UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 Washington,
D.C. 20549

 FORM

 (Mark
One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the fiscal year ended: December 31, 2024

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the transition period from ____________to _____________

 Commission
File No. 001-32898

 CBAK

 (Exact
Name of Registrant as Specified in Its Charter)

 Nevada

 88-0442833

 (State or other jurisdiction of

 (I.R.S. Employer

 incorporation or organization)

 Identification No.)

 CBAK Industrial Park, Meigui Street,
 Huayuankou

 Economic Zone, Dalian City, Liaoning
 Province, China

 116450

 (Address of principal executive offices)

 (Zip Code)

 (86)
(411)-3918-5985

 (Registrant's
telephone number, including area code)

 Securities
registered pursuant to Section 12(b) of the Act:

 Title of each class

 Trading Symbol(s)

 Name of each exchange on which registered

 Common Stock, $0.001 par value

 CBAT

 The Nasdaq Stock Market LLC

 Securities
registered pursuant to Section 12(g) of the Act: None

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes No

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes No

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer,"
"smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large Accelerated Filer

 Accelerated Filer

 Non-Accelerated Filer

 Smaller reporting company

 Emerging growth company

 If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes No

 As of June 28, 2024 (the last business day of
the registrant's most recently completed second fiscal quarter), the aggregate market value of the shares of the registrant's
common stock held by non-affiliates (based upon the closing sale price of $1.37 per share) was approximately $ 107.3 million. Shares of
the registrant's common stock held by each executive officer and director and by each person who owns 10% or more of the outstanding
common stock have been excluded from the calculation in that such persons may be deemed to be affiliates of the registrant. This determination
of affiliate status is not necessarily a conclusive determination for other purposes.

 There
were a total of 89,939,662 shares of the registrant's common stock outstanding as of March 14, 2025.

 DOCUMENTS
INCORPORATED BY REFERENCE

 None.

 CBAK

 Annual
Report on Form 10-K

 TABLE
OF CONTENTS

 Item 1.

 Business

 Item 1A.

 Risk Factors

 Item 1B.

 Unresolved Staff Comments

 Item 1C.

 Cybersecurity

 Item 2.

 Properties

 Item 3.

 Legal Proceedings

 Item 4.

 Mine Safety Disclosures

 PART
 II

 Item 5.

 Market for Registrant's
 Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6.

 [Reserved]

 Item 7.

 Management's Discussion
 And Analysis Of Financial Condition And Results Of Operations

 Item 7A.

 Quantitative And Qualitative
 Disclosures About Market Risk

 Item 8.

 Financial Statements and Supplementary
 Data

 Item 9.

 Changes in and Disagreements
 With Accountants on Accounting and Financial Disclosure

 Item 9A.

 Controls and Procedures

 Item 9B.

 Other Information

 Item 9C.

 Disclosure Regarding
 Foreign Jurisdictions that Prevent Inspections

 PART
 III

 Item 10.

 Directors, Executive
 Officers and Corporate Governance

 Item 11.

 Executive Compensation

 Item 12.

 Security Ownership Of
 Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13.

 Certain Relationships
 and Related Transactions, And Director Independence

 Item 14.

 Principal Accountant
 Fees and Services

 PART
 IV

 Item 15.

 Exhibits, Financial
 Statement Schedules

 Item 16.

 Form 10-K Summary

 i

 INTRODUCTORY
NOTE

 Use of
Terms

 Except
as otherwise indicated by the context and for the purposes of this report only, references in this report to:

 "BAK
 Asia" are to our Hong Kong subsidiary, China BAK Asia Holdings Limited;

 "CBAK
 Power" are to our PRC subsidiary, Dalian CBAK Power Battery Co., Ltd.;

 "Company",
 "we", "us" and "our" are to the combined business of
 CBAK Energy Technology, Inc., a Nevada corporation, and its consolidated subsidiaries;

 "Exchange
 Act" are to the Securities Exchange Act of 1934, as amended.

 "Hitrans"
are to our 67.33% owned PRC subsidiary, Zhejiang Hitrans Lithium Battery Technology (we hold 67.33% of registered equity interests of
Hitrans, representing 72.99% of paid-up capital).

 "Nanjing
 BFD" are to our PRC subsidiary, Nanjing BFD New Energy Technology Co., Ltd., a company
 that was previously named Nanjing Daxin New Energy Automobile Industry Co., Ltd. until February
 24, 2023;

 "RMB"
 are to Renminbi, the legal currency of China;

 "SEC"
 are to the United States Securities and Exchange Commission;

 "Securities
 Act" are to the Securities Act of 1933, as amended; and

 "U.S.
 dollar", "$" and "US$" are to the legal currency of the United
 States;

 ii

 Special
Note Regarding Forward Looking Statements

 Statements
contained in this report include "forward-looking statements" within the meaning of such term in Section 27A of the Securities
Act and Section 21E of the Exchange Act. Forward-looking statements involve known and unknown risks, uncertainties and other factors
which could cause actual financial or operating results, performances or achievements expressed or implied by such forward-looking statements
not to occur or be realized. Forward-looking statements made in this report generally are based on our best estimates of future results,
performances or achievements, predicated upon current conditions and the most recent results of the companies involved and their respective
industries. Forward-looking statements may be identified by the use of forward-looking terminology such as "may," "will,"
"could," "should," "project," "expect," "believe," "estimate,"
"anticipate," "intend," "continue," "potential," "opportunity" or similar
terms, variations of those terms or the negative of those terms or other variations of those terms or comparable words or expressions.

 Readers
are urged to carefully review and consider the various disclosures made by us in this report and our other filings with the U.S. Securities
and Exchange Commission (the "SEC"). These reports attempt to advise interested parties of the risks and factors that may
affect our business, financial condition and results of operations and prospects. New risks emerge from time to time. It is not possible
for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor,
or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may
make. The forward-looking statements made in this report speak only as of the date hereof and we disclaim any obligation to provide updates,
revisions or amendments to any forward-looking statements to reflect changes in our expectations or future events.

 Disclosures
Related to Our China-Based Operations

 CBAK
Energy Technology, Inc. is a holding company incorporated in Nevada, the United States, with no material operations of its own. We conduct
our business through our operating subsidiaries in China. This structure involves unique risks to investors, and you may never directly
hold equity interests in the operating entities.

 There
are significant legal and operational risks and uncertainties associated with having substantially all operations in China. The PRC government
has significant authority to exert influence on the ability of a company with substantial operations in China, like us, to conduct its
business, accept foreign investments or be listed on a U.S. stock exchange. For example, we face risks associated with PRC regulatory
approvals of offshore offerings, anti-monopoly regulatory actions, cybersecurity and data privacy, as well as with U.S. regulations,
for instance, the risk relating to lack of inspection from the U.S. Public Company Accounting Oversight Board, or PCAOB, on our auditors,
which is further discussed below under "—The Holding Foreign Companies Accountable Act" and in various risk factors
in "Item 1A. Risk Factors." The PRC government may also intervene with or influence our operations as the government deems
appropriate to further regulatory, political and societal goals. The PRC government publishes from time to time new policies that can
significantly affect our industry in which we operate and we cannot rule out the possibility that it will not in the future further release
regulations or policies regarding our industry that could adversely affect our business, financial condition and results of operations.
Any such action, once taken by the PRC government, could cause the value of our common stock to significantly decline or in extreme cases,
become worthless.

 The
PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions may be cited for
reference but have limited precedential value. China has not developed a fully integrated legal system, and recently enacted laws, rules
and regulations may not sufficiently cover all aspects of economic activities in China or may be subject to a significant degree of interpretation
by PRC regulatory agencies and courts. In particular, because these laws, rules and regulations are relatively new, and because of the
limited number of published decisions and the non-precedential nature of these decisions, and because the laws, rules and regulations
often give the relevant regulator significant discretion in how to enforce them, the interpretation and enforcement of these laws, rules
and regulations involve uncertainties and can be inconsistent and unpredictable. Therefore, it is possible that our existing operations
may be found not to be in full compliance with relevant laws and regulations in the future. In addition, the PRC legal system is based
in part on government policies and internal rules, some of which are not published on a timely basis or at all, and which may have a
retroactive effect. As a result, we may not be aware of our violation of these policies and rules until after the occurrence of the violation.

 iii

 The
PRC government has initiated a series of regulatory actions and made a number of public statements on the regulation of business operations
in China, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed
overseas using a variable interest entity ("VIE") structure, adopting new measures to extend the scope of cybersecurity reviews,
and expanding efforts in anti-monopoly enforcement. We do not believe that our subsidiaries in China are directly subject to these regulatory
actions or statements, as we have not carried out any monopolistic behavior, we have never adopted a VIE structure, and our business
does not involve any restricted industry or implicate cybersecurity.

 For
additional information, see "Risk Factors—Risks Related to Doing Business in China—The PRC government exerts substantial
influence over the manner in which we conduct our business activities. Its oversight and discretion over our business could result in
a material adverse change in our operations and the value of our common stock. Changes in laws, regulations and policies in China and
uncertainties with respect to the PRC legal system could materially and adversely affect us. In addition, rules and regulations in China
can change quickly" on page 19, "Risk Factors—Risks Related to Doing Business in China—Changes in U.S. and Chinese
regulations or in relations between the United States and China may adversely impact our business, our operating results, our ability
to raise capital and the value of our securities. Any such changes may take place quickly and with very little notice" on page
21 and Risk Factors—Risks Related to Doing Business in China—There are uncertainties regarding the interpretation and enforcement
of PRC laws, rules and regulations" on page 23.

 The Holding
Foreign Companies Accountable Act

 In
December 2021, the SEC adopted rules (the "Final Rules") to implement the Holding Foreign Companies Accountable Act (the
"HFCAA"). The HFCAA includes requirements for the SEC to identify issuers who file annual reports with audit reports issued
by independent registered public accounting firms located in foreign jurisdictions that the Public Company Accounting Oversight Board
("PCAOB") is unable to inspect or investigate completely because of a position taken by a non-U.S. authority in the accounting
firm's jurisdiction ("Commission-Identified Issuers"). The HFCAA also requires that, to the extent that the PCAOB has
been unable to inspect an issuer's independent registered public accounting firm for three consecutive years since 2021, the SEC
shall prohibit the issuer's securities registered in the United States from being traded on any national securities exchange or
over-the-counter markets in the United States. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable
Act, and on December 29, 2022, legislation entitled "Consolidated Appropriations Act, 2023" (the "Consolidated Appropriations
Act") was signed into law, which contained, among other things, an identical provision to the Accelerating Holding Foreign Companies
Accountable Act and amended the HFCAA by requiring the SEC to prohibit an issuer's securities from trading on any U.S. stock exchanges
if its auditor is not subject to PCAOB inspections for two consecutive years instead of three.

 On
December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate
completely registered public accounting firms headquartered in mainland China and Hong Kong, including our former auditor, Centurion
ZD CPA & Co. In May 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of
our annual report on Form 10-K for the fiscal year ended December 31, 2021. On December 15, 2022, the PCAOB issued a report that vacated
its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect
or investigate completely registered public accounting firms. For this reason, we have not been identified as a Commission-Identified
Issuer after we filed on April 14, 2023 the annual report on Form 10-K for the fiscal year ended December 31, 2022 and do not expect
to be identified as a Commission-Identified Issuer under the HFCAA after we file this annual report on Form 10-K. Each year, the PCAOB
will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions.
If PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland
China and Hong Kong and we continue to use an accounting firm headquartered in one of these jurisdictions to issue an audit report on
our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual
report on Form 10-K for the relevant fiscal year. Our current auditor, ARK Pro CPA & CO, is headquartered in Hong Kong. There can
be no assurance that we would not be identified as a Commission-Identified Issuer for any future fiscal year, and if we were so identified
for two consecutive years, we would become subject to the prohibition on trading under the HFCAA, as amended.

