Company: SCAG
Filing Date: 2025-11-12
Form Type: 20-F
Source: 0001213900-25-109190
Chunk: 93

Company: Scage Future
Filing Date: 2025-11-12
Form: 20-F
Item: Item 4
Chunk 93
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 vehicles. In the event that we are unable to renew our contract manufacturing agreements
with XCMG and/or C& C, we believe we can establish collaborations with other vehicle manufacturers possessing comparable capacity
and capability to meet our vehicle production demands, and we do not expect such termination to have a material adverse impact on our
operations, business or financial performance, or lead to any substantial delays in the manufacturing and delivery of our vehicles.

Manufacturing process

The manufacturing process
varies among the different models and different plants. The principal steps of the manufacturing process for our vehicles include the
following.

  Key component                                                                                  

  Stamping and                                                                    

  Painting. Through                                                                          

  Vehicle assembly. In                                                                            

  Testing. We                                                                                       

Our suppliers

We use various components
and raw materials in our business, including batteries, axles, motors, power distribution units and battery cooling systems. In our procurement
process, we choose suppliers based on a variety of factors, such as technological expertise, product quality, and reliable manufacturing
process. We have implemented supplier screening and quality control processes, including mold and prototype review, sample review, manufacturing
process tracking and on-site visits, to ensure the quality of components sourced from our suppliers. Additionally, we conduct quarterly
evaluations of our suppliers’ performance. As of June 30, 2025, the majority of our suppliers had been certified with ISO
9001, ISO 14001 and other management system certificates.

We purchase our components
and materials from suppliers in China. We source from approximately 220 suppliers for approximately 2,800 components and parts for our
vehicles. While we aim to diversify our component sources whenever possible, we nevertheless rely on a single source for many of the
components used in our vehicles like other automobile companies.

The prices for our raw materials
and components are subject to fluctuations, which can impact our business and operating results. To mitigate price risks on the procurement
side, we have entered into framework and pricing agreements with our suppliers to manage price volatility.

As of the date of this annual
report, we have not experienced, and do not expect to experience, (1) higher costs due to constrained capacity or increased commodity
prices or challenges sourcing materials, (2) surges or declines in consumer demand for which we are unable to adequately adjust
our supply; (3) inability to supply products at competitive prices due to export restrictions, sanctions, tariffs trade barriers or political
or trade tensions among countries and (4) cybersecurity attacks