company’s quarterly reports and annual reports under the Securities Exchange Act of 1934, as amended, Party B should work at the Company’s office on an as-needed basis. In the event of special projects, such as conducting due diligence for investments or road shows, Party B shall follow the Company’s arrangements and his working hours and place shall be adjusted accordingly and not subject to the aforementioned minimum one-week per month on-site working schedule. Any additional days outside of the minimum one-week on-site working schedule of Party B in any month during an ongoing special project shall not be carried over and treated as Party B’s remotely-working days.

1.4 考虑到乙方居住地与公司办公地点的距离和在线办公的可行性，对乙方上班时间的约定如下：

上班地点以现场办公加在线工作来完成公司业务，因而上班时间以完成工作为目标，不另行计算加班费。其中确保每月7天时间现场办公（含往反在途时间2天，工作时间5天）如果当月因个人原因请假而减少的现场时间，应在次月或以后顺月予以弥补。其余时间在线办公，完成公司业务。在申报修订的1934证券交易法规定的季报和年报期间，应视业务需要调整在公司现场办公的时间。

另，如公司有专门项目，比如投资尽调或是路演等，乙方应遵从公司安排，对工作时间和工作场所做相应的调整，不受前述每月7天现场办公时间的限制。当月乙方现场工作时间超过7天以外的额外天数，不作为乙方期后现场办公时间的抵减。

2. Compensation and Benefits

薪酬与福利

2.1 Party A shall pay to Party B a salary at an annual base rate of US$120,000. During Party B’s employment, salary will be paid monthly.

甲方应支付乙方美元$120,000的年薪，在雇佣期间乙方的工资将按月支付。

2.2 [Intentionally Omitted]

[此处故意留白]

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2.3 Party A shall issue to Party B 6,000 shares of its common stock per year which shall be issuable evenly on each six-month anniversary hereof or as otherwise determined by the Board of Directors.

甲方同意支付乙方每年合计10,000股的公司普通股，按两次分期支付，每6个月支付5,000股，或根据董事会决定的其他方式支付。

2.4 During Party B’s employment under this Agreement, the Company shall include Party B as an insured under an officers and directors insurance policy that is available during Party B’s employment under this Agreement.

在本协议下乙方受聘期间，公司应将乙方包括在受聘期间存在的公司高管董事保险之中。

2.5 During Party B’s employment under this Agreement, the Company shall include Party B as a participant under the Company’s executive performance-based equity incentive plan.

在本协议下乙方受聘期间，公司应将乙方包括在公司高管基于绩效的股权激励计划之中。

2.6 During Party B’s employment under this Agreement, Party B shall be entitled to annual vacation and other benefits as may be customarily granted by the Company to employees of similar rank and position.

在本协议下乙方受聘期间，乙方应享有公司类似职位的员工通常得到的年假和其他福利。

2.7 Party A shall reimburse Party B for all reasonable and necessary business related out-of-pocket expenses incurred by Party B during Party B’s employment hereunder including but not limited to normal flight expense between U.S. and China (including Hong Kong) and upon presentation by Party B of such documentation and records as Party A shall from time to time require.

乙方提供相关费用票据和记录后，甲方应报销乙方在受聘期间每月一次来现场办公的往返交通费，期间由甲方提供住宿安排。此外，专门项目的相关费用用另行报销。包括一切合理和必要的和业务相关的费用，包括但不仅限于来回美国中国（包括香港）的正常机票费。

2.8 In addition to the base salary, Party B shall be eligible to receive an annual cash performance bonus for each calendar year during the term of his employment based on performance of Party B, subject to theapproval of the Board of Directors. Party B may be awarded additional bonus from time to time in the sole discretion of the Board of Directors.

除基本年薪外，根据乙方的表现，并在董事会的批准下，乙方在受雇期间可在每个财务年度获得年度现金绩效奖金。在董事会的全权决定，甲方也可以向乙方授予额外的奖金。

2.9 During Party B’s employment under this Agreement, his annualbasesalary and stock compensation are subject to adjustment based on the mutual agreement of Party A and Party B and the approval by the Board of Directors.

在聘用期间，经甲乙双方同意和董事会的批准，可以调整基本年薪和股票报酬。

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3. Term and Termination.

期限和终止

3.1 The term of this Agreement commences on the starting date of Party B’s employment and shall continue for one (1e) years unless sooner terminated as herein provided.

除非提前终止本合同规定，本协议期限自双方签订本协议之日起有效期一年。

3.2 If Party B dies during the term of this Agreement, this Agreement shall thereupon terminate, except that Party A shall pay to the legal representative of Party B’s estate any accrued and unpaid base salary due to Party B pursuant to Section 2.1 hereof based on the days of service prior to the death and all amounts owing to Party B at the time of termination, including for previously accrued but unpaid expense reimbursements.

如果乙方在本协议期限内身亡，应立即终止本协议，但甲方应根据第2.1条规定按乙方身亡前的服务天数支付乙方继承人任何应得未付的基本工资及协议终止日应付乙方的所有金额，包括之前应计未付的报销费用。

3.3 Party A reserves the right to declare Party B in default of this Agreement if Party B materially breaches or habitually neglects the duties which he is required to perform under the terms of this Agreement, or if Party B commits such acts of dishonesty, fraud, misrepresentation, gross negligence or willful misconduct as would prevent the effective performance of his duties or which results in material harm to the Company or its business. Party A may immediately terminate this Agreement for cause by giving written notice of termination to Party B. Upon the date of delivery of the written notice of such termination, the obligations of Party B and the Company under this Agreement shall immediately cease.  In the event of a termination pursuant to this section, Party B shall be entitled to receive any accrued and unpaid amounts earned pursuant to Section 2.1 hereof. Party A shall also pay to Party B all amounts owing to Party B at the time of termination, including for previously accrued but unpaid expense reimbursements pursuant to Section 2.7 hereof. 

如果乙方实质性违反或经常性疏忽履行根据本协议的条款规定的职责，或犯了不诚实，欺诈，虚假陈述，重大疏忽或故意不当行为，妨碍了工作有效进行并对公司及公司业务造成危害，公司有权终止协议。甲方可以立即有理由终止协议，但必须书面通知乙方终止协议。自书面通知送达之日，本协议下甲方和乙方的义务立即停止。如果根据本条款终止协议，乙方应有权获得按第2.1条规定的直到终止日期的任何应得未付的薪资。甲方还应支付在协议终止日应付乙方的所有金额，包括2.7条规定的之前应计未付的报销费用。

3.4 Party B’s employment may be terminated at any time by Party B upon not less than thirty (30) days written notice by Party B to the President and CEO. Upon such termination the obligations of Executive and the Company under Sections 1 and 2 of this Agreement shall immediately cease. In the event of a termination pursuant to this section, Party B shall be entitled to receive any accrued and unpaid amounts earned pursuant to Section 2.1 hereof. Party A shall also pay to Party B all amounts owing to Party B at the time of termination, including for previously accrued but unpaid expense reimbursements pursuant to Section 2.7 hereof.

乙方可以任何时间终止本协议，但必须至少提前三十（30）天的书面通知董事会和首席执行官。自书面通知送达之日，甲方和乙方间在本协议第一条和第二条下的义务即停止。如果根据本条款终止协议，乙方应有权获得按第2.1条规定的直到终止日期的任何应得未付的薪资。甲方还应支付在协议终止日应付乙方的所有费用金额，包括2.7条规定的之前应计未付的报销费用。

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3.5 Company may terminate Party B’s employment upon not less than thirty (30) days written notice by Company to Party B. Upon the effective date as specified in such notice, the obligations of Party B and Party A under Sections 1 & 2 under this Agreement shall immediately cease. In the event of a termination pursuant to this section, Party B shall be entitled to receive any accrued and unpaid amounts earned pursuant to Section 2.1 hereof based on the days of service prior to the termination and all amounts owing to Party B at the time of termination, including for previously accrued but unpaid expense reimbursements pursuant to Section 2.7 hereof.

甲方可以终止本协议，但必须至少提前三十（30）天的书面通知乙方。自通知中所写的终止日起，本协议第1、2条下甲方和乙方的义务立即停止。如果协议终止，乙方应有权获得按第2.1条规定的直到终止日期的任何应得未付的薪资以及协议终止日应付乙方的所有费用金额，包括第2.7条规定的任何应计未付的报销费用。

3.6 In the event of termination of Party B’s employment prior to the expiration of this Agreement, shares of the Company’s common stock owed to Party B pursuant to Section 2.3 that are vested as of the termination date shall be issued to Party B on the termination date.

如乙方在本协议期满前离职，在协议终止日甲方应发行给乙方按第2.3条规定的未付的应付乙方的普通股股份，按实际任职期间进行计算。

4. Confidential Information, Noncompetition and Cooperation.

保密信息、非竞争性和合作

4.1 Confidential Information. As used in this Agreement, “Confidential Information” means information belonging to the Company which is of value to the Company in the course of conducting its business and the disclosure of which could result in a competitive or other disadvantage to the Company. Confidential Information includes, without limitation, financial information, reports, and forecasts; inventions, improvements and other intellectual property; trade secrets; know-how; designs, processes or formulae; software; market or sales information or plans; customer lists; and business plans, prospects and opportunities (such as possible acquisitions or dispositions of businesses or facilities) which have been discussed or considered by the management of the Company. Confidential Information includes information developed by Party B in the course of Party B’s engagement by the Company, as well as other information to which Party B may have access in connection with Party B’s engagement. Confidential Information also includes the confidential information of others with which the Company has a business relationship. Notwithstanding the foregoing, Confidential Information does not include information in the public domain, unless in the public domain due to breach of Party B’s duties under Section 4.2

保密信息本协议中的“保密信息”是指属于公司对公司业务开展有价值的信息，该信息的披露可能给公司造成竞争压力或其他不利影响。保密信息包括但不仅限于财务信息、财务报告和财务预测；发明、改进和其他知识产权、商业机密、专业技术；设计、工艺或配方；软件；营销信息或营销计划；客户名单；经公司管理层审议的经营规划、经营预期和机遇（企业或设施的潜在收购或处置）。保密信息还包括乙方在其受聘期间所形成的信息以及乙方因受聘可能接触到的其他信息。保密信息还包括公司与之有业务关系的其他公司的保密信息。尽管有上述规定，保密信息不包括公共领域中的信息，因违反第4.2条下的乙方职责所导致流入公共领域的信息除外。

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4.2 Confidentiality. Party B understands and agrees that Party B’s engagement creates a relationship of confidence and trust between Party B and the Company with respect to all Confidential Information. At all times, both during Party B’s engagement with the Company and after its termination, Party B will keep in confidence and trust all such Confidential Information, and will not use or disclose any such Confidential Information without the written consent of the Company, except as may be necessary in the ordinary course of performing Party B’s services for the Company.

保密性乙方知悉并同意聘约使乙方和公司就所有保密信息达成信任关系。乙方在受聘期间及聘约终止之后的任何时候都要对所有此类保密信息保密，未经公司书面同意，不得使用或披露保密信息，为公司正常履行顾问服务过程中所需的信息除外（若有）。

4.3 Documents, Records, etc. All documents, records, data, apparatus, equipment and other physical property, whether or not pertaining to Confidential Information, which are furnished to Party B by the Company or are produced by Party B in connection with Party B’s engagement will be and remain the sole property of the Company. Party B will return to the Company all such materials and property as and when requested by the Company. In any event, Party B will return all such materials and property immediately upon termination of Party B’s engagement for any reason. Party B will not retain with Party B any such material or property or any copies thereof after such termination.

文件、记录等。凡公司提供给乙方或乙方就其任职所产生的所有文件、记录、仪器、设备和其他实物财产，无论涉及保密信息与否，都将为公司的独有财产。如果公司要求，乙方将把所有上述资料和财产归还给公司。不管怎样，乙方应在其聘约终止后立即归还所有资料和财产。聘约终止后，乙方不得保留任何上述资料或财产或资料的复印件。

4.4 Noncompetition and Nonsolicitation. Without the prior written consent of the Board of Directors of the Company, during the period that Party B is engaged by Company and for two (2) years thereafter, Party B (i) will refrain from soliciting or encouraging any customer or supplier to terminate or otherwise modify adversely its business relationship with the Company; (ii) will not, directly or indirectly, whether as owner, partner, shareholder, consultant, agent, employee, co-venturer or otherwise, engage, participate, assist or invest in any Competing Business (as hereinafter defined) and (iii) will refrain from directly or indirectly employing, attempting to employ, recruiting or otherwise soliciting, inducing or influencing any person to leave employment with the Company. Party B understands that the restrictions set forth in this Section 4.4 are intended to protect the Company’s interest in its Confidential Information and established employee, customer and supplier relationships and goodwill, and agrees that such restrictions are reasonable and appropriate for this purpose. For purposes of this Agreement, the term “Competing Business” shall mean any business that provides or intends to provide the same or similar types of services or products as those provided or targeted by Company or any of its subsidiaries in any geographic area then served or targeted by Company or any of its subsidiaries. Notwithstanding the foregoing, Party B may own up to two percent (2%) of the outstanding stock of a publicly-held corporation.

非竞争性和非教唆未经公司董事会书面同意，乙方在受聘期间及之后的2年里：（1）禁止教唆或鼓动客户或供应商终止与公司的业务关系或对其与公司的业务关系做不利的变动；（2）不得以业主、合伙人、股东、顾问、代理人、雇员、合资人等其他身份直接或间接从事、参与、协助或投资任何竞争性企业（如以下所定义）及（3）禁止直接或间接雇佣或试图雇佣、招募、教唆、引诱或影响任何人离职。乙方知悉4.4条中的限制条款旨在保护公司的保密信息以及公司与员工、客户、供应商所确立的关系和商誉，并同意为此目的上述限制条款是合理且适当的。本协议中的术语“竞争企业”是指提供或打算提供与公司或其子公司、合资公司、联营公司在其服务或目标地区提供相同或相似服务或产品的企业。

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4.5 Injunction. Party B agrees that it would be difficult to measure any damages caused to the Company which might result from any breach by Party B of the promises set forth in this Section 4, and that in any event money damages would be an inadequate remedy for any such breach. Accordingly, Party B agrees that if Party B breaches, or proposes to breach, any portion of this Agreement, the Company shall be entitled, in addition to all other remedies that it may have, to an injunction or other appropriate equitable relief to restrain any such breach without showing or proving any actual damage to the Company.

禁令乙方同意因其违背第4条所列约定对公司造成的损失很难计量，任何经济赔偿都不足以弥补这一违背所造成的损失。因此，乙方同意如果其违背或打算违背本协议的任何条款，公司除可获得所有其他赔偿外，还有权实施禁令或其他同等命令，禁止在未能表明或证明对公司造成的实际损失之前不得有任何此类违背行为。

5. Miscellaneous Provisions

其他规定

5.1 Governing Law: All questions with respect to the construction of this Agreement, and the rights and obligations of the parties hereunder, shall be determined in accordance with the law of the State of Delaware applicable to agreements made and to be performed entirely in the State of Delaware. Any disputes, claims, or causes of action by one party against the other arising out of, in related to or concerning this Agreement shall be commenced and maintained in any state or federal court located in the State of Delaware, and Party B hereby submits to the jurisdiction and venue of any such court.

适用法律。所有涉及本协议以及协议双方的权利和义务的解释的问题，应由特拉华州法律决定，并在特拉华州执行。任何一方对另一方有关本协议的争议，索赔或诉讼，应当在位于特拉华州的任何州或联邦法院进行，乙方服从管辖和法庭审判地点。

5.2 No Conflict of Interest. Party B represents and warrants that there is no conflict of interest in Party B’s other contracts for services or other employment or other business relations with the services to be provided pursuant to this Agreement and that Party B will ensure that no such conflict arises during the term and that the performance of Party B’s duties and obligations under this Agreement will not violate any agreement between the Party B and any other person, firm, partnership, company or organization.

无利益冲突乙方声明并保证不存在与本协议规定提供的服务有利益冲突的乙方的其他服务合同或雇佣关系或业务关系，乙方将确保在聘任期间不会有此类冲突发生，本协议下的乙方职责和义务的履行将不会违反乙方与其他人、事务所、合伙关系、公司或组织间的协议。

Party B understands that prior to the signing of this Agreement, he has had the right to seek independent legal advice.

乙方知悉在签署本合同之前，有权寻求独立的法律咨询。

Party A and Party B hereby represent that they fully understand the above arrangements and agree to sign this Agreement and abide by the above arrangements. Both parties shall keep a copy of this Agreement for future reference.

甲方和乙方在此声明，他们完全明白上述规定，并同意签署合同并遵守上述规定。双方各保留一份合同，以供备查。

If there is any inconsistency or conflict between the Chinese and English versions, the Chinese version shall prevail.

中英文本如有不一致或冲突，以中文本为准。

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IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first above written.

以兹证明，双方在文首日签署本雇佣协议。 

“COMPANY”	“PARTY B”
KANDI TECHNOLOGIES GROUP, INC.	JEHN MING LIM
/s/ Dong Xueqin	/s/ JEHN MING LIM
By: Dong Xueqin
Title: President and Chief Executive Officer

“甲方”	“乙方”
康迪科技集团有限公司	林镇铭

董学勤

总裁和首席执行官

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EX-10.26

Exhibit 10.26

SC 运动车辆有限责任公司

与

奥兰赖斯

关于

北方集团的股权转让协议的补充协议

Supplementary Agreement on Equity Transfer Agreement

Of

Northern Group, Inc.

by and between

SC Autosports, LLC

And

Olen Rice

甲方：SC Autosports 有限责任公司（“受让方”）

Party A: SC Autosports, LLC (the “Transferee”),

乙方：奥兰赖斯（Olen Rice）（“转让方”）

Party B: Olen Rice (the “Transferor”),

鉴于：2023年6月17日，SC Autosports 有限责任公司与奥兰赖斯签订了《北方集团的股权转让协议》，现甲乙双方就该协议所涉的条款作如下补充：

WHEREAS: On June 17, 2023, SC Autosports Co., Ltd. and Olen Rice entered into the “Northern Group Equity Transfer Agreement”. Now Party A and Party B agreed to amend the following terms stipulated in the original equity transfer agreement:

一、 原合同里的第二条 转让价款的计算、支付与股权交割提到：“双方对北方集团（NGI ）在2023年6月1日至2024年5月31日、2024年6月1日至2025年5月31日、2025年6月1日至2026年5月31日（“托管期”）的利润目标（税前利润）分别为： 460万美元、525万美元、600万美元。本协议中的税前利润应根据美国公认会计准则（US GAAP）对“税前利润“的定义来计算，并由甲方母公司康迪科技集团聘请的时任第三方上市公司年报审计师确认。”，现甲乙双方同意把利润目标时间点改为 ”双方对北方集团（NGI ）在2023年12月1日至2024年11月30日、2024年12月1日至2025年11月30日、2025年12月1日至2026年11月30日（“托管期”）的利润目标（税前利润）分别为： 460万美元、525万美元、600万美元。本协议中的税前利润应根据美国公认会计准则（US GAAP）对“税前利润“的定义来计算，并由甲方母公司康迪科技集团聘请的时任第三方上市公司年报审计师确。”

1. Pursuant to the Article 2: Calculation of Transfer Value, Payment, and Issuance of Shares in the original equity transfer agreement which states that “Both Parties target earnings (Pretax Income) of NGI for the period from June 1, 2023 to May 31, 2024, June 1, 2024 to May 31, 2025, and June 1, 2025 to May 31, 2026 (“Escrow Period”) to be $4.6 million, $5.25 million and $6 million, respectively. Pretax Income in this agreement shall be calculated based on the definition of “Pretax Income” in the United States Generally Accepted Accounting Principles (US GAAP) and shall be confirmed by a third-party auditor engaged then by Party A’s parent, i.e.: Kandi Technologies Group, Inc. upon its respective annual report audit.”, now both parties agreed to amend the net profit assessment period to be “Both Parties target earnings (Pretax Income) of NGI for the period from December 1, 2023 to November 30, 2024, December 1, 2023 to November 30, 2025, and December 1, 2023 to November 30, 2026 (“Escrow Period”) to be $4.6 million, $5.25 million and $6 million, respectively. Pretax Income in this agreement shall be calculated based on the definition of “Pretax Income” in the United States Generally Accepted Accounting Principles (US GAAP) and shall be confirmed by a third-party auditor engaged then by Party A’s parent, i.e.: Kandi Technologies Group, Inc. upon its respective annual report audit.”

2

二、 原合同里的事项2.3， “在2023年6月1日至2024年5月31日，如果北方集团（NGI）的税前利润导致乙方获得的被授予的股票少于2,431,612股，双方有权选择终止协议，乙方将获得的KNDI股票退还给甲方母公司，相应的，甲方应将北方集团的股权退还给乙方。這個權力將在2024年8月1日自動失效。”， 现甲乙双方同意取消该条款，确保《北方集团的股权转让协议》不会给终止。

2. Pursuant to the item 2.3 in the original equity transfer agreement which states that “In the event NGI’s Pretax Income during the period from June 1, 2023 to May 31, 2024 resulting in Party B receiving less than 2,431,612 shares of vested Stock, both parties shall have the option to terminate the Agreement. Party B shall return the received KNDI stocks to Party A’s parent and in return, Party A shall return the NGI’s equities to Party B. This option will expire automatically on August 1, 2024.”, now both parties agreed to cancel this clause in order to make sure the equity transfer agreement would not be terminated.

三、 其余条款不变，维持有效。

3. The remaining terms in the original equity transfer agreement remain unchanged and valid.

四、 本协议于双方签署时生效。

4. This Agreement shall take effect when signed by both parties.

甲方

Party A

SC Autosports, LLC

授权代表人签字:

Signature of the Authorized Representative:   /s/ Johnny Tai

乙方：

Party B

Olen Rice

签名：

Signature:   /s/ Olan Rice

3

EX-21.1

Exhibit 21.1

SUBSIDIAIRES OF KANDI TECHNOLOGIES GROUP, INC.

Name	Place of Incorporation
Continental Development Limited	Hong Kong, Special Administrative Region of the People’s Republic of China
Kandi Technologies Group, Inc.	British Virgin Islands
Kandi Electric Innovation, Inc.	Nevada, USA
Zhejiang Kandi Technologies Group Co., Ltd.	The People’s Republic of China
China Battery Exchange (Zhejiang) Technology Co., Ltd.	The People’s Republic of China
Jinhua Kandi New Energy Vehicles Co., Ltd.	The People’s Republic of China
Kandi Electric Vehicles (Hainan) Co., Ltd.	The People’s Republic of China
Hainan Kandi Holding New Energy Technology Co., Ltd.	The People’s Republic of China
Zhejiang Kandi Smart Battery Swap Technology Co., Ltd.	The People’s Republic of China
Yongkang Scrou Electric Co, Ltd.	The People’s Republic of China
Jiangxi Province Huiyi New Energy Co., Ltd.	The People’s Republic of China
SC Autosports, LLC (d/b/a: Kandi America)	Texas, USA
Kandi America Investment, LLC.	Texas, USA
Northern Group, Inc.	Wisconsin, USA
Kandi Technologies Canada Inc.	Canada

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-249585 and 333-230495) and the Registration Statements on Form S-8 (No. 333-274462 and 333-204459) of Kandi Technologies Group, Inc. (the “Company”) of our report dated March 14, 2024, relating to the Company’s consolidated financial statements, and the effectiveness of the Company’s internal control over financial reporting, which appears in this Annual Report on Form 10-K of the Company for the year ended December 31, 2023.

/s/ ARK Pro CPA & Co

(Formerly HKCM CPA & Co.)

Hong Kong, China

March 14, 2024

 

EX-31.1

Exhibit 31.1

Certification Pursuant to
Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Amended

I, Xueqin Dong, certify that:

1. I have reviewed this annual report on Form 10-K of Kandi Technologies Group, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 14, 2024	/s/ Xueqin Dong
	Xueqin Dong
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification Pursuant to
Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Amended

I, Jehn Ming Lim, certify that:

1. I have reviewed this annual report on Form 10-K of Kandi Technologies Group, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 14, 2024	/s/ Jehn Ming Lim
	Jehn Ming Lim
	Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K for the year ended December 31, 2023 (the “Report”) of Kandi Technologies Group, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof, we, Xueqin Dong, Chief Executive Officer, and Jehn Ming Lim, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 14, 2024	/s/ Xueqin Dong
	Xueqin Dong
	President and Chief Executive Officer
	(Principal Executive Officer)
	/s/ Jehn Ming Lim
	Jehn Ming Lim
	Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

EX-97.1

Exhibit 97.1

Kandi Technologies group, inc.

COMPENSATION RECOVERY POLICY

Effective December 1, 2023

In accordance with Section 10D of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Exchange Act Rule 10D-1, and rule 5608 of the Nasdaq rules (“NASDAQ RULES”), where the securities of Kandi Technologies Group, Inc. (the “Company”) are listed, the Company’s Board of Directors (the “Board”) has adopted this Compensation Recovery Policy (the “Policy”). The purpose of this Policy is to recover the erroneously awarded Inventive-Based Compensation (defined below), if any, in the event that the Company is required to prepare an Accounting Restatement.

Capitalized terms used in the Policy are defined in Section A below. The application of the Policy to Executive Officers is not discretionary, except to the limited extent provided in Section G below, and applies without regard to whether an Executive Officer was at fault.

A. Definitions

“Accounting Restatement” means an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period.

“Accounting Restatement Determination Date” means the date that a Company is required to prepare an Accounting Restatement, which is the earlier of: (a) the date the Board, a committee of the Board, or one or more of the officers of the Company authorized to take such action if Board action is not required, concludes, or reasonably should have concluded, that the Company is required to prepare an Accounting Restatement; and (b) the date a court, regulator, or other legally authorized body directs the Company to prepare an Accounting Restatement.

“Excess Compensation” means the amount of Incentive-Based Compensation Received that exceeds the amount of Incentive-Based Compensation that otherwise would have been Received had such Incentive-Based Compensation been determined based on the restated amounts (this is referred to in the listings standards as “erroneously awarded incentive-based compensation”) and must be computed without regard to any taxes paid.

“Executive Officer” means each individual who is or was ever designated as an “officer” by the Board in accordance with Exchange Act Rule 16a-1(f).

“Financial Reporting Measures” means measures that are determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, and any measures that are derived wholly or in part from such measures. Stock price and total shareholder return are also Financial Reporting Measures. A Financial Reporting Measure need not be presented within the financial statements or included in a filing with the Securities and Exchange Commission.