 For
additional information, see " Risk Factor—Risks Related to Doing Business in China—The PCAOB had historically been
unable to inspect our former auditor in relation to their audit work performed for our financial statements and the inability of the
PCAOB to conduct inspections of our former auditor in the past has deprived our investors of the benefits of such inspections. Our common
stock may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate
completely auditors located in China. The delisting of our common stock, or the threat of its being delisted, may materially and adversely
affect the value of your investment " on page 18.

 iv

 Permissions
Required from the PRC Authorities for Our Business Operations and Securities Offering

 In
addition to regular business licenses, we are required to obtain the pollutants discharge permit to operate our business in the PRC.
We believe that our PRC operating subsidiaries have obtained all requisite permissions for our operations in all material aspects from
relevant Chinese authorities and none of the requisite permissions for our operations in all material aspects have been denied by the
Chinese authorities. However, we cannot assure you that our PRC subsidiaries are always able to successfully update or renew the licenses
or permits required for the relevant business in a timely manner or that these licenses or permits are sufficient to conduct all of our
present or future business. If our PRC subsidiaries (i) do not receive or maintain required permissions or approvals, (ii) inadvertently
conclude that such permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and our
PRC subsidiaries are required to obtain such permissions or approvals in the future, we could be subject to fines, legal sanctions or
an order to suspend our PRC operating subsidiaries' business, which may materially and adversely affect the business, financial
condition and results of operations of us.

 In
connection with our previous issuance of securities, under current PRC laws, regulations and regulatory rules, as of the date of this
annual report, we believe that we and our PRC subsidiaries, (i) are not required to obtain permissions from the China Securities Regulatory
Commission ("CSRC"), (ii) are not required to go through cybersecurity review by the Cyberspace Administration of China (the
"CAC"), and (iii) have not received or were denied such requisite permissions by any PRC authority. We cannot guarantee that
the regulators will agree with us. As of the date hereof, we have not been involved in any investigations for cybersecurity review made
by the CAC, and we have not received any inquiry, notice, warning, or sanctions in such respect.

 However,
the PRC government has recently indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or
foreign investment in China-based issuers. The CSRC published the Trial Measures and Listing Guidelines on February 17, 2023, designed
to regulate overseas securities offerings by PRC domestic companies. On February 24, 2023, the CSRC, together with the Ministry of Finance,
National Administration of State Secrets Protection and National Archives Administration of China, revised the Provisions on Strengthening
Confidentiality and Archives Administration for Overseas Securities Offering and Listing, which were issued by the CSRC and National
Administration of State Secrets Protection and National Archives Administration of China in 2009, or the "Provisions." The
revised Provisions were issued under the title the "Provisions on Strengthening Confidentiality and Archives Administration of
Overseas Securities Offering and Listing by Domestic Companies," and came into effect on March 31, 2023 together with the Trial
Measures.

 Given
the recent nature of the introduction of the above Trial Measures, Listing Guidelines, and Revised Provisions, there remains significant
uncertainty as to the enactment, interpretation and implementation of regulatory requirements related to overseas securities offerings
and other capital markets activities. Notwithstanding the foregoing, as of the date of this report, we are not aware of any PRC laws
or regulations in effect requiring that we obtain permission from any PRC authorities to issue securities to foreign investors, and we
have not received any inquiry, notice, warning, or sanction from the CSRC, the CAC, or any other PRC authorities that have jurisdiction
over our operations.

 For
additional information, see "Risk Factor—Risks Related to Doing Business in China—The PRC government has increasingly
strengthened oversight in offerings conducted overseas or on foreign investment in China-based issuers, which could result in a material
change in our operations and our common stock could decline in value or become worthless." on page 19.

 v

 Cash and
Asset Flows Through Our Organization

 Under
relevant PRC laws and regulations, we are permitted to provide funding from the proceeds of our overseas fund raising activities to our
PRC subsidiaries only through loans or capital contributions. In the fiscal years ended December 31, 2023 and 2024, we transferred $0.2
million and $2.4 million to our PRC subsidiaries as capital contribution, respectively. As of December 31, 2024, CBAK Energy Technology,
Inc., the Nevada issuer, had made cumulative capital contributions of $141.04 million to our existing PRC subsidiaries, which were accounted
as long-term investments by us.

 Before
Hitrans was acquired by us in November 2021, it declared dividends twice. In January 2020, Hitrans declared dividends for the years ended
December 31, 2018 and 2019. A dividend of $2,958,048 was declared and paid to its shareholder Zhejiang Meidu Graphene Technology Co.,
Ltd. For other shareholders, a total dividend of $2,480,944 was declared in January 2020 but remains unpaid as of the date of this report.
In March 2018, Hitrans declared a dividend of $1,333,135 for the year ended December 31, 2017, among which $533,254 was paid in July
2018 and the remaining $799,881 was paid in 2019. Except for the above dividends, we and our PRC subsidiaries have not previously declared
or paid any cash dividend or dividend in kind, and have no plan to declare or pay any dividends in the near future. We currently intend
to retain most, if not all, of our available funds and any future earnings to operate and expand our business.

 Under
PRC laws and regulations, we are subject to various restrictions on intercompany fund transfers and foreign exchange control. To the
extent our cash is in the PRC or held by a PRC entity, the funds may not be available for the distribution of dividends to our investors,
or for other use outside of the PRC, due to the restrictions and limitations on our ability imposed by the PRC government to transfer
cash. The PRC government imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance
of currency out of mainland China. Our PRC subsidiaries receive substantially all revenue in RMB. Our PRC subsidiaries may pay dividends
only out of their accumulated after-tax profits, if any, upon satisfaction of relevant statutory conditions and procedures and determined
in accordance with Chinese accounting standards and regulations. If the PRC foreign exchange control system prevents us from obtaining
sufficient foreign currencies to satisfy the foreign currency demands, we may not be able to pay dividends in foreign currencies to our
shareholders. Additionally, we may make loans to our PRC subsidiaries subject to the approval from or registration with PRC governmental
authorities and limitation on amount, or we may make additional capital contributions to our PRC subsidiaries. PRC regulation of loans
to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent
us from using our funds to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely
affect the liquidity of our PRC subsidiaries and our ability to fund and expand our business in the PRC, and cause the value of our securities
to significantly decline or become worthless. We cannot assure you that the PRC government will not intervene in or impose restrictions
on our ability to make intercompany cash transfers.

 For
additional information, see "Risk Factors—Risks Related to Doing Business in China—The PRC government exerts substantial
influence over the manner in which we conduct our business activities. Its oversight and discretion over our business could result in
a material adverse change in our operations and the value of our common stock. Changes in laws, regulations and policies in China and
uncertainties with respect to the PRC legal system could materially and adversely affect us. In addition, rules and regulations in China
can change quickly" On page 19 and "Risk Factors—Risks Related to Doing Business in China—PRC regulation of loans
to, and direct investment in, PRC entities by offshore holding companies and governmental control of currency conversion may restrict
or prevent CBAK Energy Technology, Inc. from making additional capital contributions or loans to its PRC subsidiaries" on page
25.

 Summary
of Risk Factors

 Investing
in our securities involves a high degree of risk. The following is a summary of significant risk factors and uncertainties that may affect
our business, which are discussed in more detail below under " Item 1A. Risk Factors " included in this annual report
on Form 10-K:

 The PRC government exerts
 substantial influence over the manner in which we conduct our business activities. Its oversight and discretion over our business
 could result in a material adverse change in our operations and the value of our common stock. Changes in laws, regulations and policies
 in China and uncertainties with respect to the PRC legal system could materially and adversely affect us. In addition, rules and
 regulations in China can change quickly with little advance notice.

 vi

 The PRC government has
 increasingly strengthened oversight in offerings conducted overseas or on foreign investment in China-based issuers, which could
 result in a material change in our operations and our common stock could decline in value or become worthless.

 Changes in U.S. and Chinese
 regulations or in relations between the United States and China may adversely impact our business, our operating results, our ability
 to raise capital and the value of our securities. Any such changes may take place quickly and with very little notice.

 There are uncertainties
 regarding the interpretation and enforcement of PRC laws, rules and regulations.

 CBAK Energy Technology,
 Inc., as a holding company incorporated in Nevada, the United States, without material operations of its own, relies on dividends
 and other distributions on equity paid by its PRC operating subsidiaries for its cash needs.

 Investors may experience
 difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in China based upon
 U.S. laws, including the federal securities laws or other foreign laws against us or our management.

 Our independent auditors
 have expressed substantial doubt about our ability to continue as a going concern.

 There are inherent risks
 associated with new product development and our efforts to develop and market new products could fail.

 Our failure, if any, to
 keep up with rapid technological changes and evolving industry standards may cause our products to become obsolete and less marketable,
 resulting in loss of market share to our competitors.

 Maintaining our R&D
 activities and manufacturing operations require significant capital expenditures, and our inability or failure to maintain our operations
 could have a material adverse impact on our market share and ability to generate revenue.

 We face intense competition
 from other battery manufacturers and cathode material and precursor producers, many of which have significantly greater resources.

 We are dependent on a limited
 number of customers for a significant portion of our revenues and this dependence is likely to continue.

 vii

 Our business depends on
 the growth in demand for light electric vehicles, electric vehicles, energy storage, such as residential energy supply and UPS
 application, and other high-power electric devices.

 Our success, in part, depends
 on the success of manufacturers of the end applications that use our products, and our failure to gain acceptance of our products
 from such manufacturers could materially and adversely affect our results of operations and profitability.

 We do not have product
 liability insurance for claims against our product quality. Defects in our products could result in a loss of customers and decrease
 in revenue, unexpected expenses and a loss of market share.

 We do not have long-term
 purchase commitments from our customers, which may result in significant uncertainties and volatility with respect to our revenue
 from period to period.

 We rely significantly on
 technology and systems to support our production, supply chain, payments, financial reporting and other key aspects of our business.
 Any failure, inadequacy, interruption or security failure of those systems could have a material adverse effect on our business,
 reputation and brand, financial condition, and results of operations.

 We and our independent
 public accounting firm identified material weaknesses in our internal control over financial reporting as of December 31, 2024. If
 we fail to remediate the material weaknesses, we may be unable to accurately report our financial results or prevent fraud, and investor
 confidence and the market price of our shares may be adversely affected.

 Numerous factors, many
 of which are beyond our control, may cause the market price of common stock to fluctuate significantly.

 Techniques employed by
 short sellers may drive down the market price of the common stock of CBAK Energy Technology, Inc.

 Other risks identified
 in this report and in our other reports filed with the SEC, including those identified in " Item 1A. Risk Factors "
 below.

 Enforceability
of Civil Liabilities

 There is
uncertainty as to whether the courts of China would:

 recognize or enforce judgments
 of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities
 laws of the United States or any state in the United States; or

 entertain original actions
 brought in each respective jurisdiction against us or our directors or officers predicated upon the securities laws of the United
 States or any state in the United States.

