Microvast Holdings faces a securities class action alleging it overstated margin targets and Huzhou expansion progress. Shares fell 34.2 percent after the company reported a $32.5 million inventory impairment and missed revenue estimates. Investors have until September 21, 2026 to seek lead plaintiff status.
Microvast Holdings faces a securities class action alleging it overstated margin targets and Huzhou expansion progress, after shares fell 34.2 percent.
"Timely disclosure of material developments is fundamental to fair and efficient markets," Joseph E. Levi, founding partner at Levi & Korsinsky, said. "Investors were told to expect capacity and margin progress before later announcements described delayed production, customer ramp issues, and a $32.5 million inventory impairment."
The lawsuit, filed in the U.S. District Court for the Southern District of Texas, covers investors who purchased Microvast securities between April 1, 2025 and March 16, 2026. The complaint alleges the company projected 2025 revenue of $450 million to $475 million with a 30 percent gross margin target and said its Huzhou Phase 3.2 expansion in China would begin qualified production by Q4 2025. Microvast instead reported Q4 2025 revenue of $96.5 million versus the $136.4 million consensus estimate and a gross margin of 1.0 percent, driven by a $32.5 million inventory impairment tied to specialized ESS components.
MVST shares closed at $1.52 on March 17, 2026, down 34.2 percent. Investors have until September 21, 2026 to seek lead plaintiff status. Rosen Law Firm, Holzer & Holzer, Bragar Eagel & Squire, and Robbins LLP are among the firms soliciting affected shareholders.
The complaint details a sequence of disclosure events during the class period. On June 25, 2025, Grizzly Research published a short-seller report alleging Microvast overstated business capabilities and Huzhou facility activity. The company's CFO departed in early August 2025 after roughly three months in the role, sending shares down 9.93 percent to $2.72. In November 2025, Microvast pushed the Huzhou Phase 3.2 initial production timeline to Q1 2026, and shares fell 10 percent to $4.48.
The lawsuit also alleges the company failed to disclose inventory management issues and delays in commercial vehicle rollouts by customers in the EMEA region, which undermined its ability to reach margin targets.
Microvast, which supplies lithium-ion battery systems for commercial vehicles, competes with larger players including CATL and BYD in the Chinese battery market. The class action adds to legal and operational headwinds for the company as it navigates the delayed expansion and margin compression.
For investors, the September 21 lead plaintiff deadline is the next key date. The court will appoint a lead plaintiff to direct the litigation, and any settlement or recovery would be distributed to eligible class members who purchased during the class period.
This article is for informational purposes only and does not constitute investment advice.