“Incentive-Based Compensation” means any compensation that is granted, earned, or vested based wholly or in part upon the attainment of a Financial Reporting Measure (for the avoidance of doubt, no compensation that is potentially subject to recovery under the Policy will be earned until the Company’s duty to recover under the Policy has lapsed) and excludes the following: salaries, bonuses paid solely at the discretion of the Committee or Board that are not paid from a bonus pool that is determined by satisfying a Financial Reporting Measure, bonuses paid solely upon satisfying one or more subjective standards and/or completion of a specified employment period, non-equity incentive plan awards earned solely upon satisfying one or more strategic measures or operational measures, and equity awards for which the grant is not contingent upon achieving any Financial Reporting Measure performance goal and vesting upfront, upon the signing of certain agreements, or is contingent solely upon completion of time requirement (e.g., time-based vesting equity awards) and/or attaining one or more non-Financial Reporting Measures.

“Received” means, with respect to any Incentive-based Compensation, actual or deemed receipt, and Incentive-Based Compensation is “Received” under the Policy in the Company’s fiscal period during which the Financial Reporting Measure specified in the Incentive-Based Compensation award is attained, even if the payment or grant of the Incentive-Based Compensation occurs after the end of that period. For the avoidance of doubt, the Policy does not apply to Incentive-Based Compensation for which the Financial Reporting Measure is attained prior to October 2, 2023.

B. Persons Covered by the Policy

The Policy is binding and enforceable against all Executive Officers who received Incentive-Based Compensation covered by this Policy from the Company (See Section E below).

C. Administration of the Policy

The Compensation Committee of the Board (the “Committee”) has full-delegated authority to administer the Policy. The Committee is authorized to interpret and construe the Policy and to make all determinations necessary, appropriate, or advisable for the administration of the Policy. In addition, if determined in the discretion of the Board, the Policy may be administered by the independent members of the Board or another committee of the Board made up of independent members of the Board, in which case all references to the Committee will be deemed to refer to such independent members of the Board or such other Board committee. All determinations of the Committee will be final and binding and will be given the maximum deference permitted by law.

D. Accounting Restatements Requiring Application of the Policy

If the Company is required to prepare an Accounting Restatement, then the Committee must determine the Excess Compensation, if any, that must be recovered. The Company’s obligation to recover Excess Compensation is not dependent on if or when the restated financial statements are filed.

E. Compensation Covered by the Policy

The Policy applies to all Incentive-Based Compensation Received by an Executive Officer:

(a) after beginning service as an Executive Officer;

2

(b) who served as an Executive Officer at any time during the performance period for that Incentive-Based Compensation;

(c) while the Company has a class of securities listed on the Exchange;

(d) during the three completed fiscal years immediately preceding the Accounting Restatement Determination Date. In addition to these last three completed fiscal years, the Policy must apply to any transition period (that results from a change in the Company’s fiscal year) within or immediately following those three completed fiscal years. However, a transition period between the last day of the Company’s previous fiscal year end and the first day of the Company’s new fiscal year that comprises a period of nine to 12 months would be deemed a completed fiscal year; and

(e) on or after October 2, 2023.

F. Excess Compensation Subject to Recovery of the Policy

To determine the amount of Excess Compensation for Incentive-Based Compensation based on stock price or total shareholder return, where it is not subject to mathematical recalculation directly from the information in an Accounting Restatement, the amount must be based on a reasonable estimate of the effect of the Accounting Restatement on the stock price or total shareholder return upon which the Incentive-Based Compensation was Received and the Company must maintain documentation of the determination of that reasonable estimate and provide the documentation to the Exchange.

G. Repayment of Excess Compensation

The Company must recover Excess Compensation reasonably promptly and Executive Officers are required to repay Excess Compensation to the Company. Subject to applicable law, the Company may recover Excess Compensation by requiring the Executive Officer to repay such amount to the Company by direct payment to the Company or such other means or combination of means as the Committee determines to be appropriate (these determinations do not need to be identical as to each Executive Officer). These means may include:

(a) requiring reimbursement of cash Incentive-Based Compensation previously paid;

(b) seeking recovery of any gain realized on the vesting, exercise, settlement, sale, transfer, or other disposition of any equity-based awards;

(c) offsetting the amount to be recovered from any unpaid or future compensation to be paid by the Company or any affiliate of the Company to the Executive Officer;

(d) cancelling outstanding vested or unvested equity awards; and/or

(e) taking any other remedial and recovery action permitted by law, as determined by the Committee.

3

The repayment of Excess Compensation must be made by an Executive Officer notwithstanding any Executive Officer’s belief (whether or not legitimate) that the Excess Compensation had been previously earned under applicable law and therefore is not subject to recovery.

The Company is prohibited from indemnifying any Executive Officer or former Executive Officer against the loss of Excess Compensation.

In addition to its rights to recovery under the Policy, the Company or any affiliate of the Company may take any legal actions it determines appropriate to enforce an Executive Officer’s obligations to the Company or its affiliate or to discipline an Executive Officer, including (without limitation) termination of employment, institution of civil proceedings, reporting of misconduct to appropriate governmental authorities, reduction of future compensation opportunities, or change in role. The decision to take any actions described in the preceding sentence will not be subject to the approval of the Committee and can be made by the Board, any committee of the Board, or any duly authorized officer of the Company or of any applicable affiliate of the Company.

H. Limited Exceptions to the Policy

The Company must recover Excess Compensation in accordance with the Policy except to the limited extent that any of the conditions set forth below are met, and the Committee determines that recovery of the Excess Compensation would be impracticable:

(a) The direct expense paid to a third party to assist in enforcing the Policy would exceed the amount to be recovered. Before reaching this conclusion, the Company must make a reasonable attempt to recover the Excess Compensation, document the reasonable attempt(s) taken to so recover, and provide that documentation to the Exchange;

(b) Recovery would violate home country law where that law was adopted prior to November 28, 2022. Before reaching this conclusion, the Company must obtain an opinion of home country counsel, acceptable to the Exchange, that recovery would result in such a violation, and must provide such opinion to the Exchange; or

(c) Recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Company, to fail to meet the requirements of 26 U.S.C. 401(a)(13) (Assignment and alienation) or 26 U.S.C. 411(a) (Minimum vesting standards) and regulations thereunder.

4

I. Other Important Information in the Policy

Notwithstanding the terms of any of the Company’s organizational documents (including, but not limited to, the Company’s bylaws), any corporate policy or any contract (including, but not limited to, any indemnification agreement), neither the Company nor any affiliate of the Company will indemnify or provide advancement for any Executive Officer against any loss of Excess Compensation, or any claims relating to the Company’s enforcement of its rights under the Policy. Neither the Company nor any affiliate of the Company will pay for or reimburse insurance premiums for an insurance policy that covers potential recovery obligations. In the event that pursuant to the Policy the Company is required to recover Excess Compensation from an Executive Officer who is no longer an employee, the Company will be entitled to seek recovery in order to comply with applicable law, regardless of the terms of any release of claims or separation agreement such individual may have signed. Neither the Company nor any affiliate of the Company will enter into any agreement that exempts any Incentive-Based Compensation that is granted, paid, or awarded to an Executive Officer from the application of the Policy or that waives the Company’s right to recovery of any Excess Compensation, and the Policy shall supersede any such agreement (whether entered into before, on, or after the adoption of the Policy).

The Committee or Board may review and modify the Policy from time to time.

If any provision of the Policy or the application of any such provision to any Executive Officer is adjudicated to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability will not affect any other provisions of the Policy or the application of such provision to another Executive Officer, and the invalid, illegal or unenforceable provisions will be deemed amended to the minimum extent necessary to render any such provision or application enforceable.

The Policy will terminate and no longer be enforceable when the Company ceases to be a listed issuer within the meaning of Section 10D of the Exchange Act or when the Exchange Act Rule 10D-1, and the rule 5608 of the NYSEA Guide are no longer effective.

5

XML

Cover - USD ($)

12 Months Ended

Dec. 31, 2023

Mar. 08, 2024

Jun. 30, 2023

Document Information [Line Items]

Document Type

10-K

Document Annual Report

true

Document Transition Report

false

Document Financial Statement Error Correction [Flag]

false

Entity Interactive Data Current

Yes

ICFR Auditor Attestation Flag

true

Amendment Flag

false

Document Period End Date

Dec. 31, 2023

Document Fiscal Year Focus

2023

Document Fiscal Period Focus

FY

Documents Incorporated by Reference [Text Block]

None.

Entity Information [Line Items]

Entity Registrant Name

KANDI TECHNOLOGIES GROUP, INC.

Entity Central Index Key

0001316517

Entity File Number

001-33997

Entity Tax Identification Number

90-0363723

Entity Incorporation, State or Country Code

DE

Current Fiscal Year End Date

--12-31

Entity Well-known Seasoned Issuer

No

Entity Voluntary Filers

No

Entity Current Reporting Status

Yes

Entity Shell Company

false

Entity Filer Category

Accelerated Filer

Entity Small Business

true

Entity Emerging Growth Company

false

Entity Public Float

$ 237,630,412.8

Entity Contact Personnel [Line Items]

Entity Address, Address Line One

Jinhua New Energy Vehicle Town

Entity Address, Address Line Two

Zhejiang Province

Entity Address, City or Town

Jinhua

Entity Address, Country

CN

Entity Address, Postal Zip Code

321016

Entity Phone Fax Numbers [Line Items]

City Area Code

(86 - 579)

Local Phone Number

82239856

Entity Listings [Line Items]

Title of 12(b) Security

Common Stock

Trading Symbol

KNDI

Security Exchange Name

NASDAQ

Entity Common Stock, Shares Outstanding

87,358,234

XML

Audit Information	12 Months Ended
	Dec. 31, 2023
Auditor [Table]
Auditor Name	ARK Pro CPA & Co
Auditor Firm ID	3299
Auditor Location	Hong Kong, China

XML

Consolidated Balance Sheets - USD ($)	Dec. 31, 2023	Dec. 31, 2022
CURRENT ASSETS
Cash and cash equivalents	$ 33,756,941	$ 84,063,717
Restricted cash	59,873,127	66,976,554
Certificate of deposit	33,947,212	81,191,191
Accounts receivable (net of allowance for doubtful accounts of $2,886,223 and $2,285,386 as of December 31, 2023 and December 31, 2022, respectively)	18,951,745	38,150,876
Inventories	61,551,268	40,475,366
Notes receivable	124,473,111	434,461
Other receivables	6,476,542	11,912,615
Prepayments and prepaid expense	1,909,094	2,970,261
Advances to suppliers	2,609,098	3,147,932
TOTAL CURRENT ASSETS	343,548,138	329,322,973
NON-CURRENT ASSETS
Property, plant and equipment, net	98,803,772	97,168,753
Intangible assets, net	6,395,825	7,994,112
Land use rights, net	2,754,442	2,909,950
Construction in progress		199,837
Deferred tax assets	814,610	1,432,527
Long-term investment		144,984
Goodwill	33,146,682	33,178,229
Other long-term assets	9,993,130	10,630,911
TOTAL NON-CURRENT ASSETS	151,908,461	153,659,303
TOTAL ASSETS	495,456,599	482,982,276
CURRENT LIABILITIES
Accounts payable	28,744,854	35,321,262
Other payables and accrued expenses	7,252,814	14,131,414
Short-term loans	9,072,336	5,569,154
Notes payable	24,071,461	19,123,476
Income tax payable	2,130,083	1,270,617
Other current liabilities	5,402,081	6,089,925
TOTAL CURRENT LIABILITIES	76,673,629	81,505,848
NON-CURRENT LIABILITIES
Long-term loans	8,389,163
Deferred taxes liability	963,691	1,378,372
Contingent consideration liability	2,693,000	1,803,000
Other long-term liabilities	227,024	602,085
TOTAL NON-CURRENT LIABILITIES	12,272,878	3,783,457
TOTAL LIABILITIES	88,946,507	85,289,305
STOCKHOLDER’S EQUITY
Common stock, $0.001 par value; 100,000,000 shares authorized; 87,532,800 and 77,668,730 shares issued and 87,348,234 and 74,180,171 outstanding at December 31,2023 and December 31,2022, respectively	87,533	77,669
Less: Treasury stock (184,566 shares with average price of $2.75 and 3,488,559 shares with average price of $2.81 at December 31, 2023 and December 31, 2022, respectively)	(507,013)	(9,807,820)
Additional paid-in capital	457,847,155	451,373,645
Accumulated deficit (the restricted portion is $4,422,033 and $4,422,033 at December 31, 2023 and December 31, 2022, respectively)	(16,332,633)	(16,339,765)
Accumulated other comprehensive loss	(36,970,066)	(28,333,239)
TOTAL KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS’ EQUITY	404,124,976	396,970,490
Non-controlling interests	2,385,116	722,481
TOTAL STOCKHOLDERS’ EQUITY	406,510,092	397,692,971
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 495,456,599	$ 482,982,276

XML

Consolidated Balance Sheets (Parentheticals) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Net of allowance for doubtful accounts (in Dollars)	$ 2,886,223	$ 2,285,386
Common stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	87,532,800	77,668,730
Common stock, shares outstanding	87,348,234	74,180,171
Treasury stock, shares	184,566	3,488,559
Treasury stock, average price (in Dollars per share)	$ 2.75	$ 2.81
Restricted portion of accumulated deficit (in Dollars)	$ 4,422,033	$ 4,422,033

XML

Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Statement [Abstract]
REVENUES, NET	$ 123,599,232	$ 117,813,049
COST OF GOODS SOLD	(82,229,209)	(98,295,323)
GROSS PROFIT	41,370,023	19,517,726
OPERATING EXPENSE:
Research and development	(4,265,176)	(6,029,608)
Selling and marketing	(13,335,950)	(5,501,475)
General and administrative	(35,381,496)	(32,325,889)
Impairment of goodwill	(496,981)	(642,665)
Impairment of long-lived assets	(942,591)	(2,697,521)
TOTAL OPERATING EXPENSE	(54,422,194)	(47,197,158)
LOSS FROM OPERATIONS	(13,052,171)	(27,679,432)
OTHER INCOME (EXPENSE):
Interest income	9,984,558	6,427,502
Interest expense	(1,327,341)	(707,488)
Change in fair value of contingent consideration	1,803,000	4,196,995
Government grants	2,017,551	1,639,328
Other income, net	4,047,074	2,784,561
TOTAL OTHER INCOME , NET	16,524,842	14,340,898
INCOME (LOSS) BEFORE INCOME TAXES	3,472,671	(13,338,534)
INCOME TAX (EXPENSE) BENEFIT	(1,802,904)	487,510
NET INCOME (LOSS)	1,669,767	(12,851,024)
LESS: NET INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTERESTS	1,662,635	(727,361)
NET INCOME (LOSS) ATTRIBUTABLE TO KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS	7,132	(12,123,663)
OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustment	(8,636,827)	(28,585,025)
COMPREHENSIVE LOSS	$ (6,967,060)	$ (41,436,049)
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC (in Shares)	78,781,094	75,571,702
WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED (in Shares)	79,902,891	75,571,702
NET INCOME (LOSS) PER SHARE, BASIC (in Dollars per share)	$ 0.02	$ (0.17)
NET INCOME (LOSS) PER SHARE, DILUTED (in Dollars per share)	$ 0.02	$ (0.17)

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Consolidated Statements of Changes in Stockholders’ Equity - USD ($)	Common Stock	Treasury Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)	Non-controlling interests	Total
Balance at Dec. 31, 2021	$ 77,385	$ (2,392,203)	$ 449,479,461	$ (4,216,102)	$ 251,786		$ 443,200,327
Balance (in Shares) at Dec. 31, 2021	77,385,130
Stock issuance and award	$ 284		746,636				746,920
Stock issuance and award (in Shares)	283,600
Stock based compensation			1,231,566				1,231,566
Stock buyback		(7,415,617)	(84,018)				(7,499,635)
Capital contribution from shareholder						1,449,842	1,449,842
Net income (loss)				(12,123,663)		(727,361)	(12,851,024)
Foreign currency translation					(28,585,025)		(28,585,025)
Balance at Dec. 31, 2022	$ 77,669	(9,807,820)	451,373,645	(16,339,765)	(28,333,239)	722,481	397,692,971
Balance (in Shares) at Dec. 31, 2022	77,668,730
Stock issuance and award	$ 11,686		9,357,192				9,368,878
Stock issuance and award (in Shares)	11,685,968
Cancellation of the Treasury Stock	$ (3,489)	9,807,820	(9,804,331)
Cancellation of the Treasury Stock (in Shares)	(3,488,559)
Stock option exercise	$ 1,667		3,448,322				$ 3,449,989
Stock option exercise (in Shares)	1,666,661						1,666,661
Stock based compensation			3,476,058				$ 3,476,058
Stock buyback		(507,013)	(3,731)				(510,744)
Net income (loss)				7,132		1,662,635	1,669,767
Foreign currency translation					(8,636,827)		(8,636,827)
Balance at Dec. 31, 2023	$ 87,533	$ (507,013)	$ 457,847,155	$ (16,332,633)	$ (36,970,066)	$ 2,385,116	$ 406,510,092
Balance (in Shares) at Dec. 31, 2023	87,532,800

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Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 1,669,767	$ (12,851,024)
Adjustments to reconcile net (loss) income to net cash provided by operating activities
Depreciation and amortization	11,913,647	12,427,973
Impairments	1,439,573	3,340,186
Provision of allowance for doubtful accounts	656,330	(542,801)
Deferred taxes	203,236	(461,045)
Loss from long-term Investment	141,389
Change in fair value of contingent consideration	(1,803,000)	(4,196,995)
Stock award and stock based compensation expense	11,059,801	1,926,376
Changes in operating assets and liabilities:
Accounts receivable	10,560,521	(20,965,140)
Notes receivable	(123,992,862)	4,726,570
Inventories	(21,531,323)	(9,145,298)
Other receivables and other assets	5,165,337	(4,932,463)
Advances to supplier and prepayments and prepaid expenses	1,491,762	16,275,678
Increase (Decrease) In:
Accounts payable	38,603,301	62,592,477
Other payables and accrued liabilities	(5,062,494)	7,842,715
Notes payable	(32,629,627)	(24,533,127)
Income tax payable	954,006	(25,171)
Net cash (used in) provided by operating activities	(101,160,636)	31,478,911
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment, net	(13,172,512)	(3,690,235)
Payment for construction in progress	(75,185)	(129,894)
Certificate of deposit	45,244,390	(31,210,986)
Acquisition of NGI	282,135
Net cash provided by (used in) investing activities	32,278,828	(35,031,115)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term loans	23,420,534	30,765,776
Repayments of short-term loans	(19,709,663)	(28,357,211)
Repayments of long-term loans	(46,426)
Proceeds from long-term loans	8,225,000
Contribution from non-controlling shareholder		757,981
Purchase of treasury stock	(510,745)	(7,499,634)
Proceeds from exercises stock options, stock awards and other financing	3,449,988
Net cash provided by (used in) financing activities	14,828,688	(4,333,088)
NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	(54,053,120)	(7,885,292)
Effect of exchange rate changes	(3,357,083)	(9,750,444)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR	151,040,271	168,676,007
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	93,630,068	151,040,271
-CASH AND CASH EQUIVALENTS AT END OF PERIOD	33,756,941	84,063,717
-RESTRICTED CASH AT END OF PERIOD	59,873,127	66,976,554
SUPPLEMENTARY CASH FLOW INFORMATION
Income taxes paid	311,504	350,002
Interest paid	965,025	345,451
SUPPLEMENTAL NON-CASH DISCLOSURES:
Contribution from non-controlling shareholder by inventories, fixed assets and intangible assets		393,986
Common stock issued for settlement of payables related to acquisitions (see Note 19)	$ 1,812,005

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Organization and Principal Activities

12 Months Ended

Dec. 31, 2023

Organization and Principal Activities [Abstract]

ORGANIZATION AND PRINCIPAL ACTIVITIES

NOTE 1 - ORGANIZATION AND PRINCIPAL ACTIVITIES

Kandi Technologies Group, Inc. (“Kandi Technologies”) was incorporated under the laws of the State of Delaware on March 31, 2004. As used herein, the terms “Company” or “Kandi” refer to Kandi Technologies and its operating subsidiaries, as described below.

Headquartered in Jinhua City, Zhejiang Province, People’s Republic of China (“China” or “PRC”), the Company is one of China’s leading producers and manufacturers of electric vehicle (“EV”) products, EV parts, and off-road vehicles for sale in the Chinese and the global markets. The Company conducts its primary business operations through its wholly-owned subsidiaries, Zhejiang Kandi Vehicles Co., Ltd. (“Kandi Vehicles”), Kandi Vehicles’ wholly and partially-owned subsidiaries, and SC Autosports, LLC (“SC Autosports”, d/b/a Kandi America) and its wholly-owned subsidiary, Kandi America Investment, LLC (“Kandi Investment”). In March 2021, Zhejiang Kandi Vehicles Co., Ltd. changed its name to Zhejiang Kandi Technologies Group Co., Ltd. (“Zhejiang Kandi Technologies”).

The Company’s organizational chart as of the date of this report is as follows:

 

Operating Subsidiaries

Pursuant to certain VIE   agreements signed by Zhejiang Kandi Technologies and Mr. Hu Xiaoming, from January 2011 to March 13, 2022, Zhejiang Kandi Technologies is entitled to 100% of the economic benefits, voting rights and residual interests (100% of profits and losses) of Jinhua Kandi New Energy Vehicles Co., Ltd. (“Kandi New Energy”). Specifically, on May 18, 2010, Zhejiang Kandi Technologies signed the Agreement of Establishment of Kandi New Energy with Mr. Hu Xiaoming, pursuant to which both parties agreed to together contribute RMB 36 Million to establish Kandi New Energy, and each party will contribute 50% of the total investment. Zhejiang Kandi Technologies will make its contribution in kind equivalent to its portion and Mr. Hu will make his contribution in cash. On the same date, Zhejiang Kandi Technologies signed a Contractor’s Agreement with Mr. Hu Xiaoming pursuant to which both parties agreed that during the existence of Kandi New Energy, it is contracted to Zhejiang Kandi Technologies for operation and management and Mr. Hu Xiaoming will not participate in any management, dividend distribution or loss of Kandi New Energy. On the same day, Zhejiang Kandi Technologies also signed a Share Escrow and Trust Agreement with Mr. Hu Xiaoming, pursuant to which upon the existence of Kandi New Energy,  Mr. Hu Xiaoming agreed to entrust his entire 50% equity in the Kandi New Energy with Zhejiang Kandi Technologies, and Zhejiang Kandi Technologies agrees to accept such trust. All the above-mentioned agreements shall only be effective within 30 days upon the Kandi New Energy receives government’s approval and reaches to the practical operation stage. Therefore, all the three agreements became effective on January 2011. All these three agreements were previously attached as Exhibit 10.13, Exhibit 10.14, and Exhibit 10.15 to the Company’s Annual Report on Form 10-K filed on March 31, 2011 and are incorporated herein by reference. Effective March 14, 2022, Mr. Hu Xiaoming transferred his 50% equity interests of Kandi New Energy to Zhejiang Kandi Technologies. As a result, Kandi New Energy has become a wholly-owned subsidiary of Zhejiang Kandi Technologies.

In April 2012, pursuant to an agreement with the shareholders of Yongkang Scrou Electric Co, Ltd. (“Yongkang Scrou”), the Company acquired 100% of Yongkang Scrou, a manufacturer of automobile and EV parts. In September 2020, Zhejiang Kandi Technologies transferred all of its equity interest in Yongkang Scrou to its wholly owned subsidiary, Zhejiang Kandi Smart Battery Swap Technology Co., Ltd. (“Kandi Smart Battery Swap”).

On February 18, 2021, Zhejiang Kandi Technologies signed an Equity Transfer Agreement with Geely to transfer the remaining 22% equity interests of the Fengsheng Automotive Technology Group Co., Ltd. to Geely. As of September 10, 2021, the Company received all the equity transfer payment.

In April 2013, Zhejiang Kandi Technologies and Kandi New Energy formed Kandi Electric Vehicles (Wanning) Co., Ltd., which was renamed Kandi Electric Vehicles (Hainan) Co., Ltd. (“Kandi Hainan”), when it was relocated from Wanning City to Haikou City in January 2016. Zhejiang Kandi Technologies has 45% ownership interest in Kandi Hainan, and Kandi New Energy has the remaining 55% ownership interest.

In December 2017, Zhejiang Kandi Technologies and the sole shareholder of Jinhua An Kao Power Technology Co., Ltd. (“Jinhua An Kao”) entered into a Share Transfer Agreement and a Supplementary Agreement, pursuant to which Zhejiang Kandi Technologies acquired 100% equity of Jinhua An Kao. In June 2020, Jinhua An Kao changed its name to Kandi Smart Battery Swap.

On May 31, 2018, the Company entered into a Membership Interests Transfer Agreement (the “Transfer Agreement”) with the two members of SC Autosports LLC (“SC Autosports”) (formerly known as: Sportsman Country, LLC) pursuant to which the Company acquired 100% of the ownership of SC Autosports.

On March 4, 2019, in order to build a logistics network composed of suppliers, manufacturers, warehouses, distribution centers and channel providers, meeting the needs of improving production and operation efficiency, the Company participated in the formation of Zhejiang Kandi Supply Chain Management Co., Ltd. (“Supply Chain Company”). Zhejiang Kandi Technologies has 10% ownership interest in Supply Chain Company, the remaining 90% is owned by unrelated other parties. As of the date of this report, Zhejiang Kandi Technologies has not made any capital contribution to Supply Chain Company since the contribution is not yet due as the relevant per PRC regulations, and is not involved in its operations. The Company deemed that Supply Chain Company is not a related party with the analysis in accordance with ASC 850-10.

In September 2020, in order to make full use of its dozens of patents in the field of battery swap systems and attract strategic investors to participate across the whole sector value chain, including battery swapping services and used battery recycling, the Company formed China Battery Exchange (Zhejiang) Technology Co., Ltd. (“China Battery Exchange”) and its subsidiaries. Zhejiang Kandi Technologies has 100% ownership interest in China Battery Exchange and its subsidiaries.

In September 2020, intending to explore ridesharing service business, the Company participated in the formation of Zhejiang Ruiheng Technology Co., Ltd (“Ruiheng”). Zhejiang Kandi Technologies has 10% ownership interest in Ruiheng, the remaining 90% is owned by unrelated other parties. The Company deemed that Ruiheng is not a related party with the analysis in accordance with ASC 850-10. Ruiheng was dissolved in November 2023; however, its subsidiary Hainan Ruigeng still operates under different group of shareholders and managements.