 The
recognition and enforcement of foreign judgments are provided for under PRC Civil Procedures Law. PRC courts may recognize and enforce
foreign judgments in accordance with the requirements of PRC Civil Procedures Law based either on treaties between China and the country
where the judgment is made or on reciprocity between jurisdictions. China does not have any treaties or other form of reciprocity with
the United States that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the PRC
Civil Procedures Law, courts in the PRC will not enforce a foreign judgment against us or our directors and officers if they decide that
the judgment violates the basic principles of PRC law or national sovereignty, security or public interest. As a result, it is uncertain
whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States. Under the PRC Civil Procedures
Law, foreign shareholders may originate actions based on PRC law against us in the PRC, if they can establish sufficient nexus to the
PRC for a PRC court to have jurisdiction, and meet other procedural requirements, including, among others, the plaintiff must have a
direct interest in the case, and there must be a concrete claim, a factual basis and a cause for the suit. However, it would be difficult
for foreign shareholders to establish sufficient nexus to the PRC by virtue only of holding our shares of common stock.

 viii

 PART
I

 ITEM
1. BUSINESS.

 Overview
of Our Business

 We
are a manufacturer of new energy high power lithium and sodium batteries that are mainly used in light electric vehicles, electric vehicles,
energy storage such as residential energy supply & uninterruptible power supply (UPS) application, and other high-power applications.
Our primary product offerings consist of new energy high power lithium and sodium batteries. In addition, after completing the acquisition
of 81.56% of registered equity interests (such ownership percentage reduced to 67.33% of registered equity interests (representing 72.99%
of paid-up capital as of December 31, 2024)) of Hitrans in November 2021, we entered the business of developing and manufacturing NCM
precursor and cathode materials. Hitrans is a leading developer and manufacturer of ternary precursor and cathode materials in China,
whose products have a wide range of applications on batteries that would be applied to electric vehicles, electric tools, high-end digital
products and storage, among others.

 As
of December 31, 2024, we report financial and operational information in two segments: (i) production of high-power lithium and sodium
battery cells, and (ii) manufacture and sale of materials used in high-power lithium battery cells.

 We
generated revenues of $176.6 million and $204.4 million for the fiscal years ended December 31, 2024 and 2023, respectively. We had a
net income of $9.6 million in the fiscal year ended December 31, 2024 compared to a net loss of $8.5 million in the fiscal year ended
2023. As of December 31, 2024, we had an accumulated deficit of $122.6 million and net assets of $120.1 million.

 Expansion
of Manufacturing Capabilities

 We
have three major manufacturing centers for new energy batteries, including lithium and sodium batteries in Nanjing, Dalian and Shangqiu,
and a manufacturing plant for precursors and cathode materials in Shaoxing.

 In
June 2020, our wholly-owned subsidiary, BAK Asia entered into a framework investment agreement with Jiangsu Gaochun Economic Development
Zone Development Group Company ("Gaochun EDZ"), a company affiliated with the local government of Gaochun Economic Development
Zone in Nanjing, Jiangsu, PRC. According to the agreement, we intended to develop certain lithium battery projects within Gaochun EDZ
which are expected to have a total production capacity of approximately 20 GWh per year after completion (the "Nanjing Project").
As of December 31, 2024, we had received government subsidies in an amount of RMB47.9 million (approximately $6.6 million) from Gaochun
EDZ. We plan to utilize the targeted total capacity of approximately 20 GWh per year to produce lithium batteries or sodium batteries
for the light electric vehicle (LEV), electric vehicle (EV), and energy storage sectors. The Company expects to achieve such capacity
expansion under the Nanjing Project through two phases of construction. In Phase I, we secured plant rentals and completed interior construction
by 2021, featuring two production lines. One line is dedicated to manufacturing model 32140 lithium batteries, while the other is versatile,
capable of producing either model 32140 lithium or sodium batteries. The completed Phase I plants span roughly 27,173 square meters,
and as of December 31, 2024, the two production lines constructed during Phase I had been put into operation. Our actual production capacity
for Phase I stands at 1.3 GWh annually when both lines are assigned to lithium battery production. Phase II, scheduled for completion
by the end of 2027, aims to add another three large manufacturing plants and augment our annual production capacity by an additional
18 GWh. We plan to add the first two production lines to the first large manufacturing plant at Phase II. As of December 31, 2024, we
had successfully signed procurement agreements with all suppliers and completed the prepayment for all necessary production equipment
and utilities required for the first two production lines at Phase II, that are scheduled to enter trial production by May 2025, with
full-scale mass production expected to begin by late 2025. Together, these two production lines will have an annual production capacity
of approximately 3GWh. The expansion of the Nanjing project is fueled by strong client demand and a surge in orders. Our existing two
production lines at Phase I are already operating at full capacity, necessitating the addition of new capacity to meet the growing demand
for our Model 32140 cells.

 Our
sales have continued to grow in recent years. Our model 26650 batteries produced in our Dalian manufacturing center have gained popularity
in European and American markets. As a result, our Dalian facilities had experienced client demand that exceeded the available supply
at the time. As of December 31, 2024, we had three production lines in Dalian, with a total capacity of 1 GWh per year. Furthermore,
we are proactively enhancing the product portfolio at our Dalian manufacturing center, as the existing Model 26650—developed in
2006—has become relatively outdated. To advance this initiative, we are setting up a new production line for Model 40135, designed
with a capacity of 2.3 GWh. Procurement agreements with equipment suppliers have been finalized, and the equipment is expected to begin
operations by the end of May 2025. We anticipate commencing mass production by the end of 2025.

 Our
Hitrans facilities currently have a manufacturing capacity of 13,000 tons for NCM precursors and 3,000 tons for NCM cathode materials.
Hitrans is actively engaged in constructing a new manufacturing plant, slated for completion in June 2026 and expected to be operational
in the first half of 2027. Upon completion, this new facility will increase Hitrans' NCM precursor production capacity by an additional
37,000 tons.

 Development
of New Battery Models

 Currently,
our primary battery product offering consists of Model 26650, 26700 and 32140 lithium cells, and 32140 sodium cells. Model 26650, 26700
and 32140 batteries can be used in light electric vehicles, electric vehicles,, energy storage (such as residential energy supply &
uninterruptible power supply (UPS) application), and other high-power applications. Our sodium cells can be used in ultra-low temperature
conditions and have fast-charging capability. Actual testing data shows that our model 32140 sodium cells retain 85% capacity under -40
and could be charged to 90% capacity within 10 minutes.

 To
maintain our competitive position, we are expanding the range of our cylindrical battery models to include larger products, such as model
40135 and 46950. Larger cylindrical batteries typically offer superior performance at lower manufacturing costs. As of December 31, 2024,
we are in the process of installing a new production line at our Dalian facilities for Model 40135, with mass production anticipated
to begin in the second half of 2025. Meanwhile, the development of Model 46950 is underway, and we expect it to reach the sample stage
by the end of 2025. Based on different client demand, we may produce sodium versions of these models.

 Acquisition
of a Raw Materials Manufacturer

 On
July 20, 2021, CBAK Power, a wholly-owned Chinese subsidiary of the Company, entered into a framework agreement relating to CBAK Power's
investment in Zhejiang Hitrans Lithium Battery Technology Co., Ltd, pursuant to which CBAK Power agreed to acquire 81.56% of registered
equity interests (representing 75.57% of paid-up capital) of Hitrans (the "Acquisition"). The Acquisition was completed on
November 26, 2021.

 CBAK
Power paid approximately RMB40.74 million ($6.4 million) in cash to acquire 21.56% of registered equity interests (representing 21.18%
of paid-up capital) of Hitrans from Hitrans management shareholders. In addition, CBAK Power entered into a loan agreement with Hitrans
to lend Hitrans approximately RMB131 million ($20.6 million) (the "Hitrans Loan") by remitting approximately RMB131 million
($20.6 million) into the account of Shaoxing Intermediate People's Court to remove the freeze on Zhejiang Meidu Graphene Technology
Co., Ltd. ("Meidu Graphene")'s 60% of registered equity interests (representing 54.39% of paid-up capital) of Hitrans
which freeze was imposed as a result of a lawsuit for Hitrans's failure to make payments in connection with the purchase of land
use rights, plants, equipment, pollution discharge permit and other assets (the "Assets"). CBAK Power assigned RMB118 million
($18.5 million) of the Hitrans Loan to Mr. Junnan Ye as consideration for the acquisition of 60% of registered equity interests (representing
54.39% of paid-up capital) of Hitrans from Mr. Ye who, acting as an intermediary, first purchased the 60% of registered equity interests
(representing 75.57% of paid-up capital) of Hitrans from Meidu Graphene. After such assignment, Hitrans shall repay Mr. Ye at least RMB70
million ($10.84 million) within two months of obtaining title to the Assets and the rest RMB48 million ($7.43 million) by December 31,
2021, along with a fixed interest of RMB3.5 million ($0.54 million) which can be reduced by up to RMB1 million ($0.15 million) if the
loan is repaid before its due date. Hitrans shall repay the remaining approximately RMB13 million ($2.01 million) of the Hitrans Loan
to CBAK Power at an interest rate of 6% per annum. As of January 29, 2022, Hitrans repaid all the loan principal of RMB118 million ($18.5
million) and interest of RMB3.5 million ($0.54 million) to Mr. Ye.

 Prior
to the Acquisition, CBAK Power and Hangzhou Juzhong Daxin Asset Management Co., Ltd. ("Juzhong Daxin") entered into a framework
investment agreement (the "Letter of Intent") for a potential acquisition of Hitrans, and CBAK Power paid RMB20 million ($3.10
million) to Juzhong Daxin as a security deposit under the Letter of Intent. On July 27, 2021, Juzhong Daxin returned RMB7 million ($1.1
million) of the security deposit to CBAK Power. Juzhong Daxin has refused to refund an additional RMB3 million ($0.5 million), claiming
that the amount was a justified risk premium for their facilitation of the acquisition. CBAK Power believes this assertion is baseless
and has initiated legal proceedings against Juzhong Daxin to recover the outstanding RMB3 million. As of December 31, 2024, CBAK Power
had not recovered the RMB3 million from Juzhong Daxin.

 As
part of the Acquisition, Hitrans obtained title to the Assets. Upon the closing of the Acquisition, CBAK Power became the largest shareholder
of Hitrans holding 81.56% of its registered equity interests (representing 75.57% of paid-up capital). As required by applicable Chinese
laws, CBAK Power is obliged to make capital contributions for the portion of Hitrans's registered capital subscribed but unpaid
in accordance with the articles of association of Hitrans.

 On
July 8, 2022, Hitrans held a shareholder meeting to pass a resolution to increase the registered capital of Hitrans from RMB40 million
to RMB44 million (approximately $6.2 million) and to accept an investment of RMB22 million (approximately $3.1 million) from Shaoxing
Haiji Enterprise Management & Consulting Partnership ("Shaoxing Haiji") and another investment of RMB18 million (approximately
$2.5 million) from Mr. Haijun Wu (collectively, the "Management Shareholder Investments"). Under the resolution, 10% of the
Management Shareholder Investments (RMB4 million or $0.5 million) will be counted towards Hitrans's registered capital and the
remaining 90% (RMB36 million or $5.1 million) will be treated as additional paid-in capital. 25% of the Management Shareholder Investments
was required to be in place before August 15, 2022. As of September 30, 2022, RMB10 million (approximately $1.4 million), representing
25% of the Management Shareholder Investments was received. Another 25% (RMB10 million) and 50% (RMB20 million) of the Management Shareholder
Investments were required to be received before December 31, 2022 and June 30, 2024, respectively. As of December 31, 2024, the 25% (RMB10
million) of the Management Shareholder Investments were received. Shaoxing Haiji and Mr. Haijun Wu are currently in negotiations with
other shareholders of Hitrans to extend the payment due date for the remaining unpaid 25% and 50% of the Management Shareholder Investments
to May 31, 2029. In addition, in 2022, CBAK Power injected an additional RMB60 million (approximately $8.7 million) in Hitrans comprising
RMB6 million ($0.9 million) towards Hitrans's registered capital and RMB54 million ($7.8 million) as additional paid-in capital.

