On the crest of the new energy era, Guoxian Kotech is staging a modern version of "a prosperous age with hidden dangers." The company is advancing rapidly in terms of revenue scale, painting an ambitious blueprint for globalization and technological iteration. On the other hand, it has to face major setbacks in its overseas strategy, weak profitability in its core business, and a strong reliance on government "support."

The Michigan Setback: Global Ambitions Meet Geopolitical Cold Winds

Guoxian Kotech's internationalization process encountered an irreversible setback in the most challenging U.S. market. That highly anticipated $2.4 billion battery factory project in Michigan was originally planned to build an integrated base for cell and material production with an annual capacity of over 40 GWh in Macost County, and it promised to create 2,350 high-paying jobs, but eventually ended in failure amidst geopolitical tensions and local opposition.

The project initially received strong support from the Michigan state government and successfully secured a total of $540 million in tax exemptions and $175 million in subsidy commitments. However, the project quickly fell into controversy. Local environmental groups launched protests, citing "wetland destruction," and the opposition soon became politicized. Republican legislators such as John Mulleran used the opportunity to hype up the "national security" issue, claiming that the factory was only 160 kilometers away from the National Guard base, and pushed legislation to cut public funding support.

Eventually, the Michigan Economic Development Corporation (MEDC) determined the project to be in breach of contract and formally terminated the collaboration in October 2025. The state government not only canceled the remaining $175 million in tax incentives and subsidies but also required Guoxian Kotech to refund the previously allocated $23.6 million (approximately RMB 170 million) land subsidy payment. This caused significant setbacks for Guoxian Kotech's overseas expansion plans in the U.S., and the company's lawyers expressed "extreme anger," calling it a biased act of misrepresentation by the locals.

Faced with systemic risks in building factories in the U.S., Guoxian Kotech had to accelerate adjustments to its global layout, shifting its expansion focus to politically stable markets in Europe and North Africa. It accelerated the construction of battery production bases in Morocco (total investment of about RMB 46.996 billion, with a planned capacity of 20 GWh) and Slovakia (investment of about RMB 19 billion), aiming to compensate for losses in the U.S. market and cater to European market demand.

Financial Statements "Without Makeup": Secrets of Profit and the Burden of Subsidies

The setbacks in overseas expansion contrast sharply with the difficulties faced by the company's core business in terms of profitability.

Guoxian Kotech's third-quarter 2025 financial statements appeared bright and glossy. In the first three quarters of the year, the company achieved a net profit attributable to shareholders of 2.533 billion yuan, a staggering increase of 514.35% year-on-year; in just the third quarter alone, the net profit attributable to shareholders reached 2.167 billion yuan, a year-on-year growth of 1,434.42%, which is impressive.

However, once this "beauty filter" is removed, the truth becomes evident. The source of the huge profits mainly came from the equity investment in Chery Automobile - Chery officially listed on the Hong Kong Stock Exchange in September 2025, and the stock price gains significantly boosted Guoxian Kotech's performance.

However, as an indicator of the core business profitability, the company's non-recurring net profit after deduction was only 85 million yuan in the first three quarters, and in the third quarter, it was even lower at 12.507 million yuan, indicating the fragility of its core business profitability.

In the "non-recurring income" supporting the company's operations and financial data, government subsidies played a crucial role. In the first three quarters of 2025, Guoxian Kotech received a total of 537 million yuan in government subsidies. Looking at historical data, this dependence has long been present: from 2019 to 2022, Guoxian Kotech suffered cumulative losses of more than 1.4 billion yuan in non-recurring net profit for four consecutive years, while the total government subsidies received during the same period amounted to as much as 2.38 billion yuan. From 2019 to the first half of 2025, the company has accumulated more than 4.88 billion yuan in government subsidies. Despite such a high level of "blood transfusion," the company's non-recurring net profit remained in a loss position, highlighting its high dependence on policy dividends for its profit model, and government subsidies have become a key "life-saving drug" for the company's survival and cash flow maintenance.

The Bet on Solid-State Batteries: Technological Revolution or Capital Showmanship?

Facing weak core business profitability, high debt ratio, and short-term capital gaps, Guoxian Kotech once again turned to "telling stories about technology" to boost market confidence and attract new funding support.

The company's "Jinshi" all-solid-state battery became its ace card, claiming an energy density of up to 350 Wh/kg, already in the pilot production stage, with a yield rate of 90%, and has started designing a 2 GWh production line, which is expected to be paired with high-end car manufacturers like Porsche as early as 2027.

However, under the aggressive production schedule, the practical challenges facing solid-state batteries are astonishing, leading to doubts about whether it is a technological breakthrough or a marketing gimmick aimed at national subsidies.

To achieve large-scale commercialization, cost barriers are the core challenge. Currently, the cost of solid-state batteries is 4 to 10 times higher than that of traditional liquid lithium-ion batteries (laboratory prices can reach as high as 4.8 yuan/Wh, while the cost of liquid battery packs is only about 0.65 yuan/Wh). Additionally, the production process is complex, with the construction cost of sulfur-based electrolyte production lines being three times that of traditional production lines, and the raw material costs are extremely high, leading to huge manufacturing costs.

At the same time, the large-scale production of solid-state batteries remains in the engineering difficulty phase, and issues such as technological iteration, interface stability, yield, and cost control have yet to be resolved. Industry consensus suggests that achieving commercially competitive costs for solid-state batteries is difficult, and it is expected to take until after 2030 before it becomes feasible.

Under the long-term reliance on non-recurring income and subsidies to maintain its core business, Guoxian Kotech has received 1.5 billion yuan in special funds for solid-state battery R&D and industrialization from the Ministry of Industry and Information Technology. This substantial R&D funding has raised market concerns about whether the company is using the grand narrative of the "solid-state battery revolution" to secure resources from the government and capital markets, thereby alleviating its financial pressure and the problem of "blood loss" in its core business. However, the company's future cannot rely solely on technical concepts to support its nearly hundredfold dynamic P/E ratio. The development of solid-state batteries must be able to transform into real productivity.

In other words, the next step of Guoxian Kotech's fate will depend on whether it can truly convert technology into verifiable production capacity and commercial profits, rather than continuing to rely on the wind of policies to maintain superficial prosperity.

Original article: toutiao.com/article/7581371117733282345/

Statement: The article represents the views of the author himself.