During January 2021, SC Autosports established a wholly owned subsidiary, Kandi America Investment, LLC (“Kandi Investment”) in Dallas.

On July 13, 2021, Zhejiang Kandi Technologies entered into a Share Transfer Agreement and Supplementary Agreement with three individual shareholders of Jiangxi Province Huiyi New Energy Co., Ltd. (“Jiangxi Huiyi”) to acquire 100% equity of Jiangxi Huiyi. The acquisition was consummated at October 31, 2021.

On February 15, 2022, Kandi Hainan and Jiangsu Xingchi Signed a joint venture agreement, the two parties jointly invested RMB 30,000,000 (approximately $4.6 million) in Haikou, Hainan (of which Kandi Hainan owns 66.7% and Jiangsu Xingchi owns 33.3%) to establish Hainan Kandi Holding New Energy Technology Co., Ltd. (“Hainan Kandi Holding”).

On June 17, 2023, SC Autosports entered into an equity transfer agreement with the owner of Northern Group, Inc. (“NGI”) to acquire 100% equity of NGI, and on March 12, 2024, the parties entered into a supplementary agreement to revise certain profit targets. The acquisition was consummated on November 30, 2023.

During September 27, 2023, SC Autosports established a wholly owned subsidiary, Kandi Technologies Canada Inc. (“Kandi Canada”) in Ontario, Canada.

On December 27, 2023, the shareholders of the Company approved the merger agreement and plan of merger, that the Company is to merge with and into Kandi BVI, with Kandi BVI as the surviving company upon the merger becoming effective in the second quarter of 2024 (the “Reincorporation”).

On January 1, 2024, the Company established a wholly-owned subsidiary, Kandi Electric Innovation, Inc. (“Kandi Innovation”), incorporated under the laws of the state of Nevada. Subsequently, SC Autosports became the wholly-owned subsidiary of Kandi Innovation, instead of being directly owned by the Company. 

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Liquidity

12 Months Ended

Dec. 31, 2023

Liquidity [Abstract]

LIQUIDITY

NOTE 2 - LIQUIDITY

The Company had working capital of $266,874,509  as of December 31, 2023, an increase of $19,057,384  from the working capital of $247,817,125 as of December 31, 2022. As of December 31, 2023 and December 31, 2022, the Company’s cash and cash equivalents were $33,756,941 and $84,063,717, respectively, and the Company’s restricted cash was $59,873,127 and $66,976,554, respectively. As of December 31, 2023 and December 31, 2022, the Company had multiple certificates of deposit with a total amount of $33,947,212 and $81,191,191, respectively. These certificates of deposit have an annual interest rate from 3.25% to 3.99% which can be transferred when necessary without any penalty or any loss of interest and principal.

Although the Company expects that most of its outstanding trade receivables from customers will be collected in the next twelve months, there are uncertainties with respect to the timing in collecting these receivables.

The Company’s primary need for liquidity stems from its need to fund working capital requirements of the Company’s businesses, its capital expenditures and its general operations, including debt repayment. The Company has historically financed its operations through short-term commercial bank loans from Chinese banks, as well as its ongoing operating activities by using funds from operations, external credit or financing arrangements. Currently the Company has sufficient cash in hand to meet the existing operational needs, but the credit line is retained and can be utilized timely when the Company has special capital needs. The PRC subsidiaries have $7.1 million short-term bank loans and the US subsidiaries have $2.0 million short-term bank loans and $8.4 million long-term bank loans outstanding as of December 31, 2023.

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Basis of Presentation

12 Months Ended

Dec. 31, 2023

Basis of Presentation [Abstract]

BASIS OF PRESENTATION

NOTE 3 - BASIS OF PRESENTATION

The Company’s financial statements and notes are the representations of the Company’s management. Accounting policies adopted by the Company conform to generally accepted accounting principles in the United States and have been consistently applied in the Company’s presentation of its financial statements.

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Principles of Consolidation

12 Months Ended

Dec. 31, 2023

Principles of Consolidation [Abstract]

PRINCIPLES OF CONSOLIDATION

NOTE 4 - PRINCIPLES OF CONSOLIDATION

The Company’s condensed consolidated financial statements reflect the accounts of the Company and its ownership interests in the following subsidiaries:

(1) Continental Development Limited (“Continental”), a wholly-owned subsidiary of the Company, incorporated under the laws of Hong Kong;

(2) Zhejiang Kandi Technologies, a wholly-owned subsidiary of Continental, incorporated under the laws of the PRC;

(3) Kandi New Energy Vehicle Co. Ltd. (“Kandi New Energy”), formerly, a 50%-owned subsidiary of Zhejiang Kandi Technologies (Mr. Hu Xiaoming owned the other 50%), incorporated under the laws of the PRC. Pursuant to agreements executed in January 2011, Mr. Hu Xiaoming contracted with Zhejiang Kandi Technologies for the operation and management of Kandi New Energy and put his shares of Kandi New Energy into escrow. As a result, Zhejiang Kandi Technologies was entitled to 100% of the economic benefits, voting rights and residual interests of Kandi New Energy. Effective March 14, 2022, Mr. Hu Xiaoming transferred his 50% equity interests of Kandi New Energy to Zhejiang Kandi Technologies. As a result, Kandi New Energy has become a wholly-owned subsidiary of Zhejiang Kandi Technologies;

(4) Kandi Electric Vehicles (Hainan) Co., Ltd. (“Kandi Hainan”), a subsidiary 55% owned by Kandi New Energy and 45% owned by Zhejiang Kandi Technologies, incorporated under the laws of the PRC;

(5) Zhejiang Kandi Smart Battery Swap Technology Co., Ltd (“Kandi Smart Battery Swap”), a wholly-owned subsidiary of Zhejiang Kandi Technologies, incorporated under the laws of the PRC;

(6) Yongkang Scrou Electric Co, Ltd. (“Yongkang Scrou”), a wholly-owned subsidiary of Kandi Smart Battery Swap, incorporated under the laws of the PRC;

(7) SC Autosports (d/b/a Kandi America), a wholly-owned subsidiary of the Company, formed under the laws of the State of Texas, USA;

(8) China Battery Exchange (Zhejiang) Technology Co., Ltd. (“China Battery Exchange”), a wholly-owned subsidiary of Zhejiang Kandi Technologies, and its subsidiaries, incorporated under the laws of the PRC;

(9) Kandi America Investment, LLC (“Kandi Investment”), a wholly-owned subsidiary of SC Autosports formed under the laws of the State of Texas, USA;

(10)	Jiangxi Province Huiyi New Energy Co., Ltd. (“Jiangxi Huiyi”) and its subsidiaries, a wholly-owned subsidiary of Zhejiang Kandi Technologies, incorporated under the laws of the PRC; and
(11)	Hainan Kandi Holding New Energy Technology Co., Ltd. (“Hainan Kandi Holding”), a subsidiary of Kandi Hainan, incorporated under the laws of the PRC; Kandi Hainan owns 66.7% and a non-affiliate, Jiangsu Xingchi owns 33.3% of  Hainan Kandi Holding. Consequently, effective February 15, 2022, non-controlling interests of an aggregate of 33.3% of the equity interests of Hainan Kandi Holding held by an entity are presented in the consolidated balance sheets, separately from equity attributable to the shareholders of the Company. Non-controlling interest in the results of the Company are presented on the consolidated statement of operations as an allocation of the total income or loss for the period between non-controlling interest holders and the shareholders of the Company;
(12)	Northern Group, Inc. (“NGI”), a wholly-owned subsidiary of SC Autosports formed under the laws of the State of Wisconsin, USA; and
(13)	Kandi Technologies Canada Inc. (“Kandi Canada”), a wholly-owned subsidiary of SC Autosports formed under the laws of Canada.

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Use of Estimates

12 Months Ended

Dec. 31, 2023

Use of Estimates [Abstract]

USE OF ESTIMATES

NOTE 5 - USE OF ESTIMATES

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and related disclosures of contingent assets and liabilities at the balance sheet date, and the reported revenues and expenses during the reported period in the consolidated financial statements and accompanying notes. Significant accounting estimates reflected in the Company’s consolidated financial statements primarily include, but are not limited to, allowances for doubtful accounts, lower of cost and net realizable value of inventory, assessment for impairment of long-lived assets and intangible assets, valuation of deferred tax assets, change in fair value of contingent consideration, determination of share-based compensation expenses as well as fair value of stock warrants.

Management bases the estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from these estimates.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2023

Summary of Significant Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 6 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Economic and Political Risks

Part of the Company’s operations are conducted in China. As a result, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in China, and by the general state of the Chinese economy. In addition, the Company’s earnings are subject to movements in foreign currency exchange rates when transactions are denominated in Renminbi (“RMB”), which is the Company’s functional currency. Accordingly, the Company’s operating results are affected by changes in the exchange rate between the U.S. dollar and the RMB.

The Company’s operations in China are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange restrictions. The Company’s performance may be adversely affected by changes in the political and social conditions in China, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.

(b) Fair Value of Financial Instruments

ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

These tiers include:

Level 1 — defined as observable inputs such as quoted prices in active markets;

Level 2 — defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

Level 3 — defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The Company’s financial instruments primarily consist of cash and cash equivalents, restricted cash, accounts receivable, notes receivable, other receivables, accounts payable, other payables and accrued liabilities, short-term bank loans, notes payable, and warrants.

The carrying value of cash and cash equivalents, restricted cash, accounts receivable, notes receivable, other receivables, accounts payable, other payables and accrued liabilities, and notes payable approximate fair value because of the short-term nature of these items. The estimated fair values of short-term bank loans were not materially different from their carrying value as presented due to the brief maturities and because the interest rates on these borrowings approximate those that would have been available for loans of similar remaining maturities and risk profiles. As the carrying amounts are reasonable estimates of fair value, these financial instruments are classified within Level 1 of the fair value hierarchy. The Company identified notes payable as Level 2 instruments due to the fact that the inputs to valuation are primarily based upon readily observable pricing information. The balance of notes payable, which were measured and disclosed at fair value, was $24,071,461 and $19,123,476 as of December 31, 2023 and December 31, 2022, respectively.

Contingent consideration related to the acquisitions of Jiangxi Huiyi and NGI, which is accounted for as liabilities, are measured at each reporting date for their fair value using Level 3 inputs. The fair value of contingent consideration was $2,693,000 and $1,803,000 as of December 31, 2023 and December 31, 2022, respectively. Also see Note 19.

(c) Cash and Cash Equivalents

The Company considers highly-liquid investments purchased with original maturities of three months or less to be cash equivalents.

(d) Restricted cash

Restricted cash primarily represents bank deposits for letter of credit and bank acceptance bill.

As of December 31, 2023 and December 31, 2022, the Company’s restricted cash was $59,873,127 and $66,976,554, respectively.

(e) Inventories

In the Company’s subsidiaries located in China, inventories are stated at the lower of cost or net realizable value (market value). The cost of raw materials is determined on the basis of weighted average. The cost of finished goods is determined on the basis of weighted average and comprises direct materials, direct labor and an appropriate proportion of overhead.

In the Company’s subsidiaries located in the United States, the Company values its vehicle products at the lower of specific cost or net realizable value to reflect the nature of the oversea trading operations. Specific cost consists of the amount paid to acquire the vehicle, plus the cost of transportation, custom, and duty. The cost of remaining inventory items is determined on the basis of weighted average.

Net realizable value is based on estimated selling prices less selling expenses and any further costs expected to be incurred for completion. Adjustments to reduce the cost of inventory to net realizable value are made, if required, for estimated excess, obsolescence, or impaired balances.

(f) Accounts Receivable

Accounts receivable are recognized and carried at net realizable value. The Company establishes provision for doubtful accounts when there is objective evidence that the Company may not be able to collect amounts due. Management reviews the adequacy of the provision for doubtful accounts on an ongoing basis, using historical collection trends and individual account analysis. The provision is based on management’s best estimates of specific losses on individual customer exposures, as well as historical trends of collections. Account balances are charged off against the provision after all means of collection have been exhausted and the likelihood of collection is not probable. An allowance for doubtful accounts is recorded for periods in which the Company determines credit losses are probable. In order to measure expected credit losses of the accounts receivable, the Company’s policy is to adopt aging method by reviewing and analyzing the aging of each customer, especially those with aged balances without any movement, and then assessing their financial conditions and payment plans. On top of the aging analysis, the Company also analyzed the nature and background of the customers, and analyzed the probability of recovery of the receivables. Accounts are written off after exhaustive collection efforts. If accounts receivable are to be provided for, or written off, they are recognized in the consolidated statement of operations within the operating expenses line item. If accounts receivable previously written off is recovered in a later period or when facts subsequently become available to indicate that the amount provided as an allowance for doubtful accounts was incorrect, an adjustment is made to restate allowance for doubtful accounts.

As of December 31, 2023 and December 31, 2022, credit terms with the Company’s customers were typically 60 to 180 days after delivery. The Company has agreements or purchase orders signed with the customers which state the payment term based on the scale of sales and background of the customers. The terms and agreements signed are legally enforceable. As of December 31, 2023 and 2022, the Company had $2,886,223 and $2,285,386 allowance for doubtful accounts, as per the Company management’s judgment based on their best knowledge. The Company conducts quarterly assessments of the state of the Company’s outstanding receivables and reserves any allowance for doubtful accounts if it becomes necessary.

The table below summarized the aging of the accounts receivable as of December 31, 2023 and 2022.

Aging of accounts receivable as of December 31, 2022	Outstanding balance		Subsequent collection(1)
1 to 90 days	$	17,696,095	$	17,269,833
91 to 180 days		1,863,518		1,775,104
Over 180 days		634,596		634,596
Over one year		1,104,456		258,981
Over two years		19,137,597		16,312,594
Total	$	40,436,262	$	36,251,108

Aging of accounts receivable as of December 31, 2023	Outstanding balance		Subsequent collection(1)
1 to 90 days	$	13,532,753	$	8,614,006
91 to 180 days		4,810,095		1,025,240
Over 180 days		142,122		111,448
Over one year		287,967		197,550
Over two years		3,065,031		49,506
Total	$	21,837,968	$	9,997,750

(1) the Company reviewed the subsequent collection until March 10, 2024.

(g) Notes Receivable

Notes receivable represent short-term loans to third parties with maximum terms of six months. Interest income is recognized according to each agreement between a borrower and the Company on an accrual basis. For notes receivable with banks, the interest rates are determined by banks. For notes receivable with other parties, the interest rates are based on agreements between the parties. If notes receivable are paid back, that transaction will be recognized in the relevant year. If notes receivable are not paid back, or are written off, that transaction will be recognized in the relevant year once default is probable, reasonably assured, and the loss can be reasonably estimated. The Company will recognize income if the written-off loan is recovered at a future date. In case of any foreclosure proceedings or legal actions, the Company provides an accrual for the related foreclosure and litigation expenses. If the Company decides to discount notes receivable for the purpose of receiving immediate cash, the current discount rate is approximately in the range of 1.5% to 2.2% annually depends on different banks. As of December 31, 2023 and 2022, the Company had notes receivable from unrelated parties of $124,473,111 and $434,461, respectively, which notes receivable typically mature within six months.

(h) Property, Plant and Equipment, net

Property, Plant and equipment are carried at cost less accumulated depreciation. Depreciation is calculated over the asset’s estimated useful life, using the straight-line method. Leasehold improvements are amortized over the life of the asset or the term of the lease, whichever is shorter. Estimated useful lives are as follows:

Buildings	20-40 years
Machinery and equipment	10 years
Office equipment	5 years
Motor vehicles	5 years
Molds	5 years

The costs and related accumulated depreciation of assets sold or otherwise retired are eliminated from the Company’s accounts and any gain or loss is included in the statements of income. The cost of maintenance and repairs is charged to expenses as incurred, whereas significant renewals and betterments are capitalized.

(i) Land Use Rights, net

Land in China is owned by the government and land ownership rights cannot be sold to an individual or to a private company. However, the Chinese government grants the user a “land use right” to use the land. The land use rights granted to the Company are amortized using the straight-line method over a term of fifty years.

The Company elected the practical expedient that permits the Company to carry forward the accounting treatment for land use rights in existing agreements as of the effective date of ASC 842.

Upon the adoption of ASC 842 on January 1, 2019, the new land use rights agreements signed beyond the effective date are identified as operating lease right-of-use assets, whereas the existing agreements as of the effective date are separately disclosed as “Land use rights” in the Company’s consolidated balance sheets.

(j) Accounting for the Impairment of Long-Lived Assets

The Company periodically evaluates the carrying value of long-lived assets to be held and used, including intangible assets subject to amortization, when events and circumstances warrant such a review, pursuant to the guidelines established in ASC Topic 360 Impairment or Disposal of Long-Lived Assets. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair market values are reduced for disposal costs.

The Company recognized impairment loss of $942,591 and $2,697,521 for finite-lived intangible assets as of December 31, 2023 and December 31, 2022, respectively.

(k) Revenue Recognition

The Company adopted ASC Topic 606 Revenue from Contracts with Customers with a date of the initial application of January 1, 2018 using the modified retrospective method. As a result, the Company has changed its accounting policy for revenue recognition. The impact of the adoption of ASC Topic 606 on the Company’s consolidated financial statements is not material.

The Company recognizes revenue when goods or services are transferred to customers in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contract with customer; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

The Company generates revenue through the sales of EV parts and off-road vehicles, as well as commission income. The revenue is recognized at a point in time once the Company has determined that the customer has obtained control over the product or the control of the promised services. Control is typically deemed to have been transferred to the customer when the performance obligation is fulfilled, usually at the time of delivery, at the net sales price (transaction price). Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. Shipping and handling costs for product shipments occur prior to the customer obtaining control of the goods are accounted for as fulfillment costs rather than separate performance obligations and recorded as sales and marketing expenses.

See Note 24 “Segment Reporting” for disaggregation of revenue by reporting segments. The Company believes this disaggregation best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

(l) Research and Development

Expenditures relating to the development of new products and processes, including improvements to existing products as well as research and development and consulting work performed by third parties, are expensed as incurred. Research and development expenses were $4,265,176 and $6,029,608 for the years ended December 31, 2023 and 2022, respectively.

(m) Government Grants

Government grants are recognized when there is reasonable assurance that: (1) the recipient will comply with the relevant conditions and (2) the grant will be received. After initial recognition, government grants are recognized in profit or loss on a systematic basis that mirrors the manner in which the Company recognizes the underlying costs for which the grant is intended to compensate. If some, or all, of a government grant becomes repayable (e.g. due to non-fulfillment of the grant conditions), then the repayment is accounted for prospectively as a change in accounting estimate. The effect of the change in estimate is recognized in the period in which management concludes that it is no longer reasonably assured that all of the grant conditions will be met. A corresponding financial liability is recognized for the amount of the repayment.

For the years ended December 31, 2023 and 2022, $2,017,551 and $1,639,328, respectively, were received by the Company’s subsidiaries from the Chinese government.

(n) Income Taxes

The Company accounts for income tax using an asset and liability approach, which allows for the recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred income taxes are recognized for differences between the financial reporting and tax bases of assets and liabilities at enacted tax rates in effect for the years in which the differences are expected to reverse. The accounting for deferred tax calculation represents the Company management’s best estimate of the most likely future tax consequences of events that have been recognized in our financial statements or tax returns and related future anticipation. A valuation allowance is recorded to reduce the deferred tax assets to an amount that is more likely than not to be realized after considering all available evidence, both positive and negative.

(o) Foreign Currency Translation

The accompanying consolidated financial statements are presented in United States dollars. The functional currency of the Company is the Renminbi (RMB). Capital accounts of the consolidated financial statements are translated into United States dollars from RMB at their historical exchange rates when the capital transactions occurred.

Assets and liabilities are translated at the exchange rates as of balance sheet date. Income and expenditures are translated at the average exchange rate of the reporting period, which rates are obtained from the website: http://www.oanda.com

	December 31,		December 31,
	2023		2022
Period end RMB : USD exchange rate		7.0698		6.8973
Average RMB : USD exchange rate		7.0727		6.7284

(p) Comprehensive Income (Loss)

Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income (loss) are required to be reported in a financial statement that is presented with the same prominence as other financial statements. Comprehensive income (loss) includes net income (loss) and the foreign currency translation changes.

(q) Segments

In accordance with ASC 280-10, Segment Reporting, the Company’s chief operating decision maker (“CODM”), identified as the Company’s Chief Executive Officer, relies upon the consolidated results of operations as a whole when making decisions about allocating resources and assessing the performance of the Company. As a result of the assessment made by CODM, the Company has only one reportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting. As the Company’s long-lived assets are substantially located in the PRC, no geographical segments are presented.

(r) Stock Option Expenses

The Company’s stock option expenses are recorded in accordance with ASC 718 and ASC 505.

The fair value of stock options is estimated using the Binomial Tree model. The Company’s expected volatility assumption is based on the historical volatility of the Company’s common stock. The expected life assumption is primarily based on the expiration date of the option. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The recognition of stock option expenses is based on awards expected to vest.

The stock-based option expenses for the years ended December 31, 2023 and 2022 were $3,476,058 and $1,231,566, respectively. There were no forfeitures estimated during the reporting period.

(s) Goodwill

The Company allocates goodwill from business combinations to reporting units based on the expectation that the reporting unit is to benefit from the business combination. The Company evaluates its reporting units on an annual basis and, if necessary, reassigns goodwill using a relative fair value allocation approach. Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit.

Application of the goodwill impairment test requires judgments, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and the determination of the fair value of each reporting unit. The Company first assesses qualitative factors to determine whether it is more likely than not that goodwill is impaired. If the more likely than not threshold is met, the Company performs a quantitative impairment test.

The Company applies the reporting unit criteria in ASC 350-20 to the components to determine if the reporting unit should be identified one level below the operating segment. Each component will be evaluated to determine if: (a) it is a business (as defined in ASC 805), (b) discrete financial information is available and (c) the operating results are regularly reviewed by the segment manager(s). If the components of a specific operating segment meet these criteria, they might be deemed to be separate reporting units. However, if they have similar economic characteristics (which is a matter of judgment based on individual facts and circumstances), these components must be aggregated into one reporting unit. There are four reporting units under the goodwill impairment analysis, namely 1) SC Autosports, 2) Jinhua An kao and Yongkang Scrou, 3) Jiangxi Huiyi, and 4) NGI.

As of December 31, 2023 and 2022, the Company performed goodwill impairment testing at the reporting unit level and recognized impairment loss of $496,981 and $642,665, respectively.

(t) Intangible Assets

Intangible assets consist of patent, trade names, customer relations and technology associated with the purchase price from the allocation of Kandi Smart Battery Swap, Jiangxi Huiyi, Hainan Kandi Holding and NGI. Such assets are being amortized over their estimated useful lives. Intangible assets were amortized as of December 31, 2023. The amortization expenses for intangible assets were $1,489,657 and $1,965,490 for the years ended December 31, 2023 and 2022, respectively.

The Company recognized impairment loss of $942,591 and $2,697,521 for finite-lived intangible assets as of December 31, 2023 and December 31, 2022, respectively.

(u) Accounting for Sale of Common Stock and Warrants

In connection of the issuance of common stocks, the Company may issue options or warrants to purchase common stock. Warrants classified as equity are initially recorded at fair value and subsequent changes in fair value are not recognized as long as the warrants continue to be classified as equity.

(v) Consolidation of variable interest entities

In accordance with accounting standards regarding consolidation of variable interest entities, or VIEs, VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision making ability. All VIEs with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes.

Based on the contractual arrangements, Kandi New Energy had been deemed as a VIE and that the Company’s wholly-owned subsidiary, Zhejiang Kandi Technologies, absorbs all risk of loss from the activities of this VIE, thereby enabling the Company, through Zhejiang Kandi Technologies, to receive all of its expected residual returns. Therefore, although Kandi Technologies only owns 50% equity in Kandi New Energy, for accounting purpose, Kandi Technologies is the sole beneficiary and shall be wholly included in the consolidation.

Additionally, because Kandi New Energy is under common control with other entities, the consolidated financial statements have been prepared as if the transactions had occurred retroactively as to the beginning of the reporting period of these consolidated financial statements.

Control and common control are defined under the accounting standards as “an individual, enterprise, or immediate family members who hold more than 50 percent of the voting ownership interest of each entity.” Because the owners collectively owned 100% of Kandi New Energy, and had agreed to vote their interests in concert since the establishment of each of these three companies as memorialized in the Voting Rights Proxy Agreement, the Company believes that the owners collectively have control and common control of Kandi New Energy. Accordingly, the Company believes that Kandi New Energy was constructively held under common control by Zhejiang Kandi Technologies as of the time the contractual agreements were entered into, establishing Zhejiang Kandi Technologies as their primary beneficiary. Zhejiang Kandi Technologies, in turn, is owned by Continental, which is owned by the Company.

The Company has completed the conversion of Kandi New Energy to a wholly-owned subsidiary of Zhejiang Kandi Technologies, effective March 14, 2022. The Company no longer has any VIE subsequent to March 14, 2022. There was no other VIE contractual arrangements during the year ended December 31, 2023.

For accounting purpose, the tables below are condensed consolidating schedules summarizing separately the results of operations, financial position and cash flows of the parent company including non-VIE subsidiaries and Kandi New Energy, which was deemed as an VIE since the Company only owned 50% of the equity, and control Kandi New Energy through several contractual agreements prior to its conversion to a wholly-owned subsidiary of Zhejiang Kandi Technologies effective March 14, 2022, together with eliminating adjustments:

Consolidated Statements of Operations Information

	For the year ended December 31, 2022
	Parent including non-VIE subsidiaries			VIE*		Elimination		Consolidated
Revenues	$	117,813,049		$	-	$	-	$	117,813,049
Gross profit	$	19,517,726		$	-	$	-	$	19,517,726
Loss from operations	$	(27,679,432	)	$	-	$	-	$	(27,679,432	)
Loss before income taxes	$	(13,338,534	)	$	-	$	-	$	(13,338,534	)
Net loss	$	(12,851,024	)	$	-	$	-	$	(12,851,024	)

* Effective March 14, 2022, the Company has completed the conversion of Kandi New Energy to a wholly-owned subsidiary of Zhejiang Kandi Technologies and the VIE agreements were terminated. The Company no longer has any VIE as of the date of this report.