 On
December 8, 2022, CBAK Power entered into agreements with five investors (together, the "Hitrans Investors") to transfer
an aggregate of 6.8183% equity interests CBAK Power holds in Hitrans to these Hitrans Investors. Among the five investors, four of them
invested RMB5 million (approximately $0.7 million) each to obtain 1.1364% equity interests, respectively, while the fifth investor paid
RMB10 million (approximately $1.5 million) to acquire 2.2727% equity interests. Following the above financing and transfer transactions,
CBAK Power's equity interests in Hitrans decreased to 67.33%, representing 72.99% of paid-up capital as of December 31, 2024.

 Trends
in End Applications of Our Products

 Our
business, financial condition and results of operations depend on whether end-application manufacturers are willing to use our products.
We target the battery markets for light electric vehicles, electric vehicles, energy storage (such as residential energy supply &
UPS application), and other high-power electric devices. However, our revenues derived from a specific end-application have been fluctuating
depending on various factors such as governmental policies, technological changes, evolving industry standards and customer needs and
preferences. After the acquisition of Hitrans, we have broadened our target markets to include battery manufacturers, offering them cathode
materials and precursors.

 In
recent years, the majority of our revenue has been driven by sales of residential energy supply and UPS applications. Our cylindrical
lithium batteries, engineered with a strong focus on safety and a compact design, are ideally suited for energy storage solutions where
space is limited and safety is paramount—such as portable power supply units and home energy storage systems. Consequently, our
top customers in recent years have predominantly come from these sectors, and we expect this trend to continue given the growing demand
for our batteries.

 In
addition, our cylindrical lithium batteries are increasingly gaining traction in the light electric vehicle (LEV) market, particularly
for two- and three-wheeler applications, as they can be efficiently integrated into battery packs for smaller vehicles.

 Our Corporate
History and Structure

 CBAK
Energy Technology, Inc. was incorporated in the State of Nevada on October 4, 1999. The shares of common stock of CBAK Energy Technology,
Inc. traded in the over-the-counter market through the Over-the-Counter Bulletin Board between 2005 and May 31, 2006. On May 31, 2006,
CBAK Energy Technology, Inc. obtained approval to list its common stock on the Nasdaq Global Market, and trading commenced on the same
date under the symbol "CBAK." Effective November 30, 2018, the trading symbol for the common stock of CBAK Energy Technology,
Inc. changed from CBAK to "CBAT." Effective June 21, 2019, CBAK Energy Technology, Inc.'s common stock started trading
on the Nasdaq Capital Market ("Nasdaq").

 We
currently conduct our business primarily through (i) CBAK Power; (ii) Nanjing CBAK (as defined below); (iii) CBAK Shangqiu (as defined
below); (iv) Nanjing BFD; and (v) Hitrans. All of CBAK Energy Technology, Inc.'s subsidiaries are listed below:

 CBAK
 Energy Investments Holdings ("CBAK Energy Investments"), our wholly owned subsidiary,
 was incorporated on February 26, 2024 under the laws of the Cayman Islands. CBAK Energy Investments
 does not have any significant operations as of the date of this report.

 CBAK Energy Lithium Battery
 Holdings Co., Ltd. ("CBAK Energy Lithium Holdings"), our wholly owned subsidiary, incorporated on July 12, 2023 under
 the laws of the Cayman Islands in the name of "Hitrans Holdings," was renamed as "CBAK Energy Lithium Battery Holdings
 Co., Ltd" on February 29, 2024.

 BAK Asia
and its subsidiaries

 BAK
 Asia, or China BAK Asia Holdings Limited, an investment holding company formed under the
 laws of Hong Kong on July 9, 2013.

 CBAK
 Power, or Dalian CBAK Power Battery Co., Ltd., wholly-owned by BAK Asia, located in Dalian,
 China, incorporated on December 27, 2013, focuses on the development and manufacture of high-power
 lithium batteries.

 CBAK Shanqiu or CBAK New
 Energy (Shangqiu) Co., Ltd., wholly-owned by CBAK Power, located in Shangqiu, China, incorporated on July 25, 2023, focuses on the
 development and manufacture of high-power lithium batteries.

 Dalian
 CBAK Energy Technology Co., Ltd. ("CBAK Energy"), wholly-owned by BAK Asia, located
 in Dalian, China, incorporated on November 21, 2019. CBAK Energy does not have any significant
 operations as of the date of this report.

 Hitrans
Holdings and its subsidiaries

 Hitrans
 Holdings Co., Ltd. ("Hitrans Holdings"), our wholly owned subsidiary, incorporated
 on July 28, 2021 under the laws of the Cayman Islands, previously named "CBAK Energy
 Technology, Inc.", was renamed as "Hitrans Holdings Co., Ltd." on February
 29, 2024. Hitrans Holdings owns 100% equity interests of Hong Kong Hitrans.

 Hong
 Kong Hitrans Holdings Company Limited ("Hong Kong Hitrans"), a direct, wholly
 owned subsidiary of Hitrans Holdings, was incorporated on July 7, 2023 under the laws of
 Hong Kong, previously named "Hong Kong Nacell Holdings Company Limited", was
 renamed as "Hong Kong Hitrans Holdings Company Limited" on March 28, 2024. Hong
 Kong Hitrans had no significant operations as of the date of this report.

 Dalian
 CBAK New Energy Co., Ltd. ("CBAK New Energy"), wholly-owned by BAK Investments,
 located in Dalian, China, incorporated on August 14, 2013, previously named Dalian CBAK Trading
 Co., Ltd. until December 12, 2023, was transferred from BAK Asia to BAK Investments on December
 26, 2023. On March 5, 2024, CBAK New Energy was transferred from BAK Investments to Hong
 Kong Hitrans. CBAK New Energy does not have any significant operations as of the date of
 this report.

 Hitrans, or Zhejiang Hitrans
 Lithium Battery Technology Co., Ltd, 67.33% owned by CBAK Power, located in Shangyu, Shaoxing, China, incorporated on December 16,
 2015, principally engaged in the business of research and development, production and sales of cathode materials and precursors for
 NCM lithium batteries.

 Shaoxing
 Haisheng International Trading Co., Ltd. ("Haisheng"), wholly-owned by Hitrans,
 located in Shangyu, Shaoxing, China, incorporated on October 9, 2021, principally engaged
 in the business of cathode raw materials trading.

 Anhui
 Yuanchuang New Energy Materials Co., Ltd., a wholly-owned subsidiary of Hitrans, located
 in Fuyang, Anhui, China, incorporated on January 9, 2025, focuses on the production of cathode
 materials for NCM lithium batteries.

 BAK
Investments and its subsidiaries:

 BAK
 Investments or BAK Asia Investments Limited, an investment holding company formed under the
 laws of Hong Kong;

 CBAK
 New Energy (Nanjing) Co., Ltd ("CBAK Nanjing"), wholly-owned by BAK Investments
 located in Nanjing, China, incorporated on July 31, 2020. CBAK Nanjing does not have any
 significant operations as of the date of this report.

 Nanjing
 CBAK or Nanjing CBAK New Energy Technology Co., Ltd., wholly owned by CBAK Nanjing, located
 in Nanjing, China, incorporated on August 6, 2020, focuses on the development and manufacture
 of larger-sized cylindrical lithium batteries.

 Nanjing
 BFD or Nanjing BFD New Energy Technology Co., Ltd, wholly-owned by CBAK Nanjing, incorporated on November 9, 2020, formally known
 as Nanjing Daxin, renamed on March 8, 2023, focuses on the development and manufacture of sodium-ion batteries. Nanjing BFD's
 original business of the development and manufacture of electric bicycle, motorcycle and automotive spare parts will be gradually
 marginalized.

 Shenzhen CBAK Sodium Battery
 New Energy Co., Ltd ("CBAK Shenzhen"), a wholly-owned subsidiary of BAK Investments, located in Shenzhen, China, incorporated
 on October 29, 2024, plan to focuses on the research and development of sodium batteries.

 CBAK
 New Energy (Suzhou) Co., Ltd ("CBAK Suzhou"), 90% owned by Nanjing BFD, located
 in Suzhou, China, incorporated on May 4, 2018, used to focus on the development and manufacture
 of new energy high power battery packs. CBAK Suzhou currently does not employee any local
 staff. Since its lease expired in October 2019, CBAK Suzhou has stopped using the facilities
 located at its registered address. Some of its business has been transferred to our subsidiaries
 in Dalian and CBAK Suzhou's remaining assets are temporarily stored in our facilities
 in Dalian. We plan to dissolve CBAK Suzhou as soon as practicable.

 Subsidiaries
dissolved in the past two fiscal years

 Guangdong Meidu Hitrans
 Resources Recycling Technology Co., Ltd. ("Guangdong Hitrans"), 80% owned by Hitrans, located in Dongguan, Guangdong,
 China, incorporated on July 6, 2018, principally engaged in the business of wastes recycling. Guangdong Hitrans was dissolved on
 January 30, 2024.

 Daxin New Energy Automobile
 Technology (Jiangsu) Co., Ltd. ("Jiangsu Daxin"), wholly-owned by Nanjing BFD, incorporated on August 4, 2021, focuses
 on the development and manufacture of electric bicycle, motorcycle and automotive spare parts. Jiangsu Daxin was dissolved on December
 22, 2023.

 Almost all
of our business operations are conducted primarily through our Chinese subsidiaries. The chart below presents our current corporate structure:

 Our Products

 Our
cylindrical lithium batteries are manufactured using lithium iron phosphate (LFP) materials. While LFP cells offer a lower energy density
compared to batteries utilizing nickel-cobalt-manganese (NCM) materials, they provide significant advantages in terms of longer cycle
life and enhanced safety. Additionally, we offer cylindrical sodium batteries using LiMO materials, specifically designed to meet
the demands of ultra-low temperatures and fast-charging applications.

 We currently
are manufacturing the following batteries, which can be used for various applications:

 Battery
 Cell Type

 End
 applications*

 Cylindrical Lithium
 Battery (LFP)

 Light electric vehicle

 Cylindrical Sodium Battery

 Electric car

 Energy Storage including
 Residential Energy Supply and UPS

 On
November 29, 2021, we announced the completion of the acquisition of 81.56% equity interests (such ownership percentage reduced to 67.33%
of registered equity interests (representing 72.99% of paid-up capital as of December 31, 2024)) of Hitrans. We since then have
incorporated the manufacture and sale of the following materials used in high power lithium batteries as part of our operations:

 Material
 Type

 End
 applications*

 Cathode

 High-power NCM lithium
 battery

 Precursor

 NCM cathode materials

 Precursors
are in general made from nickel salts, cobalt salts and manganese salts, and are used in manufacturing cathode materials. Cathode materials
are crucial raw materials to manufacture lithium-ion batteries.

