Company: FLYE
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001213900-25-078571
Chunk: 156

Company: Fly-E Group, Inc.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 8
Chunk 156
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purchasing, enhances our negotiating power and maintains strong vendor relationships. We believe this approach delivers cost savings,
improved risk management and increased negotiating power, ultimately benefiting our operating results. Changes in costs related to our
major vendors can significantly affect our financial condition and operating results.

Market Trends, Competition and Tariff

We operate in a rapidly growing EV market with a special focus on
E-motorcycles, E-bikes and E-scooters. However, increased competition may pressure prices and margins, reducing sales volume, revenues,
and sales margin for us. Additionally, marketing and advertising costs may rise as we differentiate ourselves and maintain our market
position. Moreover, competitors may impact customer acquisition and retention, satisfaction and loyalty. While we believe we maintain
competitive advantages in several areas, including brand, product design and quality, smart features, omnichannel retail model, customer
satisfaction and loyalty, we must continuously innovate, invest in research and development and marketing to maintain our competitive
edge and unique selling points. Recently, the U.S. government issued executive orders imposing tariffs on products from key international
suppliers, citing national security and public health concerns. These tariffs are expected to impact a wide range of imported goods,
including components used in e-bike and e-scooter manufacturing. While some agreements have temporarily delayed their implementation,
ongoing trade tensions could lead to supply chain disruptions, increased costs, and pricing pressures within the industry. Tariffs on
e-bikes and e-scooters or their components would likely increase prices for consumers, and create challenges for U.S. manufacturers and
retailers. While there could be long-term opportunities for domestic production, the immediate impact would likely be negative for the
growing e-bike and e-scooter market.

Regulatory Landscape

We operate in an industry that is subject to extensive environmental,
safety and other laws and regulations, which include products safety and testing, as well as battery safety and disposal. These requirements
create additional costs and possible production delay in connection with the testing and manufacturing of our products. We also benefit
from environmental regulations in our target markets which include economic incentives to purchasers of EVs and tax credits for EV manufacturers.
The Governor of New York State signed a legislative package in July 2024 aimed at raising awareness about the safe use of e-bikes and
lithium-ion battery products, prohibiting the sale of non-compliant batteries, requiring safety protocols and training for first responders,
mandating operating manuals for e-b