Consolidated Balance Sheets Information

	As of December 31, 2022
	Parent including non-VIE subsidiaries		VIE*		Elimination		Consolidated
Cash and cash equivalents	$	84,063,717	$	-	$	-	$	84,063,717
Total current assets	$	329,322,973	$	-	$	-	$	329,322,973
Total non-current assets	$	153,659,303	$	-	$	-	$	153,659,303
Total current liabilities	$	81,505,848	$	-	$	-	$	81,505,848
Total non-current liabilities	$	3,783,457	$	-	$	-	$	3,783,457
Total stockholders’ equity	$	397,692,971	$	-	$	-	$	397,692,971

* Effective March 14, 2022, the Company has completed the conversion of Kandi New Energy to a wholly-owned subsidiary of Zhejiang Kandi Technologies and the VIE agreements were terminated. The Company no longer has any VIE as of the date of this report.

Percentage of VIE’s assets and liabilities compared to consolidated assets and liabilities

	As of December 31, 2022
	Parent including non-VIE subsidiaries		Consolidated		% of VIE’s assets and liabilities in consolidated assets and liabilities
Cash and cash equivalents	$	84,063,717	$	84,063,717		-
Total current assets	$	329,322,973	$	329,322,973		-
Total non-current assets	$	153,659,303	$	153,659,303		-
Total current liabilities	$	81,505,848	$	81,505,848		-
Total non-current liabilities	$	3,783,457	$	3,783,457		-
Total stockholders’ equity	$	397,692,971	$	397,692,971		-

* Effective March 14, 2022, the Company has completed the conversion of Kandi New Energy to a wholly-owned subsidiary of Zhejiang Kandi Technologies and the VIE agreements were terminated. The Company no longer has any VIE as of the date of this report.

Consolidated Cash Flows Information

	For the year ended December 31, 2022
	Parent including non-VIE subsidiaries			VIE*		Elimination		Consolidated
Net cash provided by operating activities	$	31,478,911		$	-	$	-	$	31,478,911
Net cash used in investing activities	$	(35,031,115	)	$	-	$	-	$	(35,031,115	)
Net cash used in financing activities	$	(4,333,088	)	$	-	$	-	$	(4,333,088	)

* Effective March 14, 2022, the Company has completed the conversion of Kandi New Energy to a wholly-owned subsidiary of Zhejiang Kandi Technologies and the VIE agreements were terminated. The Company no longer has any VIE as of the date of this report.

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New Accounting Pronouncements

12 Months Ended

Dec. 31, 2023

New Accounting Pronouncements [Abstract]

NEW ACCOUNTING PRONOUNCEMENTS

NOTE 7 - NEW ACCOUNTING PRONOUNCEMENTS

Accounting Pronouncements Adopted

In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805) – Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, as if it had originated the contracts. Prior to this ASU, an acquirer generally recognizes contract assets acquired and contract liabilities assumed that arose from contracts with customers at fair value on the acquisition date. The ASU is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The ASU is applied prospectively to business combinations occurring on or after the effective date of the amendment (or if adopted early as of an interim period, as of the beginning of the fiscal year that includes the interim period of early application). The Company has adopted this accounting pronouncement from January 1, 2023, and there was no material impact on its consolidated financial statements from the adoption.

Issued Accounting Standards Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in the ASU require that a public entity discloses, on an annual and interim basis, significant segment expenses that are regularly provided to an entity’s chief operating decision maker (“CODM”), a description of other segment items by reportable segment, and any additional measures of a segment’s profit or loss used by the CODM when deciding how to allocate resources. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Retrospective application is required for all prior periods presented, and early adoption is permitted. The Company does not expect the adoption of ASU No. 2023-07 to have a material impact on the Company’s consolidated financial statements or disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes: Improvements to Income Tax Disclosures. This guidance requires consistent categories and greater disaggregation of information in the rate reconciliation and disclosures of income taxes paid by jurisdiction. The guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and should be applied either prospectively or retrospectively. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures.

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Concentrations

12 Months Ended

Dec. 31, 2023

Concentrations [Abstract]

CONCENTRATIONS

NOTE 8 - CONCENTRATIONS

(a) Customers

For the years ended December 31, 2023 and 2022, the Company’s major customers, who accounted for more than 10% of the Company’s consolidated revenue, were as follows:

	Sales			Trade Receivable
	Year Ended
	December 31，			December 31，			December 31，
Major Customers	2023			2023			2022
Customer A		26	%		1	%		1	%
Customer B		19	%		4	%		-
Customer C		11	%		4	%		-

	Sales			Trade Receivable
	Year Ended
	December 31,			December 31,			December 31,
Major Customers	2022			2022			2021
Customer A		26	%		1	%		-

(b) Suppliers

For the years ended December 31, 2023 and 2022, the Company’s material suppliers, each of whom accounted for more than 10% of the Company’s total purchases, were as follows:

	Purchases			Accounts Payable
	Year Ended
	December 31，			December 31，			December 31，
Major Suppliers	2023			2023			2022
Zhejiang Kandi Supply Chain Management Co., Ltd.(1)		20	%		26	%		32	%

	Purchases			Accounts Payable
	Year Ended
	December 31,			December 31,			December 31,
Major Suppliers	2022			2022			2021
Zhejiang Kandi Supply Chain Management Co., Ltd.(1)		22	%		32	%		11	%

(1) Zhejiang Kandi Technologies owns 10% equity interest of the supplier.

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Earnings (Loss) Per Share

12 Months Ended

Dec. 31, 2023

Earnings (Loss) Per Share [Abstract]

EARNINGS (LOSS) PER SHARE

NOTE 9 - EARNINGS (LOSS) PER SHARE

The Company calculates earnings (loss) per share in accordance with ASC 260, Earnings Per Share, which requires a dual presentation of basic and diluted earnings (loss) per share. Basic earnings (loss) per share are computed using the weighted average number of shares outstanding during the reporting period. Diluted earnings (loss) per share represents basic earnings (loss) per share adjusted to include the potentially dilutive effect of outstanding stock options and warrants (using treasury stock method).

Due to the average market price of the common stock during the period being below the exercise price of certain options and warrants, approximately 968,019 options and 8,131,332 warrants that were wholly expired in May 2023 were excluded from the calculation of diluted earnings per share, for the year ended December 31, 2023. There were dilutive effects of 1,121,797 shares for 3,333,339 stock options granted on September 7, 2022, at an exercise price of $2.07 per share, for the year ended December 31, 2023.

Due to the net loss for the year ended December 31, 2022, approximately 5,900,000 options and 8,131,332 warrants were excluded from the calculation of diluted loss per share, for the year ended December 31, 2022. 

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Accounts Receivable, Net

12 Months Ended

Dec. 31, 2023

Accounts Receivable, Net [Abstract]

ACCOUNTS RECEIVABLE, NET

NOTE 10 - ACCOUNTS RECEIVABLE, NET

Accounts receivable are summarized as follows:

	December 31,			December 31,
	2023			2022
Accounts receivable	$	21,837,968		$	40,436,262
Less: allowance for doubtful accounts		(2,886,223	)		(2,285,386	)
Accounts receivable, net	$	18,951,745		$	38,150,876

The following table sets forth the movement of provision for doubtful accounts:

	Allowance for Doubtful Accounts
BALANCE AT DECEMBER 31, 2021	$	3,053,277
Provision		456,974
Recovery		(999,775	)
Exchange rate difference		(225,090	)
BALANCE AT DECEMBER 31, 2022	$	2,285,386
Provision		690,236
Recovery		(33,906	)
Exchange rate difference		(55,493	)
BALANCE AT DECEMBER 31, 2023	$	2,886,223

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Inventories

12 Months Ended

Dec. 31, 2023

Inventories [Abstract]

INVENTORIES

NOTE 11 - INVENTORIES

Inventories are summarized as follows:

	December 31,		December 31,
	2023		2022
Raw material	$	6,248,888	$	6,551,450
Work-in-progress		4,061,146		4,114,550
Finished goods and finished goods on consignment*		51,241,234		29,809,366
Inventories	$	61,551,268	$	40,475,366

* As of December 31, 2023, approximately $50.5 million of finished goods and finished goods on consignment of off-roads and EVs held by SC Autosports were pledged as collateral for the $2,000,000 short-term loan.

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Notes Receivable

12 Months Ended

Dec. 31, 2023

Notes Recievable [Abstract]

NOTES RECEIVABLE

NOTE 12 - NOTES RECEIVABLE

Notes receivable are summarized as follows:

	December 31,			December 31,
	2023			2022
Notes receivable as below:
Bank acceptance notes	$	-		$	434,461
Commercial acceptance notes		124,473,111	*		-
Notes receivable	$	124,473,111		$	434,461

* As of December 31, 2023, there was $124,473,111 notes receivable from unrelated parties, among which $60.8 million was due on January 3, 2024 and $63.7 million was due on January 5, 2024. By end of January 2024, $124,473,111 notes receivable was wholly settled with cash collection subsequently.

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Property, Plant and Equipment

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT

NOTE 13 - PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment as of December 31, 2023 and 2022 consisted of the following:

	December 31,			December 31,
	2023			2022
At cost:
Buildings(1)	$	61,964,058		$	49,239,626
Machinery and equipment(2)		74,520,599			77,845,979
Office equipment		1,474,944			1,528,135
Motor vehicles and other transport equipment		695,383			1,810,825
Molds and others		13,011,196			10,983,573
		151,666,180			141,408,138
Less : Accumulated depreciation		(52,862,408	)		(44,239,385	)
Property, plant and equipment, net	$	98,803,772		$	97,168,753

The Company’s Jinhua factory completed the relocation to a new industrial park in April 2021. The new location covers an area of more than 58,000 square meters and a construction area of more than 96,000 square meters. The Company’s off-road vehicles, EV battery packs, electric scooters battery packs, smart battery swap system and some EV parts are manufactured in the Jinhua factory. The Company’s Jinhua factory owns the above production facilities. The  Company’s  EV products, EV parts and electrical off-road vehicles, including Neighborhood EVs (“NEVs”), pure electric utility vehicles (“UTV”), pure electric golf cart and EV parts are manufactured in the Hainan factory. The Company’s Hainan factory expects to have production capacity with an annual output (three shifts) of 100,000 units of various models of EV products, EV parts and electrical off-road vehicles and owns the above facilities. As of December 31, 2023, the Hainan factory has passed the completion acceptance inspection.

Depreciation expenses for the years ended December 31, 2023 and 2022 were $10,141,120 and $10,165,138, respectively.

(1)	As of December 31, 2023, approximately $12.4 million of buildings held by Kandi Investment were pledged as collateral for the $8,178,574 long-term loan.
(2)	As of December 31, 2023, machinery and equipment with carrying value totaling approximately $24.2 million were pledged to banks as collateral for credit limits and loans.

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Intangible Assets

12 Months Ended

Dec. 31, 2023

Intangible Assets [Abstract]

INTANGIBLE ASSETS

NOTE 14 - INTANGIBLE ASSETS

Intangible assets include acquired other intangibles of trade name, customer relations, patent and technology recorded at estimated fair values in accordance with purchase accounting guidelines for acquisitions.

The following table provides the gross carrying value and accumulated amortization for each major class of our intangible assets, other than goodwill:

	Remaining	December 31,			December 31,
	useful life	2023			2022
Cost:
Patent	1.5-3.17 years	$	4,818,262			4,938,765
Technology	3-5 years		9,759,823			10,003,915
Customer relation	2.92 years		1,030,000			-
			15,608,085			14,942,680
Less : Accumulated amortization
Patent		$	(3,281,463	)		(2,744,024	)
Technology			(2,391,950	)		(1,573,079	)
Customer relation			(28,611	)		-
			(5,702,024	)		(4,317,103	)
Less : Accumulated impairment for intangible assets			(3,510,236	)		(2,631,465	)
Intangible assets, net		$	6,395,825		$	7,994,112

The aggregate amortization expenses for those intangible assets that continue to be amortized is reflected in amortization of intangible assets in the Consolidated Statements of Income and Comprehensive Income and were $1,489,657 and $1,965,490 for the year ended December 31, 2023 and 2022, respectively.

Amortization expenses for the next five years and thereafter are as follows:

Years ended December 31,
2024	$	1,718,689
2025		1,657,930
2026		1,426,023
2027		820,390
2028		772,793
Thereafter		-
Total	$	6,395,825

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Land Use Rights

12 Months Ended

Dec. 31, 2023

Land Use Rights [Abstract]

LAND USE RIGHTS

NOTE 15 - LAND USE RIGHTS

The Company’s land use rights consist of the following:

	December 31,			December 31,
	2023			2022
Cost of land use rights	$	3,716,267		$	3,809,211
Less: Accumulated amortization		(961,825	)		(899,261	)
Land use rights, net	$	2,754,442		$	2,909,950

The amortization expense for the years ended December 31, 2023 and 2022 were $84,471 and $88,794, respectively.

Amortization expense for the next five years and thereafter is as follows:

Years ended December 31,
2024	$	84,471
2025		84,471
2026		84,471
2027		84,471
2028		84,471
Thereafter		2,332,087
Total	$	2,754,442

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Other Long-Term Assets

12 Months Ended

Dec. 31, 2023

Other Long Term Assets [Abstract]

OTHER LONG-TERM ASSETS

NOTE 16 - OTHER LONG-TERM ASSETS

	December 31,		December 31,
	2023		2022
Prepayments for land use right (i)	$	3,738,418		3,917,226
Right - of - use asset (ii)		5,889,690		6,383,824
Others		365,022		329,861
Total other long-term asset	$	9,993,130	$	10,630,911

(i) As of December 31, 2023 and December 31, 2022, the Company’s other long term assets included net value of prepayments for land use right of Hainan facility of $3,738,418 and $3,917,226, respectively. As of December 31, 2023, the land use right of Hainan was not recognized since the land certificate is still in process. The amortization expense for the year ended December 31, 2023 and 2022 were $83,196 and $87,453, respectively.

(ii) As of December 31, 2023 and December 31, 2022, the Company’s operating lease right-of-use assets in other long term assets included net value of land use right of Jinhua facility acquired in October 2020 and Jiangxi facility acquired in October 2021 of $5,443,448 and $5,697,720, respectively, as well as the amount of $446,242 and $686,104 related to the lease of Hangzhou office starting January 1, 2022. The amortization expense of land use right of Jinhua facility and Jiangxi facility for the year ended December 31, 2023 and 2022 were $115,204 and $121,099, respectively.

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Taxes

12 Months Ended

Dec. 31, 2023

Taxes [Abstract]

TAXES

NOTE 17 - TAXES

(a) Corporation Income Tax

Pursuant to the tax laws and regulations of the PRC, the Company’s applicable corporate income tax (“CIT”) rate is 25%. However, Zhejiang Kandi Technologies, Kandi Smart Battery Swap, Jiangxi Huiyi and Kandi Hainan qualify as High and New Technology Enterprise (“HNTE”) companies in the PRC, and are entitled to a reduced income tax rate of 15% for the years presented. An HNTE Certificate is valid for three years. An entity may renew its HNTE certificate when the prior certificate expires. Historically, Zhejiang Kandi Technologies, Kandi Smart Battery Swap, Jiangxi Huiyi and Kandi Hainan have successfully renewed for such certificates when their prior certificates expired. Additionally, Hainan Kandi Holding also has an income tax rate of 15% due to its local preferred tax rate in Hainan Free Trade Port. The applicable CIT rate of each of the Company’s other PRC subsidiaries, Kandi New Energy, Yongkang Scrou, China Battery Exchange and its subsidiaries is 25%.

The Company’s provision or benefit from income taxes for interim periods is determined using an estimate of the Company’s annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter the Company updates its estimate of the annual effective tax rate, and if its estimated tax rate changes, management makes a cumulative adjustment. For 2023, the Company’s effective tax rate is favorably affected by a super-deduction for qualified research and development costs in China and adversely affected by non-deductible expenses such as stock rewards for non-US employees, add back of GILTI income and part of entertainment expenses. The Company records valuation allowances against the deferred tax assets associated with losses and other timing differences for which we may not realize a related tax benefit. After combining research and development tax credits of 25% on certain qualified research and development expenses, the Company’s effective tax rate for December 31, 2023 and 2022 was a tax expense of 51.92% on a reported income before taxes of approximately $3.5 million and a tax benefit of 3.65% on a reported loss before taxes of approximately $13.3 million, respectively. The effective tax rates for each of the periods mentioned above are disclosed in the summary table of income tax expenses for December 31, 2023 and 2022.

Under ASC 740 guidance relating to uncertain tax positions, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. As of December 31, 2023, the Company did not have any liability for unrecognized tax benefits. The Company files income tax returns with the U.S. Internal Revenue Services (“IRS”) and those states where the Company has operations. The Company is subject to U.S. federal or state income tax examinations by the IRS and relevant state tax authorities. During the periods open to examination, the Company has net operating loss carry forwards (“NOLs”) for U.S. federal and state tax purposes that have attributes from closed periods. Since these NOLs may be utilized in future periods, they remain subject to examination. The Company also files certain tax returns in the PRC. As of December 31, 2023, the Company was not aware of any pending income tax examinations by U.S. or PRC tax authorities. The Company records interest and penalties on uncertain tax provisions as income tax expense. As of December 31, 2023, the Company has no accrued interest or penalties related to uncertain tax positions.

Income tax expenses (benefit) for the year ended December 31, 2023 and 2022 are summarized as follows:

	For Year Ended
	December 31,
	2023		2022
Current:
Provision for CIT	$	1,599,668	$	(26,465	)
Deferred:
Provision for CIT		203,236		(461,045	)
Income tax expense (benefit)	$	1,802,904	$	(487,510	)

The reconciliation of taxes at the PRC statutory rate (25% in 2023 and 2022) to our provision for income taxes for the years ended December 31, 2023 and 2022 was as follows:

	For Year Ended
	December 31,
	2023			2022
Expected taxation at PRC statutory tax rate	$	1,885,374		$	(3,334,633)
Effect of differing tax rates in different jurisdictions		650,434			(81,257	)
Effect of PRC preferential tax rates		(2,471,114	)		790,053
Non-taxable income		(898,290	)		(1,984,855	)
Non-deductible expenses		3,830,387			2,315,146
Research and development super-deduction		(1,516,020	)		(1,672,428	)
Over-accrued EIT for previous years		(431	)		(538,545	)
Addition to valuation allowance		467,366			2,800,862
Foreign tax credit		(70,708	)		(84,045	)
Other (including intercompany transaction )		(74,094	)		1,302,192
Income tax expense (benefit)	$	1,802,904		$	(487,510	)

The tax effects of temporary differences that give rise to the Company’s net deferred tax assets and liabilities as of December 31, 2023 and December 31, 2022 are summarized as follows:

	December 31,			December 31,
	2023			2022
Deferred tax assets:
Accruals and reserves	$	6,388,121		$	6,759,952
Loss carried forward		9,412,846			8,547,725
Total deferred tax assets		15,800,967			15,307,677
Deferred tax liabilities:
Expense		(345,033	)		(212,143	)
Tangible		(218,406	)		(207,905	)
Intangible		(763,627	)		(1,146,339	)
Revenue		(1,222,344	)		(426,504	)
Total deferred tax liability		(2,549,410	)		(1,992,891	)
Net deferred tax assets	$	13,251,557		$	13,314,786
less: valuation allowance		(13,400,638	)		(13,260,631	)
Net deferred tax (liabilities) assets, net of valuation allowance	$	(149,081	)	$	54,155

The tax effected aggregate Net Operating Loss (“NOL”) was $9.4 million and $8.5 million in tax year 2023 and 2022, which were deriving from entities in the PRC and Hong Kong. Some of the NOLs will start to expire from 2026 if they are not used. The cumulative NOL in the PRC can be carried forward for five years in general, and ten years for entities qualify High and New Technology Enterprise (“HNTE”) treatment, which is $0.7 million and $8.6 million respectfully, to offset future net profits for income tax purposes.

The Company recorded valuation allowances of $13.4 million as of December 31, 2023, against the deferred tax assets associated with losses and other timing differences for which we may not realize a related tax benefit. Tax benefit of operating loss is evaluated on an ongoing basis including a review of historical and projected future operating results, the eligible carry forward period, and available tax planning strategies.

Income (loss) before income taxes from PRC and non-PRC sources for the year ended December 31, 2023 and 2022 are summarized as follows:

	For Year Ended
	December 31,
	2023			2022
Income (loss) before income taxes consists of:
PRC	$	23,550,796		$	(10,448,802	)
Non-PRC		(20,078,125	)		(2,889,732	)
Total	$	3,472,671		$	(13,338,534	)

Net change in the valuation allowance of deferred tax assets are summarized as follows:

Net change of valuation allowance of Deferred tax assets
Balance at December 31,2022	$	13,260,631
Additions-change to tax expense		467,366
Prior year true up		(5,478	)
Exchange rate difference		(321,881	)
Balance at December 31,2023	$	13,400,638

(b) Tax Holiday Effect

For the year ended December 31, 2023 and 2022, the PRC CIT rate was 25%. Certain subsidiaries of the Company are entitled to tax exemptions (tax holidays) for the years ended December 31, 2023 and 2022.

The combined effects of income tax expense exemptions and reductions available to the Company for the years ended December 31, 2023 and 2022 are as follows:

	Year Ended
	December 31,
	2023		2022
Tax benefit (holiday) credit	$	2,421,539	$	1,202,615
Basic net income per share effect	$	0.03	$	0.02

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Leases and Right-of-Use-Assets

12 Months Ended

Dec. 31, 2023

Leases and Right-of-Use-Assets [Abstract]

LEASES AND RIGHT-OF-USE-ASSETS

NOTE 18 - LEASES AND RIGHT-OF-USE-ASSETS

During October 2020, land use right of gross value of $3.5 million was acquired from the government as the new site of Jinhua Facility’s relocation as per the Repurchase Agreement. On October 31, 2021, the Company acquired $2.8 million of land use rights through the acquisition of Jiangxi Huiyi. This land use rights was wholly prepaid.

The Company has entered into a lease for Hangzhou office, with a term of 48 months from January 1, 2022 to December 31, 2025. The Company recorded operating lease assets and operating lease liabilities on January 1, 2022, with a remaining lease term of 48 months and discount rate of 3.70%. The annual lease payment for 2022 was prepaid as of January 1, 2022. As of December 31, 2023, the Company has paid the lease amount of both year 2022 and 2023 totaling $490,198.

The Company also elected to apply the short-term lease exception for lease arrangements with a lease term of 12 months or less at commencement. Lease terms used to compute the present value of lease payments do not include any option to extend, renew or terminate the lease that the Company is not able to reasonably certain to exercise upon the lease inception. Accordingly, operating lease right-of-use assets and liabilities do not include leases with a lease term of 12 months or less.

As of December 31, 2023, the Company’s operating lease right-of-use assets (grouped in other long-term assets on the balance sheet) was $5,889,690 and lease liability was $445,948 (grouped in other current liabilities and other long-term liabilities on the balance sheet). For the years ended December 31, 2023 and 2022, the Company’s operating lease expense were $338,233 and $355,541, respectively.

Supplemental information related to operating leases was as follows:

	Year Ended
	December 31,
	2023		2022
Cash payments for operating leases	$	338,233	$	355,541

Maturities of lease liabilities as of December 31, 2023 were as follow:

Maturity of Lease Liabilities:	Lease payable
Years ended December 31,
2024	$	218,924
2025		227,024

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Contingent Consideration Liability

12 Months Ended

Dec. 31, 2023

Contingent Consideration Liability [Abstract]

CONTINGENT CONSIDERATION LIABILITY

NOTE 19 - CONTINGENT CONSIDERATION LIABILITY

On July 19, 2021, Zhejiang Kandi Technologies signed a share transfer agreement and its supplementary agreement (“No.1 Supplementary Agreement”) with the former shareholders of Jiangxi Huiyi (the “Transferors”). On October 31, 2021, the Company completed the acquisition of 100% of the equity of Jiangxi Huiyi. Pursuant to the share transfer agreement, the Company paid approximately RMB 50 million (approximately $7.9 million) at the closing of the transaction using cash on hand and, as agreed upon under No.1 Supplementary Agreement, may be required to pay future consideration of up to an additional 2,576,310 shares of common stock, or the total make good shares, upon the achievement of certain net income-based milestones in the next three years (“Evaluation Period”, as discussed below). Due to the latest COVID-19 outbreak and extended lockdown in some areas in China, in June 2022, the Company agreed with the Transferors and jointly signed a No.2 supplementary agreement (“No.2 Supplementary Agreement”, collectively with No.1 Supplementary Agreement, “Supplementary Agreements”) to revise the conditions of the annual profit target and extension of evaluation period for the first year, which were set under No.1 Supplementary Agreement. Pursuant to the No.2 Supplementary Agreement, the Transferors have the right to obtain 858,770 KNDI shares in each of the below-mentioned periods, provided that Jiangxi Huiyi achieves a net income of 1) RMB 8 million yuan or more during the period from July 1, 2021 to September 30, 2022 (“Period I”); 2) RMB 15 million yuan or more during the period from October 1, 2022 to September 30, 2023 (“Period II”); 3) RMB 15 million yuan or more during the period from October 1, 2023 to September 30, 2024 (“Period III”). If the net income of Jiangxi Huiyi fails to reach the respective target number in any of the three periods, the shares that the Transferors are entitled to obtain in that period will be adjusted accordingly: 1) if the difference between the net income in each Period and its Target Number is less than or equivalent to 20% of its Target Number (RMB 8 Million in Period I or RMB 15 Million in Period II or Period III), the transferee or KNDI has right to directly subtract 171,754 KNDI shares from the total make good shares, and the Transferor are entitled to obtain 687,016 KNDI shares; 2) if the difference between the net income in each Period and its Target Number (RMB 8 Million in Period I or RMB 15 Million in Period II or Period III) is more than 20% of its Target Number but less than 40% of its Target Number, the transferee or KNDI has the right to directly subtract 343,508 KNDI shares from the total make good shares, and the Transferors have the right to obtain 515,262 KNDI shares; 3) if the difference between the net income in each Period and its Target Number (RMB 8 Million in Period I or RMB 15 Million in Period II or Period III) is greater than or equal to 40% of its Target Number, the transferee of KNDI has the right to directly subtract 858,770 KNDI shares from the total make good shares, and the Transferors will not have the right to obtain any shares in such year.

For the period from July 1, 2021 to September 30, 2022, Jiangxi Huiyi achieved its net profit target. Accordingly, the Transferors received 858,770 shares of Kandi’s restrictive common stock in October 2023.