 Sales
and Marketing

 Currently,
our marketing and promotional efforts for our battery segment are primarily undertaken by our marketing department in both Dalian and
Nanjing. We plan to build an extensive sales and service network in China, as we expand our presence into the regions where China's
main lithium battery productions are located, such as Tianjin City, Shandong Province, Guangdong Province and Jiangsu Province.

 Hitrans,
our raw materials production unit, concentrates its marketing efforts on the domestic Chinese market, with a particular focus on South
and East China, targeting players in the NCM lithium industry.

 We
also engage in marketing activities such as attending industry-specific conferences and exhibitions to promote our products and brand
name. We believe these activities are beneficial to promoting our products and brand name among key industry participants.

 Suppliers

 The
primary raw materials used in the manufacture of lithium-ion batteries include electrode materials, steel cases, caps, foils, electrolytes
and separators. The primary raw materials used in our materials business include graphite, iron phosphate and lithium phosphate. The
cost of these raw materials is a key factor in pricing our products. We source such raw materials from a number of suppliers across China.
We are seeking to identify alternative raw material suppliers to the extent there are viable alternatives and to expand our use of alternative
raw materials.

 We
aim to maintain multiple supply sources for each of our key raw materials to ensure that supply problems with any one supplier will not
materially disrupt our operations. In addition, we constantly strive to develop strategic relationships with new suppliers to secure
a stable supply of materials and introduce competition in our supply chain, thereby increasing our ability to negotiate better pricing
and reducing our exposure to possible price fluctuations.

 Intellectual
Property

 As
of December 31, 2024, CBAK Power held 149 patents in the PRC, which will expire between 2025 to 2042. Among the 149 patents, two were
acquired by BAK Asia, from an unrelated third party at RMB1 and were contributed as paid-in capital to CBAK Power. As of December 31,
2024, CBAK Energy held 8 patents in the PRC, all of which will expire between 2030 and 2040; Nanjing CBAK held 45 patents in the
PRC, all of which will expire between 2031 and 2044; Nanjing BFD held 39 patents in the PRC, all of which will expire between 2028
and 2045; and Hitrans held 26 patents in the PRC, all of which will expire between 2028 and 2044.

 We
have registered the following Internet and WAP domain name: www.cbak.com.cn.

 We
also have unpatented proprietary technologies for our product offerings and key stages of the manufacturing process. Our management and
key technical personnel have entered into agreements requiring them to keep confidential all information relating to our customers, methods,
business and trade secrets during their terms of employment with us and thereafter and to assign to us their inventions, technologies
and designs they develop during their term of employment with us.

 We
have institutionalized our efforts to safeguard our intellectual property rights by establishing an internal department that includes
professionals such as attorneys, engineers, information managers and archives managers responsible for handling matters relating to our
intellectual property rights. We have published internally a series of rules to protect our intellectual property rights.

 While
our intellectual property rights in the aggregate are important to our business operations, we do not believe that our business would
be materially affected by the expiration of any particular intellectual property right.

 Seasonality

 Seasonality
does not materially affect our business or operating results. As our battery cell and battery material products have a wide range of
applications, we have not experienced significant seasonal fluctuations in market demands or sales recently. Market demands for our products
generally slightly drop during the Chinese New Year holiday, a major national holiday in China.

 Customers

 Currently,
major customers for our high -power lithium batteries business include Viessmann Faulquemont S.A.S, Anker Innovations, Livguard Energy
Technologyies Private Limited., Hello Tech (Jackery), Shenzhen ACE Battery Co., Ltd. and PowerOAK. We believe that our revenue and market
share will increase as we gradually expand our high-power battery production to meet the growing demand for these batteries.

 Geography
of Sales

 Our
revenues are generated from both domestic and international customers, but the percentage contribution from each group varies significantly
from year to year. The following table sets forth certain information relating to our total revenues by location of our customers for
the last two fiscal years:

 Fiscal
 Years ended

 31, 2023

 % of Net

 % of Net

 (in thousands
 of U.S. dollars, except percentages)

 Mainland China

 $
 119,307,085

 $
 98,925,752

 Europe

 78,575,290

 65,746,989

 Others

 6,555,990

 11,941,868

 Total

 $

 $

 Competition

 We
face intense competition from high-power lithium battery makers and raw materials manufacturers in China. The following table sets forth
our major competitors in the battery market broken down by battery models as well as in the materials market, as of December 31, 2024:

 Type

 Competitors

 Model 26650/26700

 China:

 Shandong Goldencell; EVPS; Power Long Battery

 Model 32140

 China:

 Gotion Hi-tech; EVE Battery

 Cathode & Precursor

 China:

 Beijing Easpring; Ronbay Technology; Huayou Cobalt

 We
believe that we are able to leverage our cutting-edge battery manufacturing techniques and R&D capabilities to compete favorably
with our competitors. Compared to Chinese battery makers, we believe we have higher consistency and safety in product quality, which
enables us to compete favorably with local competitors.

and Development

 The
development of advanced electric vehicles and new-type energy storage in China has created a significant demand for the R&D of next-generation
advanced lithium, sodium and other type of batteries and their key materials, which must be characterized by high energy density, high
security, long-lasting life, and low cost. Furthermore, the training of technical talent in this field is equally important.

 We
have an advanced R&D center in Dalian for research and development of lithium batteries, receiving almost all the R&D achievements,
equipment and staff of BAK Tianjin. BAK Tianjin began its R&D manufacturing and distribution of high-power lithium battery and battery
modules in December 2006, for use in electric cars, electric bicycles, residential energy supply & UPS, and other applications. We
are setting up a larger R&D center as part of our Nanjing Project, and we anticipate that eventually our battery R&D department
will be headquartered in Nanjing.

 Our
R&D personnel developed model 32140 lithium cell in house which has become one of the best large cylindrical battery models in the
world. Furthermore, our R&D team successfully developed model 32140 sodium cell, making us one of only a few companies in the world
that are capable of mass producing sodium-ion batteries. Our sodium cells can be used in ultra-low temperature conditions and have fast-charging
capability. Actual testing data shows that our model 32140 sodium cells retain 85% capacity under -40 and could be charged to
90% capacity within 10 minutes.

 To
maintain our competitive position, we are expanding the range of our cylindrical battery models to include larger options, such as model
40135, a refined version of the previously planned 40140, and 46950. We have paused the development of Model 46120, as market research
indicates Model 46950 may present greater market potential. Larger cylindrical batteries typically offer superior performance at lower
manufacturing costs. As of December 31, 2024, we are in the process of installing a new production line at our Dalian facilities for
Model 40135, with mass production anticipated to begin in the second half of 2025. Meanwhile, the development of Model 46950 is underway,
and we expect it to reach the sample stage by the end of 2025.

 In
addition to our efforts to develop new batteries at lower cost and higher energy density, we are also focusing on the research and development
of high-nickel low-cobalt materials featuring high energy density, low cost and broader applications. We operate an advanced R&D
center in Shaoxing that is focused on battery materials. Additionally, we invested significant R&D resources to develop single-crystal
high-voltage products as well as high-rate materials which can enable a 15C discharge rate.

 Human
Capital

 We
had a total of approximately 1,463 employees as of December 31, 2024, all of whom are full-time employees. The following table sets forth
the number of our employees by function.

 Function

 Number

 Production

 Research and development

 Sales and marketing

 General and administrative

 Total

 1,463

 Our
employees are not represented by a labor organization or covered by a collective bargaining agreement. We have not experienced any work
stoppages.

 We believe
we maintain good relations with our employees.

 Available
Information

 We
make available free of charge, on or through our investor relations website,  our annual reports on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other filings pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934, and amendments to such filings, as soon as reasonably practicable after each is electronically filed with, or furnished
to, the SEC. The SEC maintains a website that contains our reports, proxy and information statements, and our other SEC filings. The
address of the SEC's website is www.sec.gov. Information appearing on our website is not part of any report that we file with the
SEC.

 Company
Law

 The
establishment, operation and management of corporate entities in mainland China are governed by the Company Law of the People's
Republic of China, or the China Company Law, which was adopted by the Standing Committee of the National People's Congress ("SCNPC")
in December 1993, implemented in July 1994, and subsequently amended in December 1999, August 2004, October 2005, December 2013 and October
2018. Under the China Company Law, companies are generally classified into two categories: limited liability companies and companies
limited by shares. The China Company Law also applies to foreign-invested limited liability companies and foreign-invested companies
limited by shares. Pursuant to the China Company Law, where laws on foreign investment have other stipulations, such stipulations shall
prevail. In December 2021, the SCNPC issued the draft amendment to the China Company Law for comment. The draft amended China Company
Law has made roughly 70 substantive changes to the 13 chapters and 218 articles of the current Company Law (rev. 2018). It would (i)
refine special provisions on state-funded companies; (ii) improve the company establishment and exit system; (iii) optimize corporate
structure and corporate governance; (iv) optimize the capital structure; (v) tighten the responsibilities of controlling shareholders
and management personnel; and (vi) strengthen corporate social responsibility.

Investment Law

 On
March 15, 2019, the National People's Congress approved the Foreign Investment Law of the PRC, or the "Foreign Investment
Law," which came into effect on January 1, 2020, repealing simultaneously the Law of the PRC on Sino-foreign Equity Joint Ventures,
the Law of the PRC on Wholly Foreign-owned Enterprises, and the Law of the PRC on Sino-foreign Cooperative Joint Ventures. The Foreign
Investment Law adopts the management system of pre-establishment national treatment and negative list for foreign investment. Regulations
for the Implementation of the Foreign Investment Law of the PRC came into effect on January 1, 2020. Policies in support of enterprises
shall apply equally to foreign-funded enterprises according to laws and regulations. Pursuant to Foreign Investment Law and the Negative
List, promulgated jointly by MOFCOM and NDRC on December 27, 2021, and became effective on January 1, 2022, foreign investors shall not
invest in sectors that forbid foreign investment as specified in the Negative List. In sectors under the Negative List where foreign
investment is restricted, foreign investors shall comply with the special administrative measures for restrictive access set in the Negative
List on equity ratio, senior management, etc., when making investments. Where a foreign investor or enterprise with foreign investment
invests in a field other than those in the Negative List, it shall register by the principle of consistency of domestic and foreign investment.
Fair competition for foreign investment enterprises to participate in government procurement activities shall be protected. The Foreign
Investment Law also stipulates the protection of intellectual property rights and trade secrets.

 Notice
on the Implementation of Foreign Investment Law and the Registration of Foreign-funded Enterprises was issued by the SAMR on December
31, 2019. According to such notice, the SAMR conducts business registration, and the applicant shall apply for the registration of foreign-funded
enterprises through the enterprise registration system. The registration authority shall conduct a formal examination on relevant application
materials.

 The
Measures for Reporting Foreign Investment Information were adopted by the MOFCOM on December 19, 2019, approved by the SAMR, and became
effective on January 1, 2020. According to such measures, when a foreign investor directly or indirectly conducts investment activities
in China, the foreign investor or foreign-invested enterprise shall submit investment information to the competent department of commerce
in accordance with the measures.

 None
of our PRC subsidiaries' business falls within the Negative List, and therefore, all of our PRC subsidiaries are able to conduct
their business without being subject to restrictions imposed by foreign investment laws and regulations in China.

Relating to Intellectual Property

 Copyright

 China
has adopted comprehensive legislation governing intellectual property rights, including trademarks and copyrights. China is a signatory
to the primary international conventions on intellectual property rights and has been a member of the Agreement on Trade Related Aspects
of Intellectual Property Rights since its accession to the WTO in December 2001.

