Company: CENN
Filing Date: 2025-04-01
Form Type: 10-K
Source: 0001140361-25-011607
Chunk: 23

Company: Cenntro Inc.
Filing Date: 2025-04-01
Form: 10-K
Item: Item 1
Chunk 23
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 and the company’s product line allowing Cenntro’s EVCs to gain early market
          share.

Suppliers and Customers

Our Integrated Supply Chain

We have invested significant time and resources in developing a supply chain capable of providing all of the components and materials necessary to manufacture our ECVs. Our
          integrated supply chain is comprised of over 500 suppliers located in China and various other countries. Our vehicle designs share many of the same component parts, including the battery module, battery control, motor control and vehicle control,
          allowing us to achieve significant cost efficiencies in our supply chain. Generally, our suppliers undergo rigorous testing before we onboard them as a supplier, including quality and process auditing, product verification, regulatory compliance
          and reliability testing. Our suppliers must demonstrate that they can consistently deliver their specialized parts on time, while meeting our quality and product specifications. Many of our components are based on Cenntro-developed designs, and
          our suppliers are contractually restricted from selling our customized components to any third parties unless we discontinue our purchases from such suppliers.

Currently, materials and components for our Metro® are shipped to our Changxing facilities and for Teemak, LS300, and LS400 are shipped to our Yangzhong facilities, where we
          manufacture key components for and vehicle kits or completed vehicle of our Metro®, Teemak, LS300, and LS400 models for assembly and shipment. Components for our new ECV models are shipped directly to our assembly and manufacturing sites that
          fully assemble vehicles for their local markets. Since substantially all of our manufacturing to date has been conducted in China (through both our facilities and those of our manufacturing partners), sourcing our components in China has been
          more cost-effective than sourcing components outside of China, and we believe it has reduced risks arising from shipping delays and importing inefficiencies.

In the long-term, through our deep supply chain development know-how, we plan to geographically expand our supply chain to support our planned growth. More specifically, we intend
          to establish supply chain relationships in North America and the European Union to support our manufacturing and assembly needs in these markets, thereby reducing the time in transit and potentially the duties associated with importing our
          components and spare parts from China. We believe we can reduce the overall cost of ECV assembly by shifting to a “merge in transit” model, whereby component shipments from suppliers, including local market suppliers, are consolidated at our
          local assembly facilities for final ECV assembly.

Historically, we