In 2023, after evaluating the actual operation of Jiangxi Huiyi, the Company believes that taking over the management rights and conducting resources integration to combine Jiangxi Huiyi with the Company’s strategy are beneficial for improving the Company’s overall business performance. On August 3, 2023, Zhejiang Kandi Technologies and the Transferors signed an agreement on termination of make good shares (the “Termination Agreement”), pursuant to which the Supplementary Agreements were terminated. Zhejiang Kandi Technologies will take over the management rights while the Transferors shall not participate the management of Jiangxi Huiyi, and there was no further Evaluation Period or make good shares.

On November 30, 2023, SC Autosports acquired Northern Group, Inc. (“NGI”), a Wisconsin company, please refer to Note 25 – Acquisitions for more details.

On July 12, 2023, pursuant to the Equity Transfer Agreement, the Company issued a total of 3,951,368 shares of restrictive stock to sole shareholder of NGI, which are being held in escrow with certain escrow restrictions, to be released contingent upon the achievement of certain agreed-upon milestones during the escrow period.

The Company recorded contingent consideration liability of the estimated fair value of the contingent consideration the Company currently expects to pay to the Transferors for the achievement of the milestones. The fair value of the contingent consideration liability associated with remaining shares of restrictive common stock was estimated by using the Monte Carlo simulation method, which took into account all possible scenarios. This fair value measurement is classified as Level 3 within the fair value hierarchy prescribed by ASC Topic 820, Fair Value Measurement and Disclosures. In accordance with ASC Topic 805, Business Combinations, the Company will re-measure this liability each reporting period and record changes in the fair value through a separate line item within the Company’s consolidated statements of income.

As of December 31, 2023 and December 31, 2022, the Company’s contingent consideration liability was $2,693,000 and $1,803,000, respectively. 

Details of the contingent consideration liability as of December 31, 2023 and December 31, 2022 were as follow:

	December 31,		December 31,
	2023		2022
Contingent consideration liability to former members of Jiangxi Huiyi	$	-		1,803,000
Contingent consideration liability to former members of NGI		2,693,000		-
Total contingent consideration liability	$	2,693,000	$	1,803,000

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Common Shares

12 Months Ended

Dec. 31, 2023

Common Shares [Abstract]

COMMON SHARES

NOTE 20 - COMMON SHARES

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

On November 21, 2023, the board of directors had authorized the repurchase of up to $30 million worth of the Company’s common stock in open market transactions or in privately negotiated transactions. As of December 31, 2023, the Company had repurchased a total of 184,566 common shares at an average stock price of $2.75 per share under the repurchase plan.

Retirement of Treasury Shares

On June 9, 2023, the Board of Directors of the Company approved to retire 3,488,559 shares of its common stock held in treasury, and the retirement was completed in June, 2023. The shares were returned to the status of authorized but unissued shares. As a part of the retirement, the Company reduced its common stock and additional paid-in capital by $9,807,820.

Issuance of Shares

On May 25, 2023, the Company entered into a consulting agreement (“Consultant Agreement”) with a consulting firm to advise the Company on business growth and financial advisory services about which this consulting firm has knowledge or experience. Pursuant to the Consultant Agreement, the Company issued the consulting firm and its designees (the “Consultant”) an aggregate of 300,000 restricted shares of the Company’s common stock for its services from May 25, 2023 to May 24, 2024.

For the year ended December 31, 2023, the Company recognized $1,083,000 of expenses for stock issued to the Consultant, respectively.

On November 30, 2023, SC Autosports acquired NGI, a Wisconsin incorporated company, please refer to Note 25 – Acquisition for more details.

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Stock Options

12 Months Ended

Dec. 31, 2023

Stock Options [Abstract]

STOCK OPTIONS

NOTE 21 - STOCK OPTIONS

On September 7, 2022, the Compensation Committee of the Board of Directors of the Company approved the grant of stock options to purchase 5,000,000 shares of the Company’s common stock, at an exercise price of $2.07 per share, to the Company’s senior employees. The stock options will vest ratably over three years on October 7, 2023, October 7, 2024 and October 7, 2025, respectively, and expire on the tenth anniversary of the grant date. The Company valued the stock options at $6,704,829 and has amortized the stock compensation expense using the graded vesting method over the service period from September 7, 2022, through October 7, 2025. The value of the stock options was estimated using the Binomial Tree Model with an expected volatility of 79.83%, an expected life of 10 years, a risk-free interest rate of 3.27% and an expected dividend yield of 0.00%.

On July 1, 2023, the Compensation Committee of the Board of Directors of the Company approved the grant of stock options to purchase 68,019 shares of the Company’s common stock, at an exercise price of $3.96 per share, to the Company’s employees. The stock options will vest ratably over three years on July 1, 2024, July 1, 2025 and July 1, 2026, respectively, and expire on the tenth anniversary of the grant date. The Company valued the stock options at $172,601 and has amortized the stock compensation expense using the graded vesting method over the service period from July 1, 2023, to July 1, 2026. The value of the stock options was estimated using the Binomial Tree Model with an expected volatility of 78.08%, an expected life of 10 years, a risk-free interest rate of 3.81% and an expected dividend yield of 0.00%.

The following is a summary of the stock option activities of the Company:

	Number of Shares			Weighted Average Exercise Price
Outstanding as of December 31, 2021		900,000		$	9.72
Granted		5,000,000			2.07
Exercised		-			-
Cancelled		-			-
Forfeited		-			-
Outstanding as of December 31, 2022		5,900,000		$	3.24
Granted		68,019			3.96
Exercised		(1,666,661	)		2.07
Cancelled		-			-
Forfeited		-			-
Outstanding as of December 31, 2023		4,301,358		$	3.70

The fair value of each of the 900,000 options issued to the employees and directors on May 29, 2015 is $8.16 per share option. The fair value of each of the 5,000,000 options issued to the employees on September 7, 2022 is $1.34 per share. The fair value of each of the 68,019 options issued to the employees on July1, 2023 is $2.54 per share.

There were $3,476,058 and $1,231,566 in stock compensation expenses associated with stock options booked for the years ended December 31, 2023 and 2022, respectively.

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Stock Award

12 Months Ended

Dec. 31, 2023

Stock Award [Abstract]

STOCK AWARD

NOTE 22 - STOCK AWARD

In connection with the appointment of Mr. Henry Yu as a member of the Board of Directors (the “Board”), the Board authorized the Company to compensate Mr. Henry Yu with 5,000 shares of Company’s restricted common stock every six months as compensation, beginning in July 2011.

As compensation for Mr. Jerry Lewin’s services as a member of the Board, the Board authorized the Company to compensate Mr. Jerry Lewin with 5,000 shares of Company’s restricted common stock every six months, beginning in August 2011.

As compensation for Ms. Kewa Luo’s services as the Company’s investor relation officer, the Board authorized the Company to compensate Ms. Kewa Luo with 2,500 shares of the Company’s common stock every three months, beginning in September 2013.

On May 15, 2020, the Board appointed Mr. Jehn Ming Lim as the Chief Financial Officer. Mr. Lim was entitled to receive 6,000 shares of the common stock annually, which shall be issuable evenly on each six-month anniversary hereof. Mr. Lim was entitled to receive 10,000 shares of the common stock per year which shall be issuable evenly on each six-month anniversary as per the renewed contract effective on May 15, 2023.

On January 10, 2023, the Board appointed Dr. Xueqin Dong as the Chief Executive Officer, Dr. Dong was entitled to receive 20,000 shares of the common stock annually.

The fair value of stock awards with service condition is determined based on the closing price of the common stock on the date the shares are granted. The compensation costs for awards of common stock are recognized over the requisite service period.

On May 10, 2022, the Company granted 238,600 shares of common stock to certain management members and employees as compensation for their past services under the 2008 Plan. On April 29, 2023, May 5, 2023 and July 1, 2023 the Company granted 588,019 shares of common stock to certain management members and employees as compensation for their past services under the 2008 Plan.

On March 13, 2023, Kandi Technologies entered into an Equity Incentive Agreement (the “Equity Incentive Agreement”) with Pan Guoqing (the “Receiving Party”), who is the representative of the project management team of the project of crossover golf carts of Kandi Electric Vehicles (Hainan) Co., Ltd. (“Kandi EV Hainan”), a wholly owned subsidiary of the Company organized under the laws of the People’s Republic of China. The Receiving Party originally led the management team of golf crossover project of Hainan Kandi Holding New Energy Technology Co., Ltd. (“Hainan Kandi Holding”), a company organized under the laws of the People’s Republic of China. The Receiving Party and its management team has agreed to be employed as management team of Kandi EV Hainan, responsible for the operation of the golf crossover project of Kandi EV Hainan, and stop production and operation of Hainan Kandi Holding’s business.

Pursuant to the Equity Incentive Agreement, for the next three calendar years ending in December 31, 2025 (the “Incentive Period”), the Company will provide equity incentives to the Receiving Party, subject to the Receiving Party meeting certain performance milestones in its role as the management team of the golf crossover project (the “Crossover Project”) of Kandi EV Hainan. The performance milestones are measured in terms of the net profit of the Crossover Project after deducting relevant operating costs and income taxes, excluding various incentives, allowances and rebates, among others, and shall be audited and confirmed by the third party auditor designated by the granting party, or the Company. The net profit target (the “Net Profit Target”) for the Incentive Period is RMB 150 million (approximately $21,719,613), with an annual net profit target (the “Annual Net Profit Target”) of RMB 50 million (approximately $7,239,871). Should the Receiving Party meet or exceed the Net Profit Target over the Incentive Period, the Company will issue to the Receiving Party as incentive compensation up to a maximum of 5,957,811 shares (the “Maximum Equity Awards”) of the Company’s common stock (the “Award Shares”) under the Company’s 2008 Omnibus Long-Term Incentive Plan, as amended (the “2008 Plan”). The amount of Award Shares issued within each calendar year of the Vesting Period is adjusted based on the net profit of the Crossover Project within that calendar year. If the net profit of every of the three calendar years is below 60% of the Annual Net Profit Target, the Receiving Party will receive no Equity Awards. If the net profit of every of the three calendar years is at or above the Annual Net Profit Target, the Receiving Party will receive the Maximum Equity Awards, with higher performance resulting in receiving the Equity Awards earlier. If the net profit of every of the three calendar years fall between 60% of the Annual Net Profit Target and the Annual Net Profit Target, the Receiving Party will receive an amount of Equity Awards below the Maximum Equity Awards. On August 28, 2023, both parties agreed to issue 5,957,811 shares ahead of the original timeline due to the good performance achieved from January to July 2023. These shares are Restricted Shares under the 2008 Plan, to be to be vested upon the achievement of certain performance targets.

The Receiving Party has no relationship to the Company other than as described above.

On September 18, 2023, the Company issued a total of 5,957,811 Restricted Shares under the 2008 Plan but have not been vested to the relevant members of the project management team. For the year ended December 31, 2023, the Annual Net Profit Target of the Crossover Project was met. Accordingly, 1,985,937 shares of Kandi’s restricted common stock will be vested to the Receiving Party.

For the years ended December 31, 2023 and 2022, the Company recognized $6,500,743 and $694,810 of employee stock award expenses for stock compensation and annual incentive award under the 2008 Plan paid to Board members, management under General and Administrative Expenses, respectively.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 23 - COMMITMENTS AND CONTINGENCIES

Guarantees and pledged collateral for bank loans to other parties:

(1) Guarantees for bank loans

On March 15, 2013, the Company entered into a guarantee contract to serve as the guarantor of Nanlong Group Co., Ltd. (“NGCL”) for NGCL’s $2,828,934 (RMB 20 million) loan from Shanghai Pudong Development Bank Jinhua Branch, for a term from March 15, 2013 to March 15, 2016. NGCL is not related to the Company. Under this guarantee contract, the Company agreed to assume joint liability as the loan guarantor. In April 2017, Shanghai Pudong Development Bank filed a lawsuit against NGCL, the Company and ten other parties in Zhejiang Province People’s Court in Yongkang City, alleging NGCL defaulted on a bank loan borrowed from Shanghai Pudong Development Bank for a principal amount of approximately $2.9 million and demanded that the guarantor bear the liability for compensation. On May 27, 2017, a judicial mediation took place in Yongkang City and parties reached a settlement in mediation, in which the plaintiff agreed NGCL would repay the loan principal and interest in installments. The settlement was executed starting from May 2019. If there were an event of default that NGCL could not repay the loan, the Company may be obligated to bear the liability of defaulted amount. According to the current financial situation of NGCL, the Company does not expect it will incur any losses in connection with this matter.

(2) Pledged collateral for bank loans for which the parties other than the Company are the borrowers.

As of December 31, 2023 and December 31, 2022, none of the Company’s land use rights or plants and equipment were pledged as collateral securing bank loans for which the parties other than the Company are the borrowers.

Litigation

Beginning in March 2017, putative shareholder class actions were filed against Kandi Technologies Group, Inc. (“Kandi”) and certain of its current and former directors and officers in the United States District Court for the Central District of California and the United States District Court for the Southern District of New York. The complaints generally alleged violations of the federal securities laws based on Kandi’s disclosure in March 2017 that its financial statements for the years 2014, 2015 and the first three quarters of 2016 would need to be restated, and sought damages on behalf of putative classes of shareholders who purchased or acquired Kandi’s securities prior to March 13, 2017. Kandi moved to dismiss the remaining cases, all of which were pending in the New York federal court, that motion was granted in September 2019, and the time to appeal has run. In June 2020, a similar but separate putative securities class action was filed against Kandi and certain of its current and former directors and officers in California federal court. This action was transferred to the New York federal court in September 2020, Kandi moved to dismiss in March 2021, and that motion was granted in October 2021. The plaintiff in this case subsequently filed an amended complaint, Kandi moved to dismiss that complaint in January 2022, and the motion was granted in part and denied in part in September 2022. Discovery is ongoing as to the remaining claims and defendants.

Beginning in May 2017, purported shareholder derivative actions based on the same underlying events described above were filed against certain current and former directors of Kandi in the United States District Court for the Southern District of New York. The New York federal court confirmed the voluntary dismissal of these actions in April 2019.

In October 2017, a shareholder filed a books and records action against the Company in the Delaware Court of Chancery pursuant to 8 Del. C. Section 220 seeking the production of certain documents generally relating to the same underlying items described above as well as attorney’s fees (the “Section 220 Litigation”). On September 28, 2018, the parties, through their respective counsel, agreed to dismiss the Section 220 Litigation with prejudice and with each party bearing its own attorney’s fees, costs, and expenses, thereby concluding the action. In February 2019, this same shareholder commenced a derivative action against certain current and former directors of Kandi in the Delaware Court of Chancery. A motion to dismiss this derivative action was filed in May 2019 and that motion was denied on April 27, 2020. Discovery is ongoing.

Separately, in connection with allegations of misconduct identified in pre-suit demands made by putative shareholders of Kandi, Kandi formed a Special Litigation Committee (“SLC”) and retained a Delaware law firm as independent counsel to the SLC to aid in the SLC’s investigation of, and to ultimately report on, the allegations of misconduct set forth in the pre-suit demands. The SLC recommended to Kandi’s board of directors in June 2020 that the SLC be dissolved in light of the ongoing derivative action pending in the Delaware Court of Chancery, and this recommendation was adopted by the board in August 2020.

In December 2020, a putative securities class action was filed against Kandi and certain of its current officers in the United States District Court for the Eastern District of New York. The complaint generally alleges violations of the federal securities laws based on claims made in a report issued by Hindenburg Research in November 2020, and seeks damages on behalf of a putative class of shareholders who purchased or acquired Kandi’s securities prior to March 15, 2019. Kandi moved to dismiss in February 2022, and that motion remains pending.

While the Company believes that the claims in these litigations are without merit and will defend itself vigorously, the Company is unable to estimate the possible loss, if any, associated with these litigations. The ultimate outcome of any litigation is uncertain and the outcome of these matters, whether favorable or unfavorable, could have a negative impact on the Company’s financial condition or results of operations due to defense costs, diversion of management resources and other factors. Defending litigation can be costly, and adverse results in the litigations could result in substantial monetary judgments. No assurance can be made that litigation will not have a material adverse effect on the Company’s future financial position.

On September 21, 2023, the SEC filed a settled administrative order (the “Order”) against Kandi alleging violations of certain provisions of the United States’ securities laws. The Order sets forth certain findings, which the Company neither admits nor denies, regarding statements the Company made in its periodic filings and press releases that issued during the years 2020 and 2019. These statements concerned the Company’s then plans to sell highway passenger electric vehicles in the United States. Pursuant to the Order, the Company agreed to settle and completed the payment of the settlement of $710,000 by September 30, 2023. 

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Segment Reporting

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

SEGMENT REPORTING

NOTE 24 - SEGMENT REPORTING

The Company has one operating segment. The Company’s revenue and long-lived assets are primarily derived from and located in China and U.S. The Company does not have manufacturing operations outside of China.

The following table sets forth disaggregation of revenue:

	Year Ended December 31
	2023		2022
	Sales Revenue		Sales Revenue
Primary geographical markets
U.S. and other countries/areas	$	93,979,363	$	65,871,112
China		29,619,869		51,941,937
Total	$	123,599,232	$	117,813,049
Major products and Services
EV parts	$	5,807,973	$	8,964,094
EV products		1,214,786		7,926,233
Off-road vehicles and associated parts		106,983,891		70,622,278
Electric Scooters, Electric Self-Balancing Scooters and associated parts		683,952		4,616,683
Battery exchange equipment and Battery exchange service		674,927		1,691,486
Lithium-ion cells		7,994,227		23,992,275
Commission income		239,476		-
Total	$	123,599,232	$	117,813,049
Timing of revenue recognition
Products transferred at a point in time	$	123,359,756	$	117,813,049
Sales transactions completed at a point in time		239,476		-
Total	$	123,599,232	$	117,813,049

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Acquisitions

12 Months Ended

Dec. 31, 2023

Acquisitions [Abstract]

ACQUISITIONS

NOTE 25 - ACQUISITIONS

Acquisition of Northern Group Inc.

NGI, a Wisconsin incorporated company that was founded in 2000, has extensive sales experience and sales channels in the United States rooted in wholesale, retail, supply chain and analytics solutions, including more than 20 team members, 16 major retailers and 20 suppliers and brands.

On November 30, 2023, the Company, through SC Autosports, completed the acquisition of NGI pursuant to certain equity transfer agreement SC Autosports entered into with the owner of NGI to acquire 100% equity of NGI. The Company acquired all the equity interests of NGI for a purchase price of $13 million, in form of the Company’s restricted shares to the Transferors.  The Company shall issue a total of 3,951,368 restricted shares (which is calculated as the Transfer Value divided by the average closing price of the Company’s stock for the twenty trading days prior to June 1, 2023, i.e., $3.29 per share) of common stock, par value $0.001 (the “KNDI Stock”) of the Company to the Transferor, holding in escrow pending the satisfaction of the Profit Targets agreed upon.

On July 12, 2023, pursuant to the Equity Transfer Agreement, the Company issued a total of 3,951,368 shares of restrictive stock to sole shareholder of NGI, which are being held in escrow with certain escrow restrictions, to be released contingent upon the achievement of certain agreed-upon milestones during the escrow period.

Pursuant to the terms of the Equity Transfer Agreement and the Supplementary Agreement, dated as of March 12, 2024, the escrow restrictions on the KNDI Stock shall be removed sequentially based on the following conditions: 1) when NGI achieves pretax income of $4.6 million or more (“Profit Target I”) during the period from December 1, 2023 to November 30, 2024, 2,431,612 shares of KNDI Stock Transferor holds shall be fully vested by removing the escrow restriction. Notwithstanding the above, the Transferor, on December 31, 2023, can apply for vesting certain number of shares, but no more than 1,418,440 shares, with its value equal to the actual amount of pre-tax income achieved hereinunder (for example: if the pre-tax income is $3.5 million, 1,063,830 shares (3,500,000/3.29=1,063,830) shall be fully vested and without escrow restriction); 2) when NGI achieves pretax income of $5.25 million or more (“Profit Target II”) during the period from December 1, 2024 to November 30, 2025, 759,878 shares of KNDI Stock Transferor holds shall be fully vested by removing its escrow restriction; and 3) when NGI achieves pretax income of $6 million or more (“Profit Target III”, collectively with Profit Target I, and Profit Target II, “Profit Targets”) during the period from December 1, 2025 to November 30, 2026, 759,878 shares of KNDI Stock Transferor holds shall be fully vested by removing the escrow restriction. If NGI fails to reach any of the Profit Targets in any period as mentioned above, the number of KNDI Stock to be removed escrow restriction in that period shall be adjusted based on the percentage of the actual achieved pretax income. If there is any loss incurred in that period, the Transferor shall assume the loss.

As of the acquisition date, the Company recorded a contingent consideration liability of approximately $2.7 million, representing the estimated fair value of the contingent consideration the Company currently expects to pay to the NGI Transferors upon the achievement of certain Profit Targets aforementioned. The fair value of the contingent consideration liability associated with 3,951,368 shares of restrictive common stock was estimated by using Monte Carlo simulation method, which took into account all possible scenarios. This fair value measurement is classified as Level 3 within the fair value hierarchy prescribed by ASC Topic 820, Fair Value Measurement and Disclosures. In accordance with ASC Topic 805, Business Combinations, the Company will re-measure this liability each reporting period and record changes in the fair value through a separate line item within the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss).

The components of the preliminary purchase price as of the acquisition date for NGI are as follows:

	NGI
Fair value of contingent consideration	$	2,693,000
Total	$	2,693,000

The Company accounted for the acquisition as business combinations, in accordance with ASC Topic 805. The Company has recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The following summarizes the preliminary purchase price allocations:

	NGI
Goodwill	$	1,139,438
Amortizable intangible assets		1,030,000
Other net assets		523,562
Total	$	2,693,000

Transaction costs of $45,267 associated with the acquisition were expensed as incurred through general and administrative expenses in the statement of income in 2023.

The Company allocated the preliminary purchase price to specific intangible asset categories as of the acquisition date for NGI as follows:

	Amount Assigned		Estimated useful life (in years)
Amortizable intangible assets:
Customer relation	$	1,030,000		3

The Company allocated the preliminary purchase price to specific intangible assets for patents that the Company acquired. The Company believes that the estimated intangible asset value so determined represents the fair value on the date of acquisition and do not exceed the amount a third party would pay for the assets. The Company used the asset based approach to derive the fair value of the amortizable intangible assets. These fair value measurements are based on significant unobservable inputs, including estimates and assumptions and, accordingly, are classified as Level 3 within the fair value hierarchy prescribed by the ASC Topic 820.

The Company recorded the excess of the purchase price over the estimated fair values of the identified assets as goodwill, which is non-deductible for tax purposes. Goodwill was established due to primarily to revenue and earnings projections associated with NGI’s future operations, as well as synergies expected to be gained from the integration of the business into the Company’s existed operations.

The Company’s condensed consolidated financial statements included approximately $0.2 million of revenue and approximately $6,641 of operating income related to the operating results for NGI from its date of acquisition.

The following unaudited pro forma financial information presents the combined results of operations of Kandi and the Acquired Business as if the acquisition had occurred as of January 1, 2023. The pro forma information is not necessarily indicative of what the financial position or results of operations actually would have been had the acquisition been completed as of January 1, 2023. In addition, the unaudited pro forma financial information is not indicative of, nor does it purport to project, the future financial position or operation results of Kandi. The unaudited pro forma financial information excludes acquisition and integration costs and does not give effect to any estimated and potential cost savings or other operating efficiencies that could result from acquisition. For the year ended December 31, 2023, the unaudited pro forma combined statements of income information consists of the revenue with $127,578,305, loss from operations with $12,544,014 and net income with $2,177,924.

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Subsequent Event

12 Months Ended

Dec. 31, 2023

Subsequent Event [Abstract]

SUBSEQUENT EVENT

NOTE 26 - SUBSEQUENT EVENT

During January and February of 2024, the Company had repurchased a total of 540,362 common shares at an average stock price of $2.74 per share under the repurchase plan.

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Pay vs Performance Disclosure - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ 7,132	$ (12,123,663)

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Insider Trading Arrangements	3 Months Ended
	Dec. 31, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Accounting Policies, by Policy (Policies)

12 Months Ended

Dec. 31, 2023

Summary of Significant Accounting Policies [Abstract]

Economic and Political Risks

(a) Economic and Political Risks

Part of the Company’s operations are conducted in China. As a result, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in China, and by the general state of the Chinese economy. In addition, the Company’s earnings are subject to movements in foreign currency exchange rates when transactions are denominated in Renminbi (“RMB”), which is the Company’s functional currency. Accordingly, the Company’s operating results are affected by changes in the exchange rate between the U.S. dollar and the RMB.

The Company’s operations in China are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange restrictions. The Company’s performance may be adversely affected by changes in the political and social conditions in China, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.

Fair Value of Financial Instruments

(b) Fair Value of Financial Instruments

ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

These tiers include:

Level 1 — defined as observable inputs such as quoted prices in active markets;

Level 2 — defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

Level 3 — defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The Company’s financial instruments primarily consist of cash and cash equivalents, restricted cash, accounts receivable, notes receivable, other receivables, accounts payable, other payables and accrued liabilities, short-term bank loans, notes payable, and warrants.

The carrying value of cash and cash equivalents, restricted cash, accounts receivable, notes receivable, other receivables, accounts payable, other payables and accrued liabilities, and notes payable approximate fair value because of the short-term nature of these items. The estimated fair values of short-term bank loans were not materially different from their carrying value as presented due to the brief maturities and because the interest rates on these borrowings approximate those that would have been available for loans of similar remaining maturities and risk profiles. As the carrying amounts are reasonable estimates of fair value, these financial instruments are classified within Level 1 of the fair value hierarchy. The Company identified notes payable as Level 2 instruments due to the fact that the inputs to valuation are primarily based upon readily observable pricing information. The balance of notes payable, which were measured and disclosed at fair value, was $24,071,461 and $19,123,476 as of December 31, 2023 and December 31, 2022, respectively.

Contingent consideration related to the acquisitions of Jiangxi Huiyi and NGI, which is accounted for as liabilities, are measured at each reporting date for their fair value using Level 3 inputs. The fair value of contingent consideration was $2,693,000 and $1,803,000 as of December 31, 2023 and December 31, 2022, respectively. Also see Note 19.

Cash and Cash Equivalents

(c) Cash and Cash Equivalents

The Company considers highly-liquid investments purchased with original maturities of three months or less to be cash equivalents.

Restricted cash

(d) Restricted cash

Restricted cash primarily represents bank deposits for letter of credit and bank acceptance bill.