 In
September 1990, the SCNPC promulgated the Copyright Law of the People's Republic of China, effective in June 1991 and amended in
2001, 2010 and 2020 respectively. The amended Copyright Law extends copyright protection to internet activities, products disseminated
over the internet and software products. In addition, there is a voluntary registration system administered by the Copyright Protection
Centre of China.

 In
order to further implement the Computer Software Protection Regulations, promulgated by the State Council in December 2001 and amended
in 2011 and 2013 respectively, the National Copyright Administration issued Computer Software Copyright Registration Procedures in February
2002, which specify detailed procedures and requirements with respect to the registration of software copyrights.

 Trademark

to the Trademark Law of the People's Republic of China, promulgated by the SCNPC in August 1982, and amended in 1993, 2001, 2013
and 2019 respectively, the Trademark Office of China National Intellectual Property Administration is responsible for the registration
and administration of trademarks and is also responsible for resolving trademark disputes in China. Registered trademarks are valid for
ten years from the date the registration is approved. A registrant may apply to renew a registration within twelve months before the
expiration date of the registration. If the registrant fails to apply in a timely manner, a grace period of six additional months may
be granted. If the registrant fails to apply before the grace period expires, the registered trademark shall be deregistered. Renewed
registrations are valid for ten years. In April 2014, the State Council issued the revised Implementation of the Trademark Law, which
specified the requirements of applying for trademark registration and review.

 Patent

to the Patent Law of the People's Republic of China promulgated by the SCNPC in 1984 and amended in 1992, 2000, 2008 and 2020,
respectively, a patentable invention or a utility model must meet three criteria: novelty, inventiveness and practicability. A patent
is valid for a twenty-year term for an invention and a ten-year term for a utility model or design, starting from the application date.

 Domain
Names

 In
May 2012, the China Internet Network Information Center issued the Implementing Rules for Domain Name Registration setting forth the
detailed rules for registration of domain names. In August 2017, China's Ministry of Industry and Information Technology promulgated
the Administrative Measures on Internet Domain Names, or the Domain Name Measures. The Domain Name Measures regulate the registration
of domain names, such as the top-level domain name ".cn".

Relating to Foreign Exchange

to the Foreign Exchange Administration Regulations, as amended in August 2008, the RMB is freely convertible for current account items,
including the distribution of dividends, interest payments, trade and service-related foreign exchange transactions, but not for capital
account items, such as direct investments, loans, repatriation of investments and investments in securities outside the PRC, unless SAFE's
prior approval is obtained and prior registration with SAFE is made. In May 2013 SAFE promulgated the Circular of the SAFE on Printing
and Distributing the Administrative Provision on Foreign Exchange in Domestic Direct Investment by Foreign Investors and Relevant Supporting
Documents which provides for and simplifies the operational steps and regulations on foreign exchange matters related to direct investment
by foreign investors, including foreign exchange registration, account opening and use, receipt and payment of funds, and settlement
and sales of foreign exchange.

to the Circular on Relevant Issues concerning Foreign Exchange Administration of Overseas Investment and Financing and Return Investments
Conducted by Domestic Residents through Overseas Special Purpose Vehicles or the SAFE Circular 37, promulgated by SAFE and which became
effective on July 4, 2014, (a) a PRC resident shall register with the local SAFE branch before he or she contributes assets or equity
interests in an overseas special purpose vehicle, or Overseas Special Purpose Vehicles (SPV), that is directly established or controlled
by the PRC Resident for the purpose of conducting investment or financing; and (b) following the initial registration, the PRC Resident
is also required to register with the local SAFE branch for any major change, in respect of the Overseas SPV, including, among other
things, a change of the Overseas SPV's PRC Resident shareholder(s), name of the Overseas SPV, term of operation, or any increase
or reduction of the Overseas SPV's registered capital, share transfer or swap, and merger or division. Pursuant to SAFE Circular
37, failure to comply with these registration procedures may result in penalties.

to the Circular of the State Administration of Foreign Exchange on Further Simplifying and Improving the Direct Investment-related Foreign
Exchange Administration Policies, or the SAFE Notice 13, which was promulgated on February 13, 2015 and with effect from June 1, 2015,
the foreign exchange registration under domestic direct investment and the foreign exchange registration under overseas direct investment
is directly reviewed and handled by banks in accordance with the SAFE Notice 13, and the SAFE and its branches shall perform indirect
regulation over the foreign exchange registration via banks.

Relating to Dividend Distributions

to the PRC Company Law and Foreign Investment Law, each of our PRC subsidiaries, as a foreign invested enterprise, or FIE, are required
to draw 10% of its after-tax profits each year, if any, to fund a common reserve, which may stop drawing its after-tax profits if the
aggregate balance of the common reserve has already accounted for over 50% of its registered capital. These reserves are not distributable
as cash dividends. Furthermore, under the EIT Law, which became effective in January 2008, the maximum tax rate for the withholding tax
imposed on dividend payments from PRC foreign invested companies to their overseas investors that are not regarded as "resident"
for tax purposes is 20%. The rate was reduced to 10% under the Implementing Regulations for the EIT Law issued by the State Council.
However, a lower withholding tax rate might be applied if there is a tax treaty between China and the jurisdiction of the foreign holding
companies, such as tax rate of 5% in the case of Hong Kong companies that holds at least 25% of the equity interests in the foreign-invested
enterprise, and certain requirements specified by PRC tax authorities are satisfied.

Relating to Overseas Listings

 On
July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council
jointly issued the "Opinions on Severely Cracking Down on Illegal Securities Activities According to Law," or the Opinions.
The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the
supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory
systems will be taken to deal with the risks and incidents of China-concept overseas listed companies, and cybersecurity and data privacy
protection requirements and similar matters.

 On
December 24, 2021, the China Securities Regulatory Commission, or the CSRC, issued Provisions of the State Council on the Administration
of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments) (the "Administration Provisions"),
and the Measures for the Overseas Issuance of Securities and Listing Record-Filings by Domestic Enterprises (Draft for Comments) (the
"Measures"), which were published for public comments only, for which the comment period expired on January 23, 2022.

 The
Administration Provisions and Measures (collectively, the "Draft Rules Regarding Overseas Listing") for overseas listings
lay out specific requirements for filing documents and include unified regulation management, strengthening regulatory coordination,
and cross-border regulatory cooperation. Domestic companies seeking to list abroad must carry out relevant security screening procedures
if their businesses involve such supervision. Companies endangering national security are among those off-limits for overseas listings.

 However,
on February 17, 2023, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic
Companies, or the Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023. The Trial Measures and its
supporting guidelines are formal regulations issued based on the Draft Rules Regarding Overseas Listing. The State Council on the Administration
of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments), although still in draft form, has effectively
been replaced by the Trial Measures and its supporting guidelines. The Trial Measures and its supporting guidelines, reiterate the basic
principles of the Draft Rules Regarding Overseas Listing and impose substantially the same requirements for the overseas securities offering
and listing by domestic enterprises. Pursuant to the Trial Measures, domestic companies that seek to offer or list securities overseas,
both directly and indirectly, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within
three working days following its submission of initial public offerings or listing application. If a domestic company fails to complete
the required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company
may be subject to administrative penalties, such as orders to rectify, warnings, fines, and its controlling shareholders, actual controllers,
the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and
fines.

to the Notice on the Administrative Arrangements for the Filing of the Overseas Securities Offering and Listing by Domestic Companies
from the CSRC, or the CSRC Notice, which was promulgated on February 17, 2023 and became effective on the same day, the domestic companies
that have already been listed overseas before the effective date of the Overseas Listing Trial Measures (i.e. March 31, 2023) shall be
deemed as existing issuers (the "Existing Issuers"). Existing Issuers are not required to complete the filing procedures
immediately, and they shall be required to file with the CSRC for any subsequent offerings. The Opinions, the Trial Measures and any
related implementing rules to be enacted may subject us to additional compliance requirements in future financial activities.

 In
August 2006, six PRC regulatory authorities, including the CSRC, jointly adopted the Regulations on Mergers and Acquisitions of Domestic
Enterprises by Foreign Investors, or the M&A Rules, amended in June 2009. The M&A Rules, among other things, require that if
an overseas company established or controlled by PRC companies or individuals, or PRC Citizens, intends to acquire equity interests or
assets of any other PRC domestic company affiliated with the PRC Citizens, such acquisition must be submitted to the MOFCOM for approval.
The M&A Rules also require that an Overseas SPV formed for overseas listing purposes and controlled directly or indirectly by the
PRC Citizens shall obtain the approval of the CSRC prior to overseas listing and trading of such Overseas SPV's securities on an
overseas stock exchange.

 Based
on current PRC laws and regulations, our corporate structure and arrangements are not subject to the M&A Rules. However, there are
substantial uncertainties as to how the M&A Rules will be interpreted or implemented in the context of an overseas offering, and
its opinions summarized above are subject to any new laws, rules and regulations or detailed implementations and interpretations in any
form relating to the M&A Rules.

Relating to Employment

 The
Labor Law of the People's Republic of China, or the Labor Law, which became effective in January 1995 and was amended in 2018,
and the Employment Contract Law of the People's Republic of China, or the Employment Contract Law, effective in January 2008 and
amended in 2012, require employers to provide written contracts to their employees, restrict the use of temporary workers and aim to
give employees long-term job security. Employers must pay their employees' wages equal to or above local minimum wage standards,
establish labor safety and workplace sanitation systems, comply with state labor rules and standards and provide employees with appropriate
training on workplace safety. In September 2008, the State Council promulgated the Implementing Regulations for the PRC Employment Contract
Law which became effective immediately and interprets and supplements the provisions of the Employment Contract Law.

 Under
the Labor Contract Law, an employer shall limit the number of dispatched workers so that they do not exceed a certain percentage of its
total number of workers. In January 2014, the MOHRSS issued the Interim Provisions on Labor Dispatching, which became effective in March
2014, pursuant to which it provides that the number of dispatched workers used by an employer shall not exceed 10% of the total number
of its employees.

 The
PRC governmental authorities have passed a variety of laws and regulations regarding social insurance and housing funds from time to
time, including, among others, the Social Insurance Law of the People's Republic of China, the Regulation of Insurance for Labor
Injury, the Regulations of Insurance for Unemployment, the Provisional Insurance Measures for Maternal Employees, the Interim Administrative
Provisions on Registration of Social Insurance and the Administrative Regulations on the Housing Provident Fund. Pursuant to these laws
and regulations, enterprises in the PRC shall provide their employees with welfare schemes covering pension insurance, unemployment insurance,
maternity insurance, occupational injury insurance and medical insurance, as well as housing fund and other welfare plans. Failure to
comply with such laws and regulations may result in various fines and legal sanctions and supplemental contributions to the local social
insurance and housing fund regulatory authorities.

Relating to Environmental Protection

 The
Environmental Protection Law of the PRC, or the Environmental Protection Law, was promulgated and effective on December 26, 1989, and
most recently amended on April 24, 2014.

