On the evening of November 25, Longzhou Co., Ltd. released two official announcements, revealing that its indirectly wholly-owned subsidiary, Dongguan Zhongqi Hongyuan Automobile Co., Ltd., has become embroiled in two significant legal disputes arising from sales contract controversies. Both lawsuits have been formally submitted to the First People's Court of Dongguan City and are currently awaiting a verdict in their initial court proceedings. Zhongqi Hongyuan stands as the defendant in both legal battles, with the plaintiffs being Dongguan Bus Co., Ltd. and Dongguan City Bus Transportation Co., Ltd., respectively. The financial stakes in these cases are substantial, with claims amounting to RMB 205 million and RMB 226 million, summing up to a staggering total of approximately RMB 431 million.

The root cause of both lawsuits can be traced back to battery malfunctions in the pure electric buses that Zhongqi Hongyuan sold in 2018. Both Dongguan Bus Co., Ltd. and Dongguan City Bus Transportation Co., Ltd. are demanding that Zhongqi Hongyuan honor its warranty commitments and provide compensation for the operational losses incurred as a result. In response to these demands, Zhongqi Hongyuan has reached a consensus with the plaintiffs regarding warranty and maintenance issues. The after-sales maintenance work has been duly completed, and the relevant expenses have been accounted for. Longzhou Co., Ltd. has further stated its intention to press Zhongqi Hongyuan to pursue reimbursement from Microvast Power Systems Co., Ltd. for the maintenance costs and compensation for the operational losses sustained.