As of December 31, 2023 and December 31, 2022, the Company’s restricted cash was $59,873,127 and $66,976,554, respectively.

Inventories

(e) Inventories

In the Company’s subsidiaries located in China, inventories are stated at the lower of cost or net realizable value (market value). The cost of raw materials is determined on the basis of weighted average. The cost of finished goods is determined on the basis of weighted average and comprises direct materials, direct labor and an appropriate proportion of overhead.

In the Company’s subsidiaries located in the United States, the Company values its vehicle products at the lower of specific cost or net realizable value to reflect the nature of the oversea trading operations. Specific cost consists of the amount paid to acquire the vehicle, plus the cost of transportation, custom, and duty. The cost of remaining inventory items is determined on the basis of weighted average.

Net realizable value is based on estimated selling prices less selling expenses and any further costs expected to be incurred for completion. Adjustments to reduce the cost of inventory to net realizable value are made, if required, for estimated excess, obsolescence, or impaired balances.

Accounts Receivable

(f) Accounts Receivable

Accounts receivable are recognized and carried at net realizable value. The Company establishes provision for doubtful accounts when there is objective evidence that the Company may not be able to collect amounts due. Management reviews the adequacy of the provision for doubtful accounts on an ongoing basis, using historical collection trends and individual account analysis. The provision is based on management’s best estimates of specific losses on individual customer exposures, as well as historical trends of collections. Account balances are charged off against the provision after all means of collection have been exhausted and the likelihood of collection is not probable. An allowance for doubtful accounts is recorded for periods in which the Company determines credit losses are probable. In order to measure expected credit losses of the accounts receivable, the Company’s policy is to adopt aging method by reviewing and analyzing the aging of each customer, especially those with aged balances without any movement, and then assessing their financial conditions and payment plans. On top of the aging analysis, the Company also analyzed the nature and background of the customers, and analyzed the probability of recovery of the receivables. Accounts are written off after exhaustive collection efforts. If accounts receivable are to be provided for, or written off, they are recognized in the consolidated statement of operations within the operating expenses line item. If accounts receivable previously written off is recovered in a later period or when facts subsequently become available to indicate that the amount provided as an allowance for doubtful accounts was incorrect, an adjustment is made to restate allowance for doubtful accounts.

As of December 31, 2023 and December 31, 2022, credit terms with the Company’s customers were typically 60 to 180 days after delivery. The Company has agreements or purchase orders signed with the customers which state the payment term based on the scale of sales and background of the customers. The terms and agreements signed are legally enforceable. As of December 31, 2023 and 2022, the Company had $2,886,223 and $2,285,386 allowance for doubtful accounts, as per the Company management’s judgment based on their best knowledge. The Company conducts quarterly assessments of the state of the Company’s outstanding receivables and reserves any allowance for doubtful accounts if it becomes necessary.

The table below summarized the aging of the accounts receivable as of December 31, 2023 and 2022.

Aging of accounts receivable as of December 31, 2022	Outstanding balance		Subsequent collection(1)
1 to 90 days	$	17,696,095	$	17,269,833
91 to 180 days		1,863,518		1,775,104
Over 180 days		634,596		634,596
Over one year		1,104,456		258,981
Over two years		19,137,597		16,312,594
Total	$	40,436,262	$	36,251,108

Aging of accounts receivable as of December 31, 2023	Outstanding balance		Subsequent collection(1)
1 to 90 days	$	13,532,753	$	8,614,006
91 to 180 days		4,810,095		1,025,240
Over 180 days		142,122		111,448
Over one year		287,967		197,550
Over two years		3,065,031		49,506
Total	$	21,837,968	$	9,997,750

(1) the Company reviewed the subsequent collection until March 10, 2024.

Notes Receivable

(g) Notes Receivable

Notes receivable represent short-term loans to third parties with maximum terms of six months. Interest income is recognized according to each agreement between a borrower and the Company on an accrual basis. For notes receivable with banks, the interest rates are determined by banks. For notes receivable with other parties, the interest rates are based on agreements between the parties. If notes receivable are paid back, that transaction will be recognized in the relevant year. If notes receivable are not paid back, or are written off, that transaction will be recognized in the relevant year once default is probable, reasonably assured, and the loss can be reasonably estimated. The Company will recognize income if the written-off loan is recovered at a future date. In case of any foreclosure proceedings or legal actions, the Company provides an accrual for the related foreclosure and litigation expenses. If the Company decides to discount notes receivable for the purpose of receiving immediate cash, the current discount rate is approximately in the range of 1.5% to 2.2% annually depends on different banks. As of December 31, 2023 and 2022, the Company had notes receivable from unrelated parties of $124,473,111 and $434,461, respectively, which notes receivable typically mature within six months.

Property, Plant and Equipment, net

(h) Property, Plant and Equipment, net

Property, Plant and equipment are carried at cost less accumulated depreciation. Depreciation is calculated over the asset’s estimated useful life, using the straight-line method. Leasehold improvements are amortized over the life of the asset or the term of the lease, whichever is shorter. Estimated useful lives are as follows:

Buildings	20-40 years
Machinery and equipment	10 years
Office equipment	5 years
Motor vehicles	5 years
Molds	5 years

The costs and related accumulated depreciation of assets sold or otherwise retired are eliminated from the Company’s accounts and any gain or loss is included in the statements of income. The cost of maintenance and repairs is charged to expenses as incurred, whereas significant renewals and betterments are capitalized.

Land Use Rights, net

(i) Land Use Rights, net

Land in China is owned by the government and land ownership rights cannot be sold to an individual or to a private company. However, the Chinese government grants the user a “land use right” to use the land. The land use rights granted to the Company are amortized using the straight-line method over a term of fifty years.

The Company elected the practical expedient that permits the Company to carry forward the accounting treatment for land use rights in existing agreements as of the effective date of ASC 842.

Upon the adoption of ASC 842 on January 1, 2019, the new land use rights agreements signed beyond the effective date are identified as operating lease right-of-use assets, whereas the existing agreements as of the effective date are separately disclosed as “Land use rights” in the Company’s consolidated balance sheets.

Accounting for the Impairment of Long-Lived Assets

(j) Accounting for the Impairment of Long-Lived Assets

The Company periodically evaluates the carrying value of long-lived assets to be held and used, including intangible assets subject to amortization, when events and circumstances warrant such a review, pursuant to the guidelines established in ASC Topic 360 Impairment or Disposal of Long-Lived Assets. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair market values are reduced for disposal costs.

The Company recognized impairment loss of $942,591 and $2,697,521 for finite-lived intangible assets as of December 31, 2023 and December 31, 2022, respectively.

Revenue Recognition

(k) Revenue Recognition

The Company adopted ASC Topic 606 Revenue from Contracts with Customers with a date of the initial application of January 1, 2018 using the modified retrospective method. As a result, the Company has changed its accounting policy for revenue recognition. The impact of the adoption of ASC Topic 606 on the Company’s consolidated financial statements is not material.

The Company recognizes revenue when goods or services are transferred to customers in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contract with customer; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

The Company generates revenue through the sales of EV parts and off-road vehicles, as well as commission income. The revenue is recognized at a point in time once the Company has determined that the customer has obtained control over the product or the control of the promised services. Control is typically deemed to have been transferred to the customer when the performance obligation is fulfilled, usually at the time of delivery, at the net sales price (transaction price). Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. Shipping and handling costs for product shipments occur prior to the customer obtaining control of the goods are accounted for as fulfillment costs rather than separate performance obligations and recorded as sales and marketing expenses.

See Note 24 “Segment Reporting” for disaggregation of revenue by reporting segments. The Company believes this disaggregation best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

Research and Development

(l) Research and Development

Expenditures relating to the development of new products and processes, including improvements to existing products as well as research and development and consulting work performed by third parties, are expensed as incurred. Research and development expenses were $4,265,176 and $6,029,608 for the years ended December 31, 2023 and 2022, respectively.

Government Grants

(m) Government Grants

Government grants are recognized when there is reasonable assurance that: (1) the recipient will comply with the relevant conditions and (2) the grant will be received. After initial recognition, government grants are recognized in profit or loss on a systematic basis that mirrors the manner in which the Company recognizes the underlying costs for which the grant is intended to compensate. If some, or all, of a government grant becomes repayable (e.g. due to non-fulfillment of the grant conditions), then the repayment is accounted for prospectively as a change in accounting estimate. The effect of the change in estimate is recognized in the period in which management concludes that it is no longer reasonably assured that all of the grant conditions will be met. A corresponding financial liability is recognized for the amount of the repayment.

For the years ended December 31, 2023 and 2022, $2,017,551 and $1,639,328, respectively, were received by the Company’s subsidiaries from the Chinese government.

Income Taxes

(n) Income Taxes

The Company accounts for income tax using an asset and liability approach, which allows for the recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred income taxes are recognized for differences between the financial reporting and tax bases of assets and liabilities at enacted tax rates in effect for the years in which the differences are expected to reverse. The accounting for deferred tax calculation represents the Company management’s best estimate of the most likely future tax consequences of events that have been recognized in our financial statements or tax returns and related future anticipation. A valuation allowance is recorded to reduce the deferred tax assets to an amount that is more likely than not to be realized after considering all available evidence, both positive and negative.

Foreign Currency Translation

(o) Foreign Currency Translation

The accompanying consolidated financial statements are presented in United States dollars. The functional currency of the Company is the Renminbi (RMB). Capital accounts of the consolidated financial statements are translated into United States dollars from RMB at their historical exchange rates when the capital transactions occurred.

Assets and liabilities are translated at the exchange rates as of balance sheet date. Income and expenditures are translated at the average exchange rate of the reporting period, which rates are obtained from the website: http://www.oanda.com

	December 31,		December 31,
	2023		2022
Period end RMB : USD exchange rate		7.0698		6.8973
Average RMB : USD exchange rate		7.0727		6.7284

Comprehensive Income (Loss)

(p) Comprehensive Income (Loss)

Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income (loss) are required to be reported in a financial statement that is presented with the same prominence as other financial statements. Comprehensive income (loss) includes net income (loss) and the foreign currency translation changes.

Segments

(q) Segments

In accordance with ASC 280-10, Segment Reporting, the Company’s chief operating decision maker (“CODM”), identified as the Company’s Chief Executive Officer, relies upon the consolidated results of operations as a whole when making decisions about allocating resources and assessing the performance of the Company. As a result of the assessment made by CODM, the Company has only one reportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting. As the Company’s long-lived assets are substantially located in the PRC, no geographical segments are presented.

Stock Option Expenses

(r) Stock Option Expenses

The Company’s stock option expenses are recorded in accordance with ASC 718 and ASC 505.

The fair value of stock options is estimated using the Binomial Tree model. The Company’s expected volatility assumption is based on the historical volatility of the Company’s common stock. The expected life assumption is primarily based on the expiration date of the option. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The recognition of stock option expenses is based on awards expected to vest.

The stock-based option expenses for the years ended December 31, 2023 and 2022 were $3,476,058 and $1,231,566, respectively. There were no forfeitures estimated during the reporting period.

Goodwill

(s) Goodwill

The Company allocates goodwill from business combinations to reporting units based on the expectation that the reporting unit is to benefit from the business combination. The Company evaluates its reporting units on an annual basis and, if necessary, reassigns goodwill using a relative fair value allocation approach. Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit.

Application of the goodwill impairment test requires judgments, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and the determination of the fair value of each reporting unit. The Company first assesses qualitative factors to determine whether it is more likely than not that goodwill is impaired. If the more likely than not threshold is met, the Company performs a quantitative impairment test.

The Company applies the reporting unit criteria in ASC 350-20 to the components to determine if the reporting unit should be identified one level below the operating segment. Each component will be evaluated to determine if: (a) it is a business (as defined in ASC 805), (b) discrete financial information is available and (c) the operating results are regularly reviewed by the segment manager(s). If the components of a specific operating segment meet these criteria, they might be deemed to be separate reporting units. However, if they have similar economic characteristics (which is a matter of judgment based on individual facts and circumstances), these components must be aggregated into one reporting unit. There are four reporting units under the goodwill impairment analysis, namely 1) SC Autosports, 2) Jinhua An kao and Yongkang Scrou, 3) Jiangxi Huiyi, and 4) NGI.

As of December 31, 2023 and 2022, the Company performed goodwill impairment testing at the reporting unit level and recognized impairment loss of $496,981 and $642,665, respectively.

Intangible Assets

(t) Intangible Assets

Intangible assets consist of patent, trade names, customer relations and technology associated with the purchase price from the allocation of Kandi Smart Battery Swap, Jiangxi Huiyi, Hainan Kandi Holding and NGI. Such assets are being amortized over their estimated useful lives. Intangible assets were amortized as of December 31, 2023. The amortization expenses for intangible assets were $1,489,657 and $1,965,490 for the years ended December 31, 2023 and 2022, respectively.

The Company recognized impairment loss of $942,591 and $2,697,521 for finite-lived intangible assets as of December 31, 2023 and December 31, 2022, respectively.

Accounting for Sale of Common Stock and Warrants

(u) Accounting for Sale of Common Stock and Warrants

In connection of the issuance of common stocks, the Company may issue options or warrants to purchase common stock. Warrants classified as equity are initially recorded at fair value and subsequent changes in fair value are not recognized as long as the warrants continue to be classified as equity.

Consolidation of variable interest entities

(v) Consolidation of variable interest entities

In accordance with accounting standards regarding consolidation of variable interest entities, or VIEs, VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision making ability. All VIEs with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes.

Based on the contractual arrangements, Kandi New Energy had been deemed as a VIE and that the Company’s wholly-owned subsidiary, Zhejiang Kandi Technologies, absorbs all risk of loss from the activities of this VIE, thereby enabling the Company, through Zhejiang Kandi Technologies, to receive all of its expected residual returns. Therefore, although Kandi Technologies only owns 50% equity in Kandi New Energy, for accounting purpose, Kandi Technologies is the sole beneficiary and shall be wholly included in the consolidation.

Additionally, because Kandi New Energy is under common control with other entities, the consolidated financial statements have been prepared as if the transactions had occurred retroactively as to the beginning of the reporting period of these consolidated financial statements.

Control and common control are defined under the accounting standards as “an individual, enterprise, or immediate family members who hold more than 50 percent of the voting ownership interest of each entity.” Because the owners collectively owned 100% of Kandi New Energy, and had agreed to vote their interests in concert since the establishment of each of these three companies as memorialized in the Voting Rights Proxy Agreement, the Company believes that the owners collectively have control and common control of Kandi New Energy. Accordingly, the Company believes that Kandi New Energy was constructively held under common control by Zhejiang Kandi Technologies as of the time the contractual agreements were entered into, establishing Zhejiang Kandi Technologies as their primary beneficiary. Zhejiang Kandi Technologies, in turn, is owned by Continental, which is owned by the Company.

The Company has completed the conversion of Kandi New Energy to a wholly-owned subsidiary of Zhejiang Kandi Technologies, effective March 14, 2022. The Company no longer has any VIE subsequent to March 14, 2022. There was no other VIE contractual arrangements during the year ended December 31, 2023.

For accounting purpose, the tables below are condensed consolidating schedules summarizing separately the results of operations, financial position and cash flows of the parent company including non-VIE subsidiaries and Kandi New Energy, which was deemed as an VIE since the Company only owned 50% of the equity, and control Kandi New Energy through several contractual agreements prior to its conversion to a wholly-owned subsidiary of Zhejiang Kandi Technologies effective March 14, 2022, together with eliminating adjustments:

Consolidated Statements of Operations Information

	For the year ended December 31, 2022
	Parent including non-VIE subsidiaries			VIE*		Elimination		Consolidated
Revenues	$	117,813,049		$	-	$	-	$	117,813,049
Gross profit	$	19,517,726		$	-	$	-	$	19,517,726
Loss from operations	$	(27,679,432	)	$	-	$	-	$	(27,679,432	)
Loss before income taxes	$	(13,338,534	)	$	-	$	-	$	(13,338,534	)
Net loss	$	(12,851,024	)	$	-	$	-	$	(12,851,024	)

* Effective March 14, 2022, the Company has completed the conversion of Kandi New Energy to a wholly-owned subsidiary of Zhejiang Kandi Technologies and the VIE agreements were terminated. The Company no longer has any VIE as of the date of this report.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2023

Summary of Significant Accounting Policies [Abstract]

Schedule of Summarized the Aging of the Accounts Receivable

The table below summarized the aging of the accounts receivable as of December 31, 2023 and 2022.

Aging of accounts receivable as of December 31, 2022	Outstanding balance		Subsequent collection(1)
1 to 90 days	$	17,696,095	$	17,269,833
91 to 180 days		1,863,518		1,775,104
Over 180 days		634,596		634,596
Over one year		1,104,456		258,981
Over two years		19,137,597		16,312,594
Total	$	40,436,262	$	36,251,108

Aging of accounts receivable as of December 31, 2023	Outstanding balance		Subsequent collection(1)
1 to 90 days	$	13,532,753	$	8,614,006
91 to 180 days		4,810,095		1,025,240
Over 180 days		142,122		111,448
Over one year		287,967		197,550
Over two years		3,065,031		49,506
Total	$	21,837,968	$	9,997,750

(1) the Company reviewed the subsequent collection until March 10, 2024.

Schedule of Estimated Useful Lives

Estimated useful lives are as follows:

Buildings	20-40 years
Machinery and equipment	10 years
Office equipment	5 years
Motor vehicles	5 years
Molds	5 years

Schedule of Assets and liabilities are Translated at the Exchange Rates as of Balance Sheet Date

Assets and liabilities are translated at the exchange rates as of balance sheet date. Income and expenditures are translated at the average exchange rate of the reporting period, which rates are obtained from the website: http://www.oanda.com

	December 31,		December 31,
	2023		2022
Period end RMB : USD exchange rate		7.0698		6.8973
Average RMB : USD exchange rate		7.0727		6.7284

Schedule of Consolidated Statements of Operations Information

Consolidated Statements of Operations Information

	For the year ended December 31, 2022
	Parent including non-VIE subsidiaries			VIE*		Elimination		Consolidated
Revenues	$	117,813,049		$	-	$	-	$	117,813,049
Gross profit	$	19,517,726		$	-	$	-	$	19,517,726
Loss from operations	$	(27,679,432	)	$	-	$	-	$	(27,679,432	)
Loss before income taxes	$	(13,338,534	)	$	-	$	-	$	(13,338,534	)
Net loss	$	(12,851,024	)	$	-	$	-	$	(12,851,024	)

* Effective March 14, 2022, the Company has completed the conversion of Kandi New Energy to a wholly-owned subsidiary of Zhejiang Kandi Technologies and the VIE agreements were terminated. The Company no longer has any VIE as of the date of this report.

Schedule of Consolidated Balance Sheets Information

Consolidated Balance Sheets Information

	As of December 31, 2022
	Parent including non-VIE subsidiaries		VIE*		Elimination		Consolidated
Cash and cash equivalents	$	84,063,717	$	-	$	-	$	84,063,717
Total current assets	$	329,322,973	$	-	$	-	$	329,322,973
Total non-current assets	$	153,659,303	$	-	$	-	$	153,659,303
Total current liabilities	$	81,505,848	$	-	$	-	$	81,505,848
Total non-current liabilities	$	3,783,457	$	-	$	-	$	3,783,457
Total stockholders’ equity	$	397,692,971	$	-	$	-	$	397,692,971

* Effective March 14, 2022, the Company has completed the conversion of Kandi New Energy to a wholly-owned subsidiary of Zhejiang Kandi Technologies and the VIE agreements were terminated. The Company no longer has any VIE as of the date of this report.

	As of December 31, 2022
	Parent including non-VIE subsidiaries		Consolidated		% of VIE’s assets and liabilities in consolidated assets and liabilities
Cash and cash equivalents	$	84,063,717	$	84,063,717		-
Total current assets	$	329,322,973	$	329,322,973		-
Total non-current assets	$	153,659,303	$	153,659,303		-
Total current liabilities	$	81,505,848	$	81,505,848		-
Total non-current liabilities	$	3,783,457	$	3,783,457		-
Total stockholders’ equity	$	397,692,971	$	397,692,971		-

Schedule of Consolidated Cash Flows Information

Consolidated Cash Flows Information

	For the year ended December 31, 2022
	Parent including non-VIE subsidiaries			VIE*		Elimination		Consolidated
Net cash provided by operating activities	$	31,478,911		$	-	$	-	$	31,478,911
Net cash used in investing activities	$	(35,031,115	)	$	-	$	-	$	(35,031,115	)
Net cash used in financing activities	$	(4,333,088	)	$	-	$	-	$	(4,333,088	)

* Effective March 14, 2022, the Company has completed the conversion of Kandi New Energy to a wholly-owned subsidiary of Zhejiang Kandi Technologies and the VIE agreements were terminated. The Company no longer has any VIE as of the date of this report.

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Concentrations (Tables)

12 Months Ended

Dec. 31, 2023

Customers [Member]

Concentrations (Tables) [Line Items]

Schedule of Major Customers

For the years ended December 31, 2023 and 2022, the Company’s major customers, who accounted for more than 10% of the Company’s consolidated revenue, were as follows:

	Sales			Trade Receivable
	Year Ended
	December 31，			December 31，			December 31，
Major Customers	2023			2023			2022
Customer A		26	%		1	%		1	%
Customer B		19	%		4	%		-
Customer C		11	%		4	%		-

	Sales			Trade Receivable
	Year Ended
	December 31,			December 31,			December 31,
Major Customers	2022			2022			2021
Customer A		26	%		1	%		-

Suppliers [Member]

Concentrations (Tables) [Line Items]

Schedule of Material Supplier

For the years ended December 31, 2023 and 2022, the Company’s material suppliers, each of whom accounted for more than 10% of the Company’s total purchases, were as follows:

	Purchases			Accounts Payable
	Year Ended
	December 31，			December 31，			December 31，
Major Suppliers	2023			2023			2022
Zhejiang Kandi Supply Chain Management Co., Ltd.(1)		20	%		26	%		32	%

	Purchases			Accounts Payable
	Year Ended
	December 31,			December 31,			December 31,
Major Suppliers	2022			2022			2021
Zhejiang Kandi Supply Chain Management Co., Ltd.(1)		22	%		32	%		11	%

(1) Zhejiang Kandi Technologies owns 10% equity interest of the supplier.

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Accounts Receivable, Net (Tables)

12 Months Ended

Dec. 31, 2023

Accounts Receivable, Net [Abstract]

Schedule of Accounts Receivable

Accounts receivable are summarized as follows:

	December 31,			December 31,
	2023			2022
Accounts receivable	$	21,837,968		$	40,436,262
Less: allowance for doubtful accounts		(2,886,223	)		(2,285,386	)
Accounts receivable, net	$	18,951,745		$	38,150,876

Schedule of Provision for Doubtful Accounts

The following table sets forth the movement of provision for doubtful accounts:

	Allowance for Doubtful Accounts
BALANCE AT DECEMBER 31, 2021	$	3,053,277
Provision		456,974
Recovery		(999,775	)
Exchange rate difference		(225,090	)
BALANCE AT DECEMBER 31, 2022	$	2,285,386
Provision		690,236
Recovery		(33,906	)
Exchange rate difference		(55,493	)
BALANCE AT DECEMBER 31, 2023	$	2,886,223

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Inventories (Tables)

12 Months Ended

Dec. 31, 2023

Inventories [Abstract]

Schedule of Inventories

Inventories are summarized as follows:

	December 31,		December 31,
	2023		2022
Raw material	$	6,248,888	$	6,551,450
Work-in-progress		4,061,146		4,114,550
Finished goods and finished goods on consignment*		51,241,234		29,809,366
Inventories	$	61,551,268	$	40,475,366

* As of December 31, 2023, approximately $50.5 million of finished goods and finished goods on consignment of off-roads and EVs held by SC Autosports were pledged as collateral for the $2,000,000 short-term loan.

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Notes Receivable (Tables)

12 Months Ended

Dec. 31, 2023

Notes Receivable [Member]

Notes Receivable (Tables) [Line Items]

Schedule of Notes Receivable

Notes receivable are summarized as follows:

	December 31,			December 31,
	2023			2022
Notes receivable as below:
Bank acceptance notes	$	-		$	434,461
Commercial acceptance notes		124,473,111	*		-
Notes receivable	$	124,473,111		$	434,461

* As of December 31, 2023, there was $124,473,111 notes receivable from unrelated parties, among which $60.8 million was due on January 3, 2024 and $63.7 million was due on January 5, 2024. By end of January 2024, $124,473,111 notes receivable was wholly settled with cash collection subsequently.

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Property, Plant and Equipment (Tables)

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment, Net [Abstract]

Schedule of Property, Plants and Equipment

Property, plant and equipment as of December 31, 2023 and 2022 consisted of the following:

	December 31,			December 31,
	2023			2022
At cost:
Buildings(1)	$	61,964,058		$	49,239,626
Machinery and equipment(2)		74,520,599			77,845,979
Office equipment		1,474,944			1,528,135
Motor vehicles and other transport equipment		695,383			1,810,825
Molds and others		13,011,196			10,983,573
		151,666,180			141,408,138
Less : Accumulated depreciation		(52,862,408	)		(44,239,385	)
Property, plant and equipment, net	$	98,803,772		$	97,168,753

(1)	As of December 31, 2023, approximately $12.4 million of buildings held by Kandi Investment were pledged as collateral for the $8,178,574 long-term loan.
(2)	As of December 31, 2023, machinery and equipment with carrying value totaling approximately $24.2 million were pledged to banks as collateral for credit limits and loans.