 As
we conduct our manufacturing activities in China, we are subject to the requirements of PRC environmental laws and regulations on air
emission, wastewater discharge, solid waste and noise. The major environmental regulations applicable to us include the PRC Environmental
Protection Law, the PRC Law on the Prevention and Control of Water Pollution and its Implementation Rules, the PRC Law on the Prevention
and Control of Air Pollution and its Implementation Rules, the PRC Law on the Prevention and Control of Solid Waste Pollution, and the
PRC Law on the Prevention and Control of Noise Pollution. We aim to comply with environmental laws and regulations. We have built environmental
treatment facilities concurrently with the construction of our manufacturing facilities, where waste air, wastewater and waste solids
we generate can be treated in accordance with the relevant requirements. We outsource the disposal of solid waste we generate in the
Dalian facility to a third-party contractor. Certain key materials used in manufacturing, such as cobalt dioxide, electrolyte and separators,
have proven innocuous to worker's health and safety as well as the environment. We are not subject to any admonitions, penalties,
investigations or inquiries imposed by the environmental regulators, nor are we subject to any claims or legal proceedings to which we
are named as a defendant for violation of any environmental law or regulation. We are not aware of any threatened claim, action or legal
proceedings that would have a material adverse effect on our business, financial condition or results of operations.

Relating to Tax in the PRC

Tax

 The
PRC Enterprise Income Tax Law was promulgated in March 2007 and was most recently amended in December 2018. The PRC Enterprise Income
Tax Law applies a uniform 25% enterprise income tax rate to both foreign-invested enterprises and domestic enterprises, except where
tax incentives are granted to special industries and projects. Under the PRC Enterprise Income Tax Law, an enterprise established outside
China with "de facto management bodies" within China is considered a "resident enterprise" for PRC enterprise
income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income. Under the implementation
regulations to the PRC Enterprise Income Tax Law, a "de facto management body" is defined as the body that exercises full
and substantial control and overall management over the business, productions, personnel, accounts and properties of an enterprise.

 In
April 2009, the Ministry of Finance, or MOF, and SAT jointly issued the Notice on Issues Concerning Process of Enterprise Income Tax
in Enterprise Restructuring Business, or the Circular 59. In December 2009, SAT issued the Notice on Strengthening Administration of
Enterprise Income Tax for Share Transfers by Non-PRC Resident Enterprises, or the Circular 698. Both Circular 59 and Circular 698 became
effective retroactively as of January 2008. In March 2011, SAT issued the Notice on Several Issues Regarding the Income Tax of Non-PRC
Resident Enterprises, or the SAT Circular 24, effective in April 2011. By promulgating and implementing these circulars, the PRC tax
authorities have enhanced their scrutiny over the direct or indirect transfer of equity interests in a PRC resident enterprise by a non-resident
enterprise.

 In
February 2015, SAT issued the Notice on Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-PRC Resident Enterprises,
or the SAT Circular 7, to supersede existing provisions in relation to the indirect transfer as set forth in Circular 698, while the
other provisions of Circular 698 remain in force. SAT Circular 7 introduces a new tax regime that is significantly different from that
under Circular 698. SAT Circular 7 extends its tax jurisdiction to capture not only indirect transfers as set forth under Circular 698
but also transactions involving transfer of immovable property in China and assets held under the establishment, and placement in China,
of a foreign company through the offshore transfer of a foreign intermediate holding company. SAT Circular 7 also addresses transfer
of the equity interest in a foreign intermediate holding company broadly. In addition, SAT Circular 7 provides clearer criteria than
Circular 698 on how to assess reasonable commercial purposes and introduces safe harbor scenarios applicable to internal group restructurings.
However, it also brings challenges to both the foreign transferor and transferee of the indirect transfer as they have to determine whether
the transaction should be subject to PRC tax and to file or withhold the PRC tax accordingly. In October 2017, SAT issued the Announcement
on Issues Relating to Withholding at Source of Income Tax of Non-resident Enterprises, or the SAT Circular 37, amended in June 2018.
The SAT Circular 37 superseded the Non-resident Enterprises Measures and SAT Circular 698 as a whole and partially amended some provisions
in SAT Circular 24 and SAT Circular 7. SAT Circular 37 purports to clarify certain issues in the implementation of the above regime,
by providing, among others, the definition of equity transfer income and tax basis, the foreign exchange rate to be used in the calculation
of withholding amount, and the date of occurrence of the withholding obligation. Specifically, SAT Circular 37 provides that where the
transfer income subject to withholding at source is derived by a non-PRC resident enterprise in installments, the installments may first
be treated as recovery of costs of previous investments. Upon recovery of all costs, the tax amount to be withheld must then be computed
and withheld.

 Value-Added
Tax

 The
PRC Provisional Regulations on Value-Added Tax were promulgated by the State Council on December 13, 1993, which became effective on
January 1, 1994 and were subsequently amended from time to time. The Detailed Rules for the Implementation of the PRC Provisional Regulations
on Value-Added Tax (2011 Revision) was promulgated by the Ministry of Finance on December 25, 1993 and subsequently amended on December
15, 2008 and October 28, 2011. On November 19, 2017, the State Council promulgated the Decisions on Abolishing the PRC Provisional Regulations
on Business Tax and Amending the PRC Provisional Regulations on Value-Added Tax. Pursuant to these regulations, rules and decisions,
all enterprises and individuals engaged in sale of goods, provision of processing, repair, and replacement services, sales of services,
intangible assets, real property, and the importation of goods within the PRC territory are VAT taxpayers. On March 21, 2019, the Ministry
of Finance, the SAT, and the General Administration of Customs jointly issued the Announcement on Relevant Policies on Deepen the Reform
of Value-Added Tax. Sales revenue represents the invoiced value of goods, net of VAT. The VAT is based on gross sales price, starting
from April 1, 2019, VAT rate was lowered to 13%. On September 30, 2019, the Ministry of Finance and the State Taxation Administration
jointly issued the Announcement on Clarifying the VAT Additional Deduction Policy for the Living Services, pursuant to which, from October
1, 2019 to December 31, 2021, the taxpayers engaging in providing living services are allowed to deduct additional 15% of the deductible
input VAT amount for the current period from the payable tax. For aforementioned taxpayers providing production and living services relating
to Announcement on Policies for Deepening the VAT Reform and Announcement on Clarifying the VAT Additional Deduction Policy for the Living
Services, the input VAT additional deduction policies is further extended to December 31, 2022 according to the regulations. From January
1, 2023 to December 31, 2024, the VAT Additional Deduction policy is implemented in accordance with the following provisions: (i). Taxpayers
in the productive service industry are allowed to add 5% of the current deductible input tax to offset the taxable amount; (ii). Taxpayers
in the lifestyle service industry are allowed to deduct 10% of the current deductible input tax to offset the taxable amount. On December
25, 2024, the prevailing VAT regulations were enacted into the Value-Added Tax Law of the People's Republic of China, which will
come into effect on January 1, 2026.

 ITEM
1A. RISK FACTORS.

 RISKS
RELATED TO DOING BUSINESS IN CHINA

 The
PCAOB had historically been unable to inspect our former auditor in relation to their audit work performed for our financial statements
and the inability of the PCAOB to conduct inspections of our former auditor in the past has deprived our investors of the benefits of
such inspections. Our common stock may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is
unable to inspect or investigate completely auditors located in China. The delisting of our common stock, or the threat of its being
delisted, may materially and adversely affect the value of your investment.

 Our
current auditor, ARK Pro CPA & CO, as well as our former auditor, Centurion ZD CPA & Co, the independent registered public accounting
firms that issue the audit reports included elsewhere in this annual report, as auditors of companies that are traded publicly in the
United States and firms registered with the PCAOB, are currently subject to laws in the United States pursuant to which the PCAOB conducts
regular inspections to assess their compliance with the applicable professional standards. Both our current and former auditors are located
in Hong Kong, a jurisdiction where the PCAOB was historically unable to conduct inspections and investigations completely before 2022.
As a result, we and investors in our common stock were deprived of the benefits of such PCAOB inspections until 2022. The inability of
the PCAOB to conduct inspections of auditors in Hong Kong in the past has made it more difficult to evaluate the effectiveness of our
independent registered public accounting firms' audit procedures or quality control procedures as compared to auditors that are
subject to the PCAOB inspections. On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and
removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered
public accounting firms. However, if the PCAOB determines in the future that it no longer has full access to inspect and investigate
completely accounting firms in mainland China and Hong Kong, and we use an accounting firm headquartered in one of these jurisdictions
to issue an audit report on our financial statements filed with the SEC, we and investors in our common stock would be deprived of the
benefits of such PCAOB inspections again, which could cause investors and potential investors in our common stock to lose confidence
in our audit procedures and reported financial information and the quality of our financial statements.

to the HFCAA, as amended, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has
not been subject to inspections by the PCAOB for two consecutive years, the SEC will prohibit our common stock from being traded on a
national securities exchange or in the over-the-counter trading markets in the United States.

 On
December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate
completely registered public accounting firms headquartered in mainland China and Hong Kong and our auditor was subject to that determination.
In May 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of our annual report
on Form 10-K for the fiscal year ended December 31, 2021. On December 15, 2022, the PCAOB removed mainland China and Hong Kong from the
list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. For this reason, we
have not been identified as a Commission-Identified Issuer after we filed on April 14, 2023 the annual report on Form 10-K for the fiscal
year ended December 31, 2022 and we do not expect to be identified as a Commission-Identified Issuer under the HFCAA after we file this
annual report on Form 10-K for the fiscal year ended December 31, 2024.

 Each
year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other
jurisdictions. If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting
firms in mainland China and Hong Kong and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report
on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the
annual report on Form 10-K for the relevant fiscal year. In accordance with the HFCAA, as amended, our securities would be prohibited
from being traded on a national securities exchange or in the over-the-counter trading market in the United States if we are identified
as a Commission-Identified Issuer for two consecutive years in the future. A prohibition of being able to trade in the United States
would substantially impair your ability to sell or purchase our common stock when you wish to do so, and the risk and uncertainty associated
with delisting would have a negative impact on the price of our common stock. Also, such a prohibition would significantly affect our
ability to raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial
condition, and prospects.

 The
PRC government exerts substantial influence over the manner in which we conduct our business activities. Its oversight and discretion
over our business could result in a material adverse change in our operations and the value of our common stock. Changes in laws, regulations
and policies in China and uncertainties with respect to the PRC legal system could materially and adversely affect us. In addition, rules
and regulations in China can change quickly. Nevertheless, the Chinese government has been actively promoting exports and adopting customs
policies in line with those of major global economies. In recent years, despite potentially rapid changes, domestic rules and regulations
in China have significantly supported the development of the clean energy industry. However, in the event of significant geopolitical
conflicts, the Chinese government may adjust its export promotion policies to restrict the sale of certain products to specific regions.

 All
of our operations are conducted in the PRC, while a portion of our products are sold to Europe, the US, India, Southeast Asian countries,
and other regions. Accordingly, our financial condition and results of operations are affected to a significant extent by the economic,
political and legal developments in the PRC. The PRC economy differs from the economies of most developed countries in many respects,
including the extent of government involvement, level of development, growth rate, and control of foreign exchange and allocation of
resources. The PRC government has implemented various measures to encourage economic growth and to guide the allocation of resources.
Some of these measures may benefit the overall PRC economy but may also have a negative effect on us. Our financial condition and results
of operations could be materially and adversely affected by government control over capital investments or changes in tax regulations
that are applicable to us. However, the PRC government has actively encouraged foreign capital to invest in China and has an open mindset
welcoming a free-market economy in areas unrelated to military and national security.