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Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2023

Intangible Assets [Abstract]

Schedule of Major Class of Our Intangible Assets, Other than Goodwill

The following table provides the gross carrying value and accumulated amortization for each major class of our intangible assets, other than goodwill:

	Remaining	December 31,			December 31,
	useful life	2023			2022
Cost:
Patent	1.5-3.17 years	$	4,818,262			4,938,765
Technology	3-5 years		9,759,823			10,003,915
Customer relation	2.92 years		1,030,000			-
			15,608,085			14,942,680
Less : Accumulated amortization
Patent		$	(3,281,463	)		(2,744,024	)
Technology			(2,391,950	)		(1,573,079	)
Customer relation			(28,611	)		-
			(5,702,024	)		(4,317,103	)
Less : Accumulated impairment for intangible assets			(3,510,236	)		(2,631,465	)
Intangible assets, net		$	6,395,825		$	7,994,112

Schedule of Amortization Expenses

Amortization expenses for the next five years and thereafter are as follows:

Years ended December 31,
2024	$	1,718,689
2025		1,657,930
2026		1,426,023
2027		820,390
2028		772,793
Thereafter		-
Total	$	6,395,825

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Land Use Rights (Tables)

12 Months Ended

Dec. 31, 2023

Land Use Rights, Net [Abstract]

Schedule of Land Use Rights

The Company’s land use rights consist of the following:

	December 31,			December 31,
	2023			2022
Cost of land use rights	$	3,716,267		$	3,809,211
Less: Accumulated amortization		(961,825	)		(899,261	)
Land use rights, net	$	2,754,442		$	2,909,950

Schedule of Amortization Expense

Amortization expense for the next five years and thereafter is as follows:

Years ended December 31,
2024	$	84,471
2025		84,471
2026		84,471
2027		84,471
2028		84,471
Thereafter		2,332,087
Total	$	2,754,442

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Other Long-Term Assets (Tables)

12 Months Ended

Dec. 31, 2023

Other Long Term Assets [Abstract]

Schedule of Other Long-Term Assets

	December 31,		December 31,
	2023		2022
Prepayments for land use right (i)	$	3,738,418		3,917,226
Right - of - use asset (ii)		5,889,690		6,383,824
Others		365,022		329,861
Total other long-term asset	$	9,993,130	$	10,630,911

(i) As of December 31, 2023 and December 31, 2022, the Company’s other long term assets included net value of prepayments for land use right of Hainan facility of $3,738,418 and $3,917,226, respectively. As of December 31, 2023, the land use right of Hainan was not recognized since the land certificate is still in process. The amortization expense for the year ended December 31, 2023 and 2022 were $83,196 and $87,453, respectively.

(ii) As of December 31, 2023 and December 31, 2022, the Company’s operating lease right-of-use assets in other long term assets included net value of land use right of Jinhua facility acquired in October 2020 and Jiangxi facility acquired in October 2021 of $5,443,448 and $5,697,720, respectively, as well as the amount of $446,242 and $686,104 related to the lease of Hangzhou office starting January 1, 2022. The amortization expense of land use right of Jinhua facility and Jiangxi facility for the year ended December 31, 2023 and 2022 were $115,204 and $121,099, respectively.

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Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Taxes [Abstract]

Schedule of Income Tax Expenses

Income tax expenses (benefit) for the year ended December 31, 2023 and 2022 are summarized as follows:

	For Year Ended
	December 31,
	2023		2022
Current:
Provision for CIT	$	1,599,668	$	(26,465	)
Deferred:
Provision for CIT		203,236		(461,045	)
Income tax expense (benefit)	$	1,802,904	$	(487,510	)

Schedule of Net Change Valuation Allowance of Deferred Tax Assets

The reconciliation of taxes at the PRC statutory rate (25% in 2023 and 2022) to our provision for income taxes for the years ended December 31, 2023 and 2022 was as follows:

	For Year Ended
	December 31,
	2023			2022
Expected taxation at PRC statutory tax rate	$	1,885,374		$	(3,334,633)
Effect of differing tax rates in different jurisdictions		650,434			(81,257	)
Effect of PRC preferential tax rates		(2,471,114	)		790,053
Non-taxable income		(898,290	)		(1,984,855	)
Non-deductible expenses		3,830,387			2,315,146
Research and development super-deduction		(1,516,020	)		(1,672,428	)
Over-accrued EIT for previous years		(431	)		(538,545	)
Addition to valuation allowance		467,366			2,800,862
Foreign tax credit		(70,708	)		(84,045	)
Other (including intercompany transaction )		(74,094	)		1,302,192
Income tax expense (benefit)	$	1,802,904		$	(487,510	)

Schedule of Net Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to the Company’s net deferred tax assets and liabilities as of December 31, 2023 and December 31, 2022 are summarized as follows:

	December 31,			December 31,
	2023			2022
Deferred tax assets:
Accruals and reserves	$	6,388,121		$	6,759,952
Loss carried forward		9,412,846			8,547,725
Total deferred tax assets		15,800,967			15,307,677
Deferred tax liabilities:
Expense		(345,033	)		(212,143	)
Tangible		(218,406	)		(207,905	)
Intangible		(763,627	)		(1,146,339	)
Revenue		(1,222,344	)		(426,504	)
Total deferred tax liability		(2,549,410	)		(1,992,891	)
Net deferred tax assets	$	13,251,557		$	13,314,786
less: valuation allowance		(13,400,638	)		(13,260,631	)
Net deferred tax (liabilities) assets, net of valuation allowance	$	(149,081	)	$	54,155

Schedule of Income (Loss) Before Income Taxes Prc and Non-Prc Sources

Income (loss) before income taxes from PRC and non-PRC sources for the year ended December 31, 2023 and 2022 are summarized as follows:

	For Year Ended
	December 31,
	2023			2022
Income (loss) before income taxes consists of:
PRC	$	23,550,796		$	(10,448,802	)
Non-PRC		(20,078,125	)		(2,889,732	)
Total	$	3,472,671		$	(13,338,534	)

Schedule of Net Change Valuation Allowance of Deferred Tax Assets

Net change in the valuation allowance of deferred tax assets are summarized as follows:

Net change of valuation allowance of Deferred tax assets
Balance at December 31,2022	$	13,260,631
Additions-change to tax expense		467,366
Prior year true up		(5,478	)
Exchange rate difference		(321,881	)
Balance at December 31,2023	$	13,400,638

Schedule of Income Tax Expense

The combined effects of income tax expense exemptions and reductions available to the Company for the years ended December 31, 2023 and 2022 are as follows:

	Year Ended
	December 31,
	2023		2022
Tax benefit (holiday) credit	$	2,421,539	$	1,202,615
Basic net income per share effect	$	0.03	$	0.02

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Leases and Right-of-Use-Assets (Tables)

12 Months Ended

Dec. 31, 2023

Leases and Right-of-Use-Assets [Abstract]

Schedule of Information Related to Operating Leases

Supplemental information related to operating leases was as follows:

	Year Ended
	December 31,
	2023		2022
Cash payments for operating leases	$	338,233	$	355,541

Schedule of Maturities of Lease Liabilities

Maturities of lease liabilities as of December 31, 2023 were as follow:

Maturity of Lease Liabilities:	Lease payable
Years ended December 31,
2024	$	218,924
2025		227,024

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Contingent Consideration Liability (Tables)

12 Months Ended

Dec. 31, 2023

Contingent Consideration Liability [Abstract]

Schedule of Contingent Consideration Liability

Details of the contingent consideration liability as of December 31, 2023 and December 31, 2022 were as follow:

	December 31,		December 31,
	2023		2022
Contingent consideration liability to former members of Jiangxi Huiyi	$	-		1,803,000
Contingent consideration liability to former members of NGI		2,693,000		-
Total contingent consideration liability	$	2,693,000	$	1,803,000

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Stock Options (Tables)

12 Months Ended

Dec. 31, 2023

Stock Options [Abstract]

Schedule of Stock Option Activities

The following is a summary of the stock option activities of the Company:

	Number of Shares			Weighted Average Exercise Price
Outstanding as of December 31, 2021		900,000		$	9.72
Granted		5,000,000			2.07
Exercised		-			-
Cancelled		-			-
Forfeited		-			-
Outstanding as of December 31, 2022		5,900,000		$	3.24
Granted		68,019			3.96
Exercised		(1,666,661	)		2.07
Cancelled		-			-
Forfeited		-			-
Outstanding as of December 31, 2023		4,301,358		$	3.70

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Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Schedule of Forth Disaggregation of Revenue

The following table sets forth disaggregation of revenue:

	Year Ended December 31
	2023		2022
	Sales Revenue		Sales Revenue
Primary geographical markets
U.S. and other countries/areas	$	93,979,363	$	65,871,112
China		29,619,869		51,941,937
Total	$	123,599,232	$	117,813,049
Major products and Services
EV parts	$	5,807,973	$	8,964,094
EV products		1,214,786		7,926,233
Off-road vehicles and associated parts		106,983,891		70,622,278
Electric Scooters, Electric Self-Balancing Scooters and associated parts		683,952		4,616,683
Battery exchange equipment and Battery exchange service		674,927		1,691,486
Lithium-ion cells		7,994,227		23,992,275
Commission income		239,476		-
Total	$	123,599,232	$	117,813,049
Timing of revenue recognition
Products transferred at a point in time	$	123,359,756	$	117,813,049
Sales transactions completed at a point in time		239,476		-
Total	$	123,599,232	$	117,813,049

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Acquisitions (Tables)

12 Months Ended

Dec. 31, 2023

Acquisitions [Abstract]

Schedule of Preliminary Purchase Price as of the Acquisition Date

The components of the preliminary purchase price as of the acquisition date for NGI are as follows:

	NGI
Fair value of contingent consideration	$	2,693,000
Total	$	2,693,000

Schedule of Preliminary Purchase Price Allocations

The following summarizes the preliminary purchase price allocations:

	NGI
Goodwill	$	1,139,438
Amortizable intangible assets		1,030,000
Other net assets		523,562
Total	$	2,693,000

Schedule of Preliminary Purchase Price to Specific Intangible Asset

The Company allocated the preliminary purchase price to specific intangible asset categories as of the acquisition date for NGI as follows:

	Amount Assigned		Estimated useful life (in years)
Amortizable intangible assets:
Customer relation	$	1,030,000		3

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Organization and Principal Activities (Details) $ in Millions					1 Months Ended
	Feb. 15, 2022 USD ($)	Sep. 30, 2020	Mar. 04, 2019	May 18, 2010 CNY (¥)	Apr. 30, 2013	Dec. 31, 2023	Jun. 17, 2023	Mar. 14, 2022	Feb. 15, 2022 CNY (¥)	Jul. 13, 2021	Feb. 18, 2021	May 31, 2018	Dec. 31, 2017	Apr. 30, 2012
Organization and Principal Activities [Line Items]
Percentage of ownership interest				50.00%
Percentage of ownership acquisition		90.00%
Zhejiang Kandi Technologies [Member]
Organization and Principal Activities [Line Items]
Percentage of ownership interest		100.00%
Percentage of ownership acquisition			90.00%										100.00%
Zhejiang Kandi Technologies [Member] | Ruiheng [Member]
Organization and Principal Activities [Line Items]
Percentage of ownership interest		10.00%
SC Autosports [Member]
Organization and Principal Activities [Line Items]
Percentage of ownership acquisition												100.00%
Supply Chain [Member]
Organization and Principal Activities [Line Items]
Percentage of ownership interest			10.00%
Kandi Hainan and Jiangsu Xingchi [Member]
Organization and Principal Activities [Line Items]
Invested amount	$ 4.6								¥ 30,000,000
NGI [Member]
Organization and Principal Activities [Line Items]
Percentage of ownership acquisition							100.00%
Kandi New Energy to Zhejiang Kandi Technologies [Member]
Organization and Principal Activities [Line Items]
Percentage of equity interests								50.00%
Mr. Hu Xiaoming [Member]
Organization and Principal Activities [Line Items]
Contribute amount (in Yuan Renminbi)				¥ 36,000,000
Percentage of ownership interest				50.00%
Fengsheng Automotive Technology Group Co., Ltd. [Member]
Organization and Principal Activities [Line Items]
Percentage of ownership acquisition											22.00%
Kandi Hainan [Member]
Organization and Principal Activities [Line Items]
Percentage of ownership interest	66.70%				45.00%
Kandi New Energy [Member]
Organization and Principal Activities [Line Items]
Percentage of ownership interest					55.00%
Jiangxi Huiyi [Member]
Organization and Principal Activities [Line Items]
Percentage of ownership acquisition										100.00%
Jiangsu Xingchi [Member]
Organization and Principal Activities [Line Items]
Percentage of ownership interest	33.30%
Yongkang Scrou [Member]
Organization and Principal Activities [Line Items]
Percentage of ownership acquisition														100.00%
Zhejiang Kandi Technologies [Member]
Organization and Principal Activities [Line Items]
Voting rights and residual interests						100.00%
Jinhua Kandi New Energy Vehicles Co., Ltd. [Member]
Organization and Principal Activities [Line Items]
Voting rights and residual interests						100.00%

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Liquidity (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Liquidity [Line Items]
Working capital	$ 266,874,509
Cash and cash equivalents	33,756,941	$ 84,063,717
Restricted cash	59,873,127	66,976,554
Deposit amount	33,947,212	81,191,191
Short-term bank loans	9,072,336	5,569,154
Long-term bank loans	8,389,163
Minimum [Member]
Liquidity [Line Items]
Working capital	$ 19,057,384
Annual interest rate	3.25%
Maximum [Member]
Liquidity [Line Items]
Working capital		$ 247,817,125
Annual interest rate	3.99%
PRC Subsidiaries [Member]
Liquidity [Line Items]
Short-term bank loans	$ 7,100,000
US Subsidiaries [Member]
Liquidity [Line Items]
Short-term bank loans	$ 2,000,000

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Principles of Consolidation (Details)			12 Months Ended
	Mar. 14, 2022	Feb. 15, 2022	Dec. 31, 2023
Zhejiang Kandi Technologies [Member]
Principles of Consolidation [Line Items]
Percentage owned in subsidiary			50.00%
Percentage of economic benefits, voting rights and residual interests			100.00%
Equity method investment ownership percentage	50.00%
Mr. Hu Xiaoming [Member]
Principles of Consolidation [Line Items]
Percentage owned in subsidiary			50.00%
Hainan Kandi Holding [Member]
Principles of Consolidation [Line Items]
Equity method investment ownership percentage		33.30%
Kandi Hainan [Member] | Zhejiang Kandi Technologies [Member]
Principles of Consolidation [Line Items]
Percentage owned in subsidiary			45.00%
Kandi Hainan [Member] | Kandi New Energy [Member]
Principles of Consolidation [Line Items]
Percentage owned in subsidiary			55.00%
Hainan Kandi Holding [Member] | Kandi Hainan [Member]
Principles of Consolidation [Line Items]
Percentage owned in subsidiary			66.70%
Hainan Kandi Holding [Member] | Jiangsu Xingchi [Member]
Principles of Consolidation [Line Items]
Percentage owned in subsidiary			33.30%

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Summary of Significant Accounting Policies (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Mar. 14, 2022
Summary of Significant Accounting Policies [Line Items]
Fair value	$ 24,071,461	$ 19,123,476
Fair value of contingent consideration	2,693,000	1,803,000
Restricted cash	59,873,127	66,976,554
Allowance for Doubtful Accounts, Premiums and Other Receivables	2,886,223	2,285,386
Notes receivable	124,473,111	434,461
Recognized impairment loss for finite-lived intangible assets	942,591	2,697,521
Research and development expense	4,265,176	6,029,608
Government grants	2,017,551	1,639,328
Stock-based option expense	1,083,000
Recognized impairment loss for goodwill	496,981	642,665
Amortization expenses for intangible assets	1,489,657	1,965,490
Impairment loss	$ 942,591	2,697,521
Owned percentage of equity	100.00%		50.00%
Minimum [Member]
Summary of Significant Accounting Policies [Line Items]
Current discount rate	1.50%
Stock-based option expense		$ 1,231,566
Maximum [Member]
Summary of Significant Accounting Policies [Line Items]
Current discount rate	2.20%
Stock-based option expense	$ 3,476,058
Zhejiang Kandi Technologies [Member]
Summary of Significant Accounting Policies [Line Items]
Owned percentage of equity	50.00%

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Summary of Significant Accounting Policies (Details) - Schedule of Summarized the Aging of the Accounts Receivable - USD ($)		12 Months Ended
		Dec. 31, 2023	Dec. 31, 2022
Accounts Receivable, Noncurrent, Past Due [Line Items]
Outstanding balance		$ 21,837,968	$ 40,436,262
Subsequent collection	[1]	9,997,750	36,251,108
1 to 90 days [Member]
Accounts Receivable, Noncurrent, Past Due [Line Items]
Outstanding balance		13,532,753	17,696,095
Subsequent collection	[1]	8,614,006	17,269,833
91 to 180 days [Member]
Accounts Receivable, Noncurrent, Past Due [Line Items]
Outstanding balance		4,810,095	1,863,518
Subsequent collection	[1]	1,025,240	1,775,104
Over 180 days [Member]
Accounts Receivable, Noncurrent, Past Due [Line Items]
Outstanding balance		142,122	634,596
Subsequent collection	[1]	111,448	634,596
Over one year [Member]
Accounts Receivable, Noncurrent, Past Due [Line Items]
Outstanding balance		287,967	1,104,456
Subsequent collection	[1]	197,550	258,981
Over two years [Member]
Accounts Receivable, Noncurrent, Past Due [Line Items]
Outstanding balance		3,065,031	19,137,597
Subsequent collection	[1]	$ 49,506	$ 16,312,594

[1] the Company reviewed the subsequent collection until March 10, 2024.

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Summary of Significant Accounting Policies (Details) - Schedule of Estimated Useful Lives	Dec. 31, 2023
Building [Member] | Minimum [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Property, plants and equipment, Estimated useful lives	20 years
Building [Member] | Maximum [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Property, plants and equipment, Estimated useful lives	40 years
Machinery and Equipment [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Property, plants and equipment, Estimated useful lives	10 years
Office Equipment [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Property, plants and equipment, Estimated useful lives	5 years
Vehicles [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Property, plants and equipment, Estimated useful lives	5 years
Tools, Dies and Molds [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Property, plants and equipment, Estimated useful lives	5 years

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Summary of Significant Accounting Policies (Details) - Schedule of Assets and liabilities are Translated at the Exchange Rates as of Balance Sheet Date	Dec. 31, 2023	Dec. 31, 2022
Schedule Of Assets And Liabilities Are Translated At The Exchange Rates As Of Balance Sheet Date Abstract
Period end RMB : USD exchange rate	7.0698	6.8973
Average RMB : USD exchange rate	7.0727	6.7284

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Summary of Significant Accounting Policies (Details) - Schedule of Consolidated Statements of Operations Information	12 Months Ended
	Dec. 31, 2022 USD ($)
Parent including non-VIE subsidiaries [Member]
Condensed Statement of Income Captions [Line Items]
Revenues	$ 117,813,049
Gross profit	19,517,726
Loss from operations	(27,679,432)
Loss before income taxes	(13,338,534)
Net loss	(12,851,024)
VIE [Member]
Condensed Statement of Income Captions [Line Items]
Revenues		[1]
Gross profit		[1]
Loss from operations		[1]
Loss before income taxes		[1]
Net loss		[1]
Elimination [Member]
Condensed Statement of Income Captions [Line Items]
Revenues
Gross profit
Loss from operations
Loss before income taxes
Net loss
Consolidated [Member]
Condensed Statement of Income Captions [Line Items]
Revenues	117,813,049
Gross profit	19,517,726
Loss from operations	(27,679,432)
Loss before income taxes	(13,338,534)
Net loss	$ (12,851,024)

[1] Effective March 14, 2022, the Company has completed the conversion of Kandi New Energy to a wholly-owned subsidiary of Zhejiang Kandi Technologies and the VIE agreements were terminated. The Company no longer has any VIE as of the date of this report.

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Summary of Significant Accounting Policies (Details) - Schedule of Consolidated Balance Sheets Information	Dec. 31, 2022 USD ($)
Parent including non-VIE subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Cash and cash equivalents	$ 84,063,717
Total current assets	329,322,973
Total non-current assets	153,659,303
Total current liabilities	81,505,848
Total non-current liabilities	3,783,457
Total stockholders’ equity	397,692,971
VIE [Member]
Condensed Financial Statements, Captions [Line Items]
Cash and cash equivalents		[1]
Total current assets		[1]
Total non-current assets		[1]
Total current liabilities		[1]
Total non-current liabilities		[1]
Total stockholders’ equity		[1]
Elimination [Member]
Condensed Financial Statements, Captions [Line Items]
Cash and cash equivalents
Total current assets
Total non-current assets
Total current liabilities
Total non-current liabilities
Total stockholders’ equity
Consolidated [Member]
Condensed Financial Statements, Captions [Line Items]
Cash and cash equivalents	84,063,717
Total current assets	329,322,973
Total non-current assets	153,659,303
Total current liabilities	81,505,848
Total non-current liabilities	3,783,457
Total stockholders’ equity	397,692,971
VIE’s assets and liabilities in consolidated assets and liabilities [Member]
Condensed Financial Statements, Captions [Line Items]
Cash and cash equivalents
Total current assets
Total non-current assets
Total current liabilities
Total non-current liabilities
Total stockholders’ equity

[1] Effective March 14, 2022, the Company has completed the conversion of Kandi New Energy to a wholly-owned subsidiary of Zhejiang Kandi Technologies and the VIE agreements were terminated. The Company no longer has any VIE as of the date of this report.

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Summary of Significant Accounting Policies (Details) - Schedule of Consolidated Cash Flows Information	12 Months Ended
	Dec. 31, 2022 USD ($)
Parent including non-VIE subsidiaries [Member]
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by operating activities	$ 31,478,911
Net cash used in investing activities	(35,031,115)
Net cash used in financing activities	(4,333,088)
VIE [Member]
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by operating activities		[1]
Net cash used in investing activities		[1]
Net cash used in financing activities		[1]
Elimination [Member]
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities
Consolidated [Member]
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by operating activities	31,478,911
Net cash used in investing activities	(35,031,115)
Net cash used in financing activities	$ (4,333,088)

[1] Effective March 14, 2022, the Company has completed the conversion of Kandi New Energy to a wholly-owned subsidiary of Zhejiang Kandi Technologies and the VIE agreements were terminated. The Company no longer has any VIE as of the date of this report.

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Concentrations (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Zhejiang Kandi [Member]
Concentrations [Line Items]
Equity interest of supplier	10.00%
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Major Customer [Member]
Concentrations [Line Items]
Concentration risk, percentage	10.00%	10.00%
Major Suppliers [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Concentrations [Line Items]
Concentration risk, percentage	10.00%	10.00%

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Concentrations (Details) - Schedule of Major Customers - Customer [Member]	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Sales [Member] | Customer A [Member]
Schedule of Major Customers [Line Items]
Concentration risk, percentage	26.00%	26.00%
Sales [Member] | Customer B [Member]
Schedule of Major Customers [Line Items]
Concentration risk, percentage	19.00%
Sales [Member] | Customer C [Member]
Schedule of Major Customers [Line Items]
Concentration risk, percentage	11.00%
Trade Receivable [Member] | Customer A [Member]
Schedule of Major Customers [Line Items]
Concentration risk, percentage	1.00%	1.00%
Trade Receivable [Member] | Customer B [Member]
Schedule of Major Customers [Line Items]
Concentration risk, percentage	4.00%
Trade Receivable [Member] | Customer C [Member]
Schedule of Major Customers [Line Items]
Concentration risk, percentage	4.00%

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Concentrations (Details) - Schedule of Material Supplier - Zhejiang Kandi Supply Chain Management Co., Ltd. [Member] - Supplier Concentration Risk [Member]		12 Months Ended
		Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Purchases [Member]
Schedule of Material Supplier [Line Items]
Concentration risk percentage	[1]	20.00%	22.00%
Accounts Payable [Member]
Schedule of Material Supplier [Line Items]
Concentration risk percentage	[1]	26.00%	32.00%	11.00%

[1] Zhejiang Kandi Technologies owns 10% equity interest of the supplier.

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Earnings (Loss) Per Share (Details) - $ / shares		12 Months Ended
	Sep. 07, 2022	Dec. 31, 2023	Dec. 31, 2022
Earnings (Loss) Per Share [Line Items]
Expiration period		May 2023
Shares granted	1,121,797
Stock options granted		68,019	5,000,000
Exercise price per share (in Dollars per share)	$ 2.07
Options Held [Member]
Earnings (Loss) Per Share [Line Items]
Share issued		968,019
Stock options granted	3,333,339
Options [Member]
Earnings (Loss) Per Share [Line Items]
Stock options			5,900,000
Warrant [Member]
Earnings (Loss) Per Share [Line Items]
Share issued		8,131,332
Stock options			8,131,332

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Accounts Receivable, Net (Details) - Schedule of Accounts Receivable - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Schedule of Accounts Receivable [Abstract]
Accounts receivable	$ 21,837,968	$ 40,436,262
Less: allowance for doubtful accounts	(2,886,223)	(2,285,386)
Accounts receivable, net	$ 18,951,745	$ 38,150,876

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Accounts Receivable, Net (Details) - Schedule of Provision for Doubtful Accounts - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Schedule of Provision for Doubtful Accounts [Abstract]
Balance, beginning	$ 2,285,386	$ 3,053,277
Provision	690,236	456,974
Recovery	(33,906)	(999,775)
Exchange rate difference	(55,493)	(225,090)
Balance, ending	$ 2,886,223	$ 2,285,386

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Inventories (Details)	Dec. 31, 2023 USD ($)
Off-Road [Member]
Inventories [Line Items]
Inventory	$ 50,500,000
SC Autosports [Member]
Inventories [Line Items]
Short-term loan	$ 2,000,000

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Inventories (Details) - Schedule of Inventories - USD ($)		Dec. 31, 2023	Dec. 31, 2022
Schedule of Inventories [Abstract]
Raw material		$ 6,248,888	$ 6,551,450
Work-in-progress		4,061,146	4,114,550
Finished goods and finished goods on consignment	[1]	51,241,234	29,809,366
Inventories		$ 61,551,268	$ 40,475,366

[1] As of December 31, 2023, approximately $50.5 million of finished goods and finished goods on consignment of off-roads and EVs held by SC Autosports were pledged as collateral for the $2,000,000 short-term loan.

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Notes Receivable (Details) - USD ($)	Jan. 30, 2024	Jan. 05, 2024	Jan. 03, 2024	Dec. 31, 2023	Dec. 31, 2022
Notes Receivable [Line Items]
Notes receivable				$ 124,473,111	$ 434,461
Subsequent Event [Member]
Notes Receivable [Line Items]
Notes receivable	$ 124,473,111	$ 63,700,000	$ 60,800,000

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Notes Receivable (Details) - Schedule of Notes Receivable - USD ($)	12 Months Ended
	Dec. 31, 2023		Dec. 31, 2022
Schedule Of Notes Receivable Abstract
Bank acceptance notes			$ 434,461
Commercial acceptance notes	124,473,111	[1]
Notes receivable	$ 124,473,111		$ 434,461

[1] As of December 31, 2023, there was $124,473,111 notes receivable from unrelated parties, among which $60.8 million was due on January 3, 2024 and $63.7 million was due on January 5, 2024. By end of January 2024, $124,473,111 notes receivable was wholly settled with cash collection subsequently.

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Property, Plant and Equipment (Details)	12 Months Ended
	Dec. 31, 2023 USD ($) m² shares	Dec. 31, 2022 USD ($)
Property, Plant and Equipment [Line Items]
Production capacity with an annual output (in Shares) | shares	100,000
Depreciation expenses	$ 10,141,120	$ 10,165,138
Long-term loan	8,178,574
Machinery and equipment carrying value	$ 24,200,000
Minimum [Member]
Property, Plant and Equipment [Line Items]
Area square meters (in Square Meters) | m²	58,000
Maximum [Member]
Property, Plant and Equipment [Line Items]
Area square meters (in Square Meters) | m²	96,000
Buildings [Member]
Property, Plant and Equipment [Line Items]
Buildings, gross	$ 12,400,000

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Property, Plant and Equipment (Details) - Schedule of Property, Plants and Equipment - USD ($)		Dec. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross		$ 151,666,180	$ 141,408,138
Less : Accumulated depreciation		(52,862,408)	(44,239,385)
Property, plant and equipment, net		98,803,772	97,168,753
Building [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	[1]	61,964,058	49,239,626
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	[2]	74,520,599	77,845,979
Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross		1,474,944	1,528,135
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross		695,383	1,810,825
Molds and Others [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross		$ 13,011,196	$ 10,983,573

[1] As of December 31, 2023, approximately $12.4 million of buildings held by Kandi Investment were pledged as collateral for the $8,178,574 long-term loan.

[2] As of December 31, 2023, machinery and equipment with carrying value totaling approximately $24.2 million were pledged to banks as collateral for credit limits and loans.

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Intangible Assets (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Intangible Assets [Abstract]
Amortization of intangible assets	$ 1,489,657	$ 1,965,490

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Intangible Assets (Details) - Schedule of Major Class of Our Intangible Assets, Other than Goodwill - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Intangible Assets (Details) - Schedule of Major Class of Our Intangible Assets, Other than Goodwill [Line Items]
Gross carrying amount	$ 15,608,085	$ 14,942,680
Less : Accumulated amortization	(5,702,024)	(4,317,103)
Less : Accumulated impairment for intangible assets	(3,510,236)	(2,631,465)
Intangible assets, net	$ 6,395,825	7,994,112
Minimum [Member]
Intangible Assets (Details) - Schedule of Major Class of Our Intangible Assets, Other than Goodwill [Line Items]
Remaining useful life	3 years
Patent [Member]
Intangible Assets (Details) - Schedule of Major Class of Our Intangible Assets, Other than Goodwill [Line Items]
Gross carrying amount	$ 4,818,262	4,938,765
Less : Accumulated amortization	$ (3,281,463)	(2,744,024)
Patent [Member] | Minimum [Member]
Intangible Assets (Details) - Schedule of Major Class of Our Intangible Assets, Other than Goodwill [Line Items]
Remaining useful life	1 year 6 months
Patent [Member] | Maximum [Member]
Intangible Assets (Details) - Schedule of Major Class of Our Intangible Assets, Other than Goodwill [Line Items]
Remaining useful life	3 years 2 months 1 day
Technology [Member]
Intangible Assets (Details) - Schedule of Major Class of Our Intangible Assets, Other than Goodwill [Line Items]
Gross carrying amount	$ 9,759,823	10,003,915
Less : Accumulated amortization	$ (2,391,950)	(1,573,079)
Technology [Member] | Minimum [Member]
Intangible Assets (Details) - Schedule of Major Class of Our Intangible Assets, Other than Goodwill [Line Items]
Remaining useful life	3 years
Technology [Member] | Maximum [Member]
Intangible Assets (Details) - Schedule of Major Class of Our Intangible Assets, Other than Goodwill [Line Items]
Remaining useful life	5 years
Customer Relation [Member]
Intangible Assets (Details) - Schedule of Major Class of Our Intangible Assets, Other than Goodwill [Line Items]
Gross carrying amount	$ 1,030,000
Less : Accumulated amortization	$ (28,611)
Customer Relation [Member] | Minimum [Member]
Intangible Assets (Details) - Schedule of Major Class of Our Intangible Assets, Other than Goodwill [Line Items]
Remaining useful life	2 years 11 months 1 day
Customer Relation [Member] | Maximum [Member]
Intangible Assets (Details) - Schedule of Major Class of Our Intangible Assets, Other than Goodwill [Line Items]
Remaining useful life	2 years 11 months 1 day

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Intangible Assets (Details) - Schedule of Amortization Expenses - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Schedule of Amortization Expenses [Abstract]
2024	$ 1,718,689
2025	1,657,930
2026	1,426,023
2027	820,390
2028	772,793
Thereafter
Total	$ 6,395,825	$ 7,994,112

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Land Use Rights (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Land Use Rights, Net [Abstract]
Amortization expenses	$ 84,471	$ 88,794

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Land Use Rights (Details) - Schedule of Land Use Rights - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Land Use Rights, Net [Abstract]
Cost of land use rights	$ 3,716,267	$ 3,809,211
Less: Accumulated amortization	(961,825)	(899,261)
Land use rights, net	$ 2,754,442	$ 2,909,950

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Land Use Rights (Details) - Schedule of Amortization Expense - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Schedule of Amortization Expenses [Abstract]
2024	$ 84,471
2025	84,471
2026	84,471
2027	84,471
2028	84,471
Thereafter	2,332,087
Total	$ 2,754,442	$ 2,909,950

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Other Long-Term Assets (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Other Long Term Assets [Line Items]
Amortization expense	$ 84,471	$ 88,794
Net value of land use right	5,443,448	5,697,720
Lease, amount	446,242	686,104
Hainan [Member]
Other Long Term Assets [Line Items]
Prepayments for land use right	3,738,418	3,917,226
Amortization expense	83,196	87,453
Jiangxi facility [Member]
Other Long Term Assets [Line Items]
Amortization expense	$ 115,204	$ 121,099

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Other Long-Term Assets (Details) - Schedule of Other Long-Term Assets - USD ($)		Dec. 31, 2023	Dec. 31, 2022
Schedule of Other Long Term Assets [Abstract]
Prepayments for land use right	[1]	$ 3,738,418	$ 3,917,226
Right - of - use asset	[2]	5,889,690	6,383,824
Others		365,022	329,861
Total other long-term asset		$ 9,993,130	$ 10,630,911

[1] As of December 31, 2023 and December 31, 2022, the Company’s other long term assets included net value of prepayments for land use right of Hainan facility of $3,738,418 and $3,917,226, respectively. As of December 31, 2023, the land use right of Hainan was not recognized since the land certificate is still in process. The amortization expense for the year ended December 31, 2023 and 2022 were $83,196 and $87,453, respectively.

[2] As of December 31, 2023 and December 31, 2022, the Company’s operating lease right-of-use assets in other long term assets included net value of land use right of Jinhua facility acquired in October 2020 and Jiangxi facility acquired in October 2021 of $5,443,448 and $5,697,720, respectively, as well as the amount of $446,242 and $686,104 related to the lease of Hangzhou office starting January 1, 2022. The amortization expense of land use right of Jinhua facility and Jiangxi facility for the year ended December 31, 2023 and 2022 were $115,204 and $121,099, respectively.

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Taxes (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Taxes [Line Items]
Tax benefit rate	51.92%	3.65%
Reduced income tax rate	15.00%
Research and development tax credits	25.00%
Income before taxes (in Dollars)	$ 3,500,000
Income before taxes (in Dollars)	13,300,000
Valuation allowances (in Dollars)	$ 13,400,638	$ 13,260,631
Corporate income tax percentage	25.00%	25.00%
Hainan Kandi Holding [Member]
Taxes [Line Items]
Reduced income tax rate	15.00%
Subsidiaries [Member]
Taxes [Line Items]
Corporation income tax	25.00%
PRC [Member]
Taxes [Line Items]
Net operating loss carried forward term	5 years
PRC, Hong Kong and U.S. [Member]
Taxes [Line Items]
Net operating loss (in Dollars)	$ 9,400,000	$ 8,500,000
High and New Technology Enterprise [Member] | Minimum [Member]
Taxes [Line Items]
Net operating loss (in Dollars)	700,000
High and New Technology Enterprise [Member] | Maximum [Member]
Taxes [Line Items]
Net operating loss (in Dollars)	$ 8,600,000
Corporation Income Tax [Member]
Taxes [Line Items]
Tax benefit rate	25.00%
HNTE [Member] | PRC [Member]
Taxes [Line Items]
Net operating loss carried forward term	10 years

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Taxes (Details) - Schedule of Income Tax Expenses - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Schedule of Income Tax Expenses [Line Items]
Provision for CIT	$ 1,599,668	$ (26,465)
Provision for CIT	203,236	(461,045)
Income tax expense (benefit)	$ 1,802,904	$ (487,510)

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Taxes (Details) - Schedule of Provision for Income Taxes - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Schedule of Provision for Income Taxes [Line Items]
Expected taxation at PRC statutory tax rate	$ 1,885,374	$ (3,334,633)
Effect of differing tax rates in different jurisdictions	650,434	(81,257)
Effect of PRC preferential tax rates	(2,471,114)	790,053
Non-taxable income	(898,290)	(1,984,855)
Non-deductible expenses	3,830,387	2,315,146
Research and development super-deduction	(1,516,020)	(1,672,428)
Over-accrued EIT for previous years	(431)	(538,545)
Addition to valuation allowance	467,366	2,800,862
Foreign tax credit	(70,708)	(84,045)
Other (including intercompany transaction )	(74,094)	1,302,192
Income tax expense (benefit)	$ 1,802,904	$ (487,510)

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Taxes (Details) - Schedule of Net Deferred Tax Assets and Liabilities - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Deferred tax assets:
Accruals and reserves	$ 6,388,121	$ 6,759,952
Loss carried forward	9,412,846	8,547,725
Total deferred tax assets	15,800,967	15,307,677
Deferred tax liabilities:
Expense	(345,033)	(212,143)
Tangible	(218,406)	(207,905)
Intangible	(763,627)	(1,146,339)
Revenue	(1,222,344)	(426,504)
Total deferred tax liability	(2,549,410)	(1,992,891)
Net deferred tax assets	13,251,557	13,314,786
less: valuation allowance	(13,400,638)	(13,260,631)
Net deferred tax (liabilities) assets, net of valuation allowance	$ (149,081)	$ 54,155

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Taxes (Details) - Schedule of Income (Loss) Before Income Taxes Prc and Non-Prc Sources - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Schedule of Income (Loss) Before Income Taxes Prc and Non-Prc Sources [Line Items]
Total	$ 3,472,671	$ (13,338,534)
PRC [Member]
Schedule of Income (Loss) Before Income Taxes Prc and Non-Prc Sources [Line Items]
Total	23,550,796	(10,448,802)
Non-PRC [Member]
Schedule of Income (Loss) Before Income Taxes Prc and Non-Prc Sources [Line Items]
Total	$ (20,078,125)	$ (2,889,732)

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Taxes (Details) - Schedule of Net Change Valuation Allowance of Deferred Tax Assets	12 Months Ended
	Dec. 31, 2023 USD ($)
Net change of valuation allowance of Deferred tax assets
Balance at December 31,2022	$ 13,260,631
Additions-change to tax expense	467,366
Prior year true up	(5,478)
Exchange rate difference	(321,881)
Balance at December 31,2023	$ 13,400,638

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Taxes (Details) - Schedule of Income Tax Expense - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Schedule of Income Tax Expense [Line Items]
Tax benefit (holiday) credit	$ 2,421,539	$ 1,202,615
Basic net income per share effect	$ 0.03	$ 0.02

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Leases and Right-of-Use-Assets (Details) - USD ($)			12 Months Ended
	Oct. 31, 2021	Oct. 31, 2020	Dec. 31, 2023	Dec. 31, 2022	Jan. 01, 2022
Leases and Right-of-Use-Assets [Abstract]
Land use right of gross value	$ 2,800,000	$ 3,500,000
Lease term					48 months
Discount rate					3.70%
Lease amount			$ 490,198	$ 490,198
Operating lease right-of-use assets			5,889,690
Lease liability			445,948
Operating lease expense			$ 338,233	$ 355,541

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Leases and Right-of-Use-Assets (Details) - Schedule of Information Related to Operating Leases - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Schedule of Information Related to Operating Leases [Abstract]
Cash payments for operating leases	$ 338,233	$ 355,541

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Leases and Right-of-Use-Assets (Details) - Schedule of Maturities of Lease Liabilities	Dec. 31, 2023 USD ($)
Schedule of Maturities of Lease Liabilities [Abstract]
2024	$ 218,924
2025	$ 227,024

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Contingent Consideration Liability (Details) ¥ in Millions		12 Months Ended
	Sep. 30, 2022 shares	Dec. 31, 2023 USD ($)	Jul. 12, 2023 shares	Dec. 31, 2022 USD ($)	Oct. 31, 2021 USD ($) shares	Oct. 31, 2021 CNY (¥) shares
Contingent Consideration Liability [Line Items]
Cash on hand					$ 7,900,000	¥ 50
Supplementary agreement, description		Pursuant to the No.2 Supplementary Agreement, the Transferors have the right to obtain 858,770 KNDI shares in each of the below-mentioned periods, provided that Jiangxi Huiyi achieves a net income of 1) RMB 8 million yuan or more during the period from July 1, 2021 to September 30, 2022 (“Period I”); 2) RMB 15 million yuan or more during the period from October 1, 2022 to September 30, 2023 (“Period II”); 3) RMB 15 million yuan or more during the period from October 1, 2023 to September 30, 2024 (“Period III”). If the net income of Jiangxi Huiyi fails to reach the respective target number in any of the three periods, the shares that the Transferors are entitled to obtain in that period will be adjusted accordingly: 1) if the difference between the net income in each Period and its Target Number is less than or equivalent to 20% of its Target Number (RMB 8 Million in Period I or RMB 15 Million in Period II or Period III), the transferee or KNDI has right to directly subtract 171,754 KNDI shares from the total make good shares, and the Transferor are entitled to obtain 687,016 KNDI shares; 2) if the difference between the net income in each Period and its Target Number (RMB 8 Million in Period I or RMB 15 Million in Period II or Period III) is more than 20% of its Target Number but less than 40% of its Target Number, the transferee or KNDI has the right to directly subtract 343,508 KNDI shares from the total make good shares, and the Transferors have the right to obtain 515,262 KNDI shares; 3) if the difference between the net income in each Period and its Target Number (RMB 8 Million in Period I or RMB 15 Million in Period II or Period III) is greater than or equal to 40% of its Target Number, the transferee of KNDI has the right to directly subtract 858,770 KNDI shares from the total make good shares, and the Transferors will not have the right to obtain any shares in such year.
Received shares	858,770
Contingent consideration liability | $		$ 2,693,000		$ 1,803,000
SC Autosports [Member]
Contingent Consideration Liability [Line Items]
Percentage of equity					100.00%	100.00%
Common Stock [Member]
Contingent Consideration Liability [Line Items]
Shares issued					2,576,310	2,576,310
Restrictive Stock [Member]
Contingent Consideration Liability [Line Items]
Total share issued			3,951,368

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Contingent Consideration Liability (Details) - Schedule of Contingent Consideration Liability - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Business Acquisition, Contingent Consideration [Line Items]
Total contingent consideration liability	$ 2,693,000	$ 1,803,000
Jiangxi Huiyi [Member]
Business Acquisition, Contingent Consideration [Line Items]
Total contingent consideration liability		1,803,000
NGI [Member]
Business Acquisition, Contingent Consideration [Line Items]
Total contingent consideration liability	$ 2,693,000

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Common Shares (Details) - USD ($)			12 Months Ended
	Jun. 09, 2023	May 25, 2023	Dec. 31, 2023	Dec. 31, 2022	Nov. 21, 2023
Common Shares [Line Items]
Repurchase common stock					$ 30,000,000
Restricted shares		300,000	184,566
Repurchase per share			$ 2.75
Shares of common stock			68,019	5,000,000
Additional paid-in capital			$ 9,807,820
Expenses for stock issued			$ 1,083,000
Board of Directors [Member]
Common Shares [Line Items]
Shares of common stock	3,488,559

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Stock Options (Details) - USD ($)						12 Months Ended
	Jul. 31, 2023	Jul. 01, 2023	Jun. 09, 2023	Sep. 07, 2022	May 29, 2015	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Stock Options [Line Items]
Shares of common stock granted (in Shares)						68,019	5,000,000
Exercise price (in Dollars per share)		$ 3.96				$ 3.7	$ 3.24	$ 9.72
Vesting period						3 years
Stock compensation expense (in Dollars)		$ 172,601		$ 6,704,829
Volatility rate				79.83%		78.08%
Expected term				10 years		10 years
Risk free interest rate				3.27%		3.81%
Dividend rate				0.00%		0.00%
Fair value options issued (in Shares)	68,019			5,000,000	900,000	1,666,661
Price per share option (in Dollars per share)	$ 2.54			$ 1.34	$ 8.16
Stock based compensation (in Dollars)						$ 1,083,000
Common Stock [Member]
Stock Options [Line Items]
Shares of common stock granted (in Shares)		68,019
Equity Option [Member]
Stock Options [Line Items]
Vesting period						3 years
Stock based compensation (in Dollars)						$ 3,476,058	$ 1,231,566
Board of Directors [Member]
Stock Options [Line Items]
Shares of common stock granted (in Shares)			3,488,559
Exercise price (in Dollars per share)				$ 2.07
Board of Directors [Member] | Equity Option [Member]
Stock Options [Line Items]
Shares of common stock granted (in Shares)				5,000,000

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Stock Options (Details) - Schedule of Stock Option Activities - $ / shares					12 Months Ended
	Jul. 31, 2023	Jul. 01, 2023	Sep. 07, 2022	May 29, 2015	Dec. 31, 2023	Dec. 31, 2022
Schedule Of Stock Option Activities Abstract
Number of Shares, Outstanding as of Beginning Balance					5,900,000	900,000
Weighted Average Exercise Price, Outstanding as of Beginning Balance (in Dollars per share)					$ 3.24	$ 9.72
Number of Shares, Outstanding as of Ending Balance					4,301,358	5,900,000
Weighted Average Exercise Price, Outstanding as of Ending Balance (in Dollars per share)		$ 3.96			$ 3.7	$ 3.24
Number of Shares, Granted					68,019	5,000,000
Weighted Average Exercise Price, Granted (in Dollars per share)					$ 3.96	$ 2.07
Number of Shares, Exercised	(68,019)		(5,000,000)	(900,000)	(1,666,661)
Weighted Average Exercise Price, Exercised (in Dollars per share)					$ 2.07
Number of Shares, Cancelled
Weighted Average Exercise Price, Cancelled (in Dollars per share)
Number of Shares, Forfeited

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Stock Award (Details) ¥ in Millions										12 Months Ended
	Sep. 18, 2023 shares	Aug. 28, 2023 shares	Jul. 01, 2023 shares	May 15, 2023 shares	May 05, 2023 shares	Apr. 29, 2023 shares	Jan. 10, 2023 shares	May 10, 2022 shares	May 15, 2020 shares	Dec. 31, 2023 USD ($) shares	Dec. 31, 2023 CNY (¥) shares	Dec. 31, 2022 USD ($) shares
Stock Award [Line Items]
Shares of common stock granted										68,019	68,019	5,000,000
Net profit										$ 21,719,613	¥ 150
Annual net profit										$ 7,239,871	¥ 50
Incentive shares										5,957,811	5,957,811
Net profit percentage										60.00%	60.00%
Restricted Shares	1,985,937	5,957,811
Employee stock award expenses (in Dollars) | $										$ 6,500,743		$ 694,810
Equity Incentive Agreement [Member]
Stock Award [Line Items]
Net profit percentage										60.00%	60.00%
Mr. Henry Yu [Member]
Stock Award [Line Items]
Restricted common stock										5,000	5,000
Mr. Jerry Lewin [Member]
Stock Award [Line Items]
Restricted common stock										5,000	5,000
Ms. Kewa Luo [Member]
Stock Award [Line Items]
Shares of common stock										2,500	2,500
Mr. Jehn Ming Lim [Member]
Stock Award [Line Items]
Shares of common stock				10,000					6,000
Dr. Xueqin Dong [Member]
Stock Award [Line Items]
Shares of common stock							20,000
Management Members And Employees [Member]
Stock Award [Line Items]
Shares of common stock granted			588,019		588,019	588,019		238,600
Restricted Shares [Member] | Project management team [Member]
Stock Award [Line Items]
Restricted Shares	5,957,811

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Commitments and Contingencies (Details) ¥ in Millions			9 Months Ended
	Mar. 15, 2023 USD ($)	Mar. 15, 2023 CNY (¥)	Sep. 30, 2023 USD ($)	Apr. 30, 2017 USD ($)
Commitments and Contingencies [Line Items]
Guarantee contract	$ 2,828,934	¥ 20
Paid settlement amount			$ 710,000
Shanghai Pudong Development Bank [Member]
Commitments and Contingencies [Line Items]
Principal amount				$ 2,900,000

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Segment Reporting (Details)	12 Months Ended
	Dec. 31, 2023 Segment
Segment Reporting [Abstract]
Number of operating segment	1

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Segment Reporting (Details) - Schedule of Forth Disaggregation of Revenue - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Disaggregation of Revenue [Line Items]
Revenues	$ 123,599,232	$ 117,813,049
Sales transactions completed at a point in time	239,476
Commission income	239,476
Timing of revenue recognition [Member]
Disaggregation of Revenue [Line Items]
Revenues	123,599,232	117,813,049
U.S. and other countries/areas [Member] | Primary geographical markets [Member]
Disaggregation of Revenue [Line Items]
Revenues	93,979,363	65,871,112
China [Member] | Primary geographical markets [Member]
Disaggregation of Revenue [Line Items]
Revenues	29,619,869	51,941,937
EV parts [Member] | Major Products [Member]
Disaggregation of Revenue [Line Items]
Revenues	5,807,973	8,964,094
EV products [Member] | Major Products [Member]
Disaggregation of Revenue [Line Items]
Revenues	1,214,786	7,926,233
Off-road vehicles and associated parts [Member] | Major Products [Member]
Disaggregation of Revenue [Line Items]
Revenues	106,983,891	70,622,278
Electric Scooters, Electric Self-Balancing Scooters and associated parts [Member] | Major Products [Member]
Disaggregation of Revenue [Line Items]
Revenues	683,952	4,616,683
Battery exchange equipment and Battery exchange service [Member] | Major Products [Member]
Disaggregation of Revenue [Line Items]
Revenues	674,927	1,691,486
Lithium-ion cells [Member] | Major Products [Member]
Disaggregation of Revenue [Line Items]
Revenues	7,994,227	23,992,275
Products transferred at a point in time [Member] | Timing of revenue recognition [Member]
Disaggregation of Revenue [Line Items]
Revenues	$ 123,359,756	$ 117,813,049

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Acquisitions (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Nov. 30, 2023	Jul. 12, 2023
Acquisitions [Line Items]
Purchase price	$ 13,000,000
Trading days	20 days
Price of per share (in Dollars per share)	$ 3.29
Common stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Equity transfer agreement, description	Pursuant to the terms of the Equity Transfer Agreement and the Supplementary Agreement, dated as of March 12, 2024, the escrow restrictions on the KNDI Stock shall be removed sequentially based on the following conditions: 1) when NGI achieves pretax income of $4.6 million or more (“Profit Target I”) during the period from December 1, 2023 to November 30, 2024, 2,431,612 shares of KNDI Stock Transferor holds shall be fully vested by removing the escrow restriction. Notwithstanding the above, the Transferor, on December 31, 2023, can apply for vesting certain number of shares, but no more than 1,418,440 shares, with its value equal to the actual amount of pre-tax income achieved hereinunder (for example: if the pre-tax income is $3.5 million, 1,063,830 shares (3,500,000/3.29=1,063,830) shall be fully vested and without escrow restriction); 2) when NGI achieves pretax income of $5.25 million or more (“Profit Target II”) during the period from December 1, 2024 to November 30, 2025, 759,878 shares of KNDI Stock Transferor holds shall be fully vested by removing its escrow restriction; and 3) when NGI achieves pretax income of $6 million or more (“Profit Target III”, collectively with Profit Target I, and Profit Target II, “Profit Targets”) during the period from December 1, 2025 to November 30, 2026, 759,878 shares of KNDI Stock Transferor holds shall be fully vested by removing the escrow restriction. If NGI fails to reach any of the Profit Targets in any period as mentioned above, the number of KNDI Stock to be removed escrow restriction in that period shall be adjusted based on the percentage of the actual achieved pretax income. If there is any loss incurred in that period, the Transferor shall assume the loss.
Contingent liability	$ 2,700,000
Transaction costs	45,267
Revenue	0.0000002
Operating income	0.006641
Revenue	123,599,232	$ 117,813,049
Loss from operations	3,500,000
Net income	$ 7,132	$ (12,123,663)
Restricted Shares [Member]
Acquisitions [Line Items]
Total restricted shares (in Shares)	3,951,368			3,951,368
Restrictive Common Stock [Member]
Acquisitions [Line Items]
Total restricted shares (in Shares)	3,951,368
NGI [Member]
Acquisitions [Line Items]
Percentage of owner			100.00%
Pro Forma [Member]
Acquisitions [Line Items]
Revenue	$ 127,578,305
Loss from operations	12,544,014
Net income	$ 2,177,924

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Acquisitions (Details) - Schedule of Preliminary Purchase Price as of the Acquisition Date	12 Months Ended
	Dec. 31, 2023 USD ($)
Acquisition [Line Items]
Fair value of contingent consideration	$ 2,693,000
Total	$ 2,693,000

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Acquisitions (Details) - Schedule of Preliminary Purchase Price Allocations - Northern Group, Inc [Member]	12 Months Ended
	Dec. 31, 2023 USD ($)
Acquisitions (Details) - Schedule of Preliminary Purchase Price Allocations [Line Items]
Goodwill	$ 1,139,438
Amortizable intangible assets	1,030,000
Other net assets	523,562
Total	$ 2,693,000

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Acquisitions (Details) - Schedule of Preliminary Purchase Price to Specific Intangible Asset	Dec. 31, 2023 USD ($)
Finite-Lived Intangible Assets [Line Items]
Amount Assigned	$ 1,030,000
Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life (in years)	3 years

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Subsequent Event (Details) - Subsequent Event [Member]	Feb. 28, 2024 $ / shares shares
Subsequent Event [Line Items]
Repurchased, shares | shares	540,362
Stock price, per share | $ / shares	$ 2.74