 The
Chinese government in recent years has published new policies that significantly affected certain industries such as the education and
internet industries, and we cannot rule out the possibility that it will not in the future release regulations or policies regarding
our industry that could require us or our PRC subsidiaries to seek permission from Chinese authorities to continue to operate our business
in China, which may adversely affect our business, financial condition and results of operations. Furthermore, recent statements made
by the Chinese government have indicated an intent to increase the government's oversight and control over offerings of companies
with significant operations in China that are to be conducted in foreign markets, as well as foreign investment in China-based issuers
like us. Any such action, once taken by the Chinese government, could significantly limit or completely hinder our ability to offer our
securities, and could cause the value of such securities to significantly decline or become worthless.

 For
example, in July 2021, the Chinese government provided new guidance on China-based companies raising capital outside of China, including
through arrangements via VIEs. In light of such developments, the SEC has imposed enhanced disclosure requirements on China-based companies
seeking to register securities with the SEC. Although we have never adopted a VIE structure and our business in China does not involve
any type of restricted industry under Chinese regulations, any future Chinese, U.S. or other rules and regulations that place restrictions
on capital raising or other activities by companies with extensive operations in China could adversely affect our business. If the business
environment in China deteriorates from the perspective of domestic or international investment, or if relations between China and the
United States or other governments deteriorate, the Chinese government may intervene with our operations, and our business in China,
as well as the value of our securities, may also be adversely affected.

 The
PRC government has increasingly strengthened oversight in offerings conducted overseas or on foreign investment in China-based issuers,
which could result in a material change in our operations and our common stock could decline in value or become worthless.

 The
PRC government has recently indicated an intent to take actions to exert more oversight and control over offerings that are conducted
overseas and/or foreign investment in China-based issuers. For example, on July 6, 2021, the relevant PRC government authorities made
public the Opinions on Strictly Scrutinizing Illegal Securities Activities in Accordance with the Law, or the Opinions. These Opinions
emphasized the need to strengthen the administration over illegal securities activities and the supervision of overseas listings by China-based
companies and proposed to take effective measures, such as promoting the construction of relevant regulatory systems to deal with the
risks and incidents faced by China-based over-seas-listed companies.

 On
December 24, 2021, the CSRC issued the Provisions of the State Council on the Administration of Overseas Securities Offering and Listing
by Domestic Companies (Draft for Comments) and the Administrative Measures for the Filing of Overseas Securities Offering and Listing
by Domestic Companies (Draft for Comments), collectively the Draft Overseas Listing Regulations, for public comment until January 23,
2022.

 Following
issuance of the Draft Overseas Listing Regulations, on February 17, 2023, the CSRC issued the Notice on Filing Arrangements for Overseas
Securities Offering and Listing by Domestic Companies (the "CSRC Filing Notice"), stating that the CSRC has published the
Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the "Trial Measures") and
five supporting guidelines (the "Listing Guidelines"), collectively the Trial Measures and Listing Guidelines. Among others,
the Trial Measures and Listing Guidelines provide that overseas offerings and listings by PRC domestic companies shall:

 (i)

 require submission of relevant
 materials that contain a filing report and a legal opinion, providing truthful, accurate and complete information on matters including
 but not limited to the shareholders of the issuer. Where the filing documents are complete and in compliance with stipulated requirements,
 the CSRC shall, within 20 working days after receipt of filing documents, conclude the filing procedure and publish filing results
 on the CSRC website. Where filing documents are incomplete or do not conform to stipulated requirements, the CSRC shall request supplementation
 and amendment thereto within five working days after receipt of the filing documents. The issuer should then complete supplementation
 and amendment within 30 working days;

 (ii)

 abide by laws, administrative
 regulations and relevant state rules concerning foreign investment in China, state-owned asset administration, industry regulation
 and outbound investment, and shall not disrupt the PRC domestic market order, harm state or public interests or undermine the lawful
 rights and interests of PRC domestic investors;

 (iii)

 abide by national secrecy
 laws and relevant provisions. Necessary measures shall be taken to fulfill confidentiality obligations. Divulgence of state secrets
 or working secrets of government agencies is strictly prohibited. Provision of personal information and important data, etc., to
 overseas parties in relation to overseas offering and listing of PRC domestic companies shall be in compliance with applicable laws,
 administrative regulations and relevant state rules; and

 (iv)

 be made in strict compliance
 with relevant laws, administrative regulations and rules concerning national security in the spheres of foreign investment, cybersecurity,
 data security, etc., and issuers shall duly fulfill their obligations to protect national security. If the intended overseas offering
 and listing necessitates a national security review, relevant security review procedures shall be completed according to the law
 before the application for such offering and listing is sub-mitted to any overseas parties such as securities regulatory agencies
 and trading venues;

 The
Trial Measures came into effect on March 31, 2023. PRC domestic companies seeking to offer and list securities (which, for the purposes
of the Trial Measures, are defined thereunder as equity shares, depository receipts, corporate bonds convertible to equity shares, and
other equity securities that are offered and listed overseas, either directly or indirectly, by PRC domestic companies) in overseas markets,
either via direct or indirect means, must file with the CSRC with-in three working days after their application for an overseas listing
is submitted.

 The
Trial Measures provide that where a PRC domestic company seeks to indirectly offer and list securities in overseas markets, the issuer
shall designate a major domestic operating entity, which shall, as the domestic entity responsible, file with the CSRC. The Trial Measures
stipulate that an overseas listing will be determined as "indirect" if the issuer meets both of the following conditions:
(1) 50% or more of any of the issuer's operating revenue, total profit, total assets or net assets as documented in its audited
consolidated financial statements for the most recent accounting year are accounted for by PRC domestic companies ("Condition I"),
and (2) the main parts of the issuer's business activities are conducted in the PRC, or its main places of business are located
in the PRC, or the senior managers in charge of its business operations and management are mostly Chinese citizens or domiciled in the
PRC ("Condition II"); whether Chinese citizens from Taiwan, Hong Kong, and Macau are included in the foregoing specification
is not specified. The determination as to whether or not an overseas offering and listing by PRC domestic companies is indirect shall
be made on a 'substance over form' basis; the Listing Guidelines further stipulate that if an issuer not satisfying Condition
I submits an application for issuance and listing in overseas markets in accordance with relevant non-PRC issuance regulations requiring
such issuer to disclose risk factors mainly related to the PRC, the securities firm(s) and the issuer's PRC counsel should follow
the principle of 'sub-stance over form' in order to identify and argue whether the issuer should complete a filing under
the Trial Measures. Sub-sequent securities offerings of an issuer in (i) the same overseas market where it has previously offered and
listed securities, and (ii) an overseas market other than one where the issuer has previously offered and listed securities shall be
filed with the CSRC within three working days after offerings are completed. Additionally, the Trial Measures stipulate that after an
issuer has offered and listed securities in an overseas market, the issuer shall submit a report to the CSRC within three working days
after the occurrence and public disclosure of (i) a change of control thereof, (ii) investigations of or sanctions imposed on the issuer
by overseas securities regulators or relevant competent authorities, (iii) changes of listing status or transfers of listing segment,
and (iv) a voluntary or mandatory delisting.

 The
CSRC Filing Notice states that, beginning from March 31, 2023, PRC domestic enterprises which have already issued and listed securities
overseas and fall within the scope of filing under the Trial Measures shall be considered "existing enterprises" ("Existing
Listed Enterprises"). Existing Listed Enterprises are not required to complete filings immediately; rather, Existing Listed Enterprises
should complete filings if they are subsequently involved in matters require filings, such as follow-on financing activities, in accordance
with the Trial Measures.

 There
is a possibility that we may be deemed as an Existing Listed Enterprise as defined under the CSRC Filing Notice, and that future offerings
of listed securities or listings outside China by us may be subject to CSRC filing requirements in accordance with the Trial Measures.

 On
February 24, 2023, the CSRC, together with the Ministry of Finance, National Administration of State Secrets Protection and National
Archives Administration of China, revised the Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities
Offering and Listing, which were issued by the CSRC and National Administration of State Secrets Protection and National Archives Administration
of China in 2009, or the "Provisions." The revised Provisions were issued under the title the "Provisions on Strengthening
Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies," and came into effect
on March 31, 2023 together with the Trial Measures. One of the major revisions to the revised Provisions is expanding their application
to cover indirect overseas offering and listing, as is consistent with the Trial Measures. The revised Provisions require that, among
other things, (a) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose
or provide to relevant individuals or entities, including securities companies, securities service providers, and overseas regulators,
any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent
authorities according to law, and file with the secrecy administrative department at the same level; and (b) a domestic company that
plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and
entities, including securities companies, securities service providers, and overseas regulators, any other documents and materials that,
if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable
national regulations. Any failure or perceived failure by our Company, or our PRC subsidiaries to comply with the above confidentiality
and archives administration requirements under the revised Provisions and other PRC laws and regulations may result in the relevant entities
being held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected
of committing a crime.

 Given
that the Trial Measures, Listing Guidelines and Revised Provisions have been introduced recently, and that there remain substantial uncertainties
surrounding the enforcement thereof, we cannot assure you that, if required, we would be able to complete the filings and fully comply
with the relevant new rules on a timely basis, if at all. Further, as of the date of this report, the aforementioned Provisions of the
State Council on the Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments) issued on
December 24, 2021, although effectively replaced by the Trial Measures and its supporting guidelines, remain in draft form. The final
and effective versions are yet to be published.

 Changes
in U.S. and Chinese regulations or in relations between the United States and China may adversely impact our business, our operating
results, our ability to raise capital and the value of our securities. Any such changes may take place quickly and with very little notice.

 The
U.S. government, including the SEC, has made statements and taken certain actions that led to changes to United States and international
relations, and will impact companies with connections to the United States or China. The SEC has issued statements primarily focused
on companies with significant China-based operations, such as us. For example, on July 30, 2021, Gary Gensler, former Chairman of the
SEC, issued a Statement on Investor Protection Related to Recent Developments in China, pursuant to which Chairman Gensler stated that
he has asked the SEC staff to engage in targeted additional reviews of filings for companies with significant China-based operations.
The statement also addressed risks inherent in companies with VIE structures. We have never adopted a VIE structure and are not in any
industry that is subject to foreign ownership limitations by China. However, it is possible that the Company's filings with the
SEC may be subject to enhanced review by the SEC.

 In
response to the SEC's July 30, 2021 statement, the CSRC announced on August 1, 2021, that "it is our belief that Chinese
and U.S. regulators shall continue to enhance communication with the principle of mutual respect and cooperation, and properly address
the issues related to the supervision of China-based companies listed in the U.S. so as to form stable policy expectations and create
benign rules framework for the market." The CSRC pledged to continue to collaborate "closely with different stakeholders
including investors, companies, and relevant authorities to further promote transparency and certainty of policies and implementing measures,"
and emphasized that it "has always been open to companies' choices to list their securities on international or domestic
markets in compliance with relevant laws and regulations." If any new legislation, executive orders, laws and/or regulations are
implemented, if the U.S. or Chinese governments take retaliatory actions due to the recent U.S.-China tension or if the Chinese government
exerts more oversight and control over securities offerings that are conducted in the United States, such changes could have an adverse
effect on our business, financial condition and results of operations, our ability to raise capital and the value of our securities.

 In
August 2023, former President Biden issued an executive order to restrict U.S. investments in sensitive technologies in the Chinese mainland,
Hong Kong, and Macau, such as advanced computing chips, quantum technology, and artificial intelligence. As of the date of this annual
report, the final rules implementing the order have not become effective yet, and the scope of the review program may be materially different
from what is currently contemplated by the advance notice. Therefore, there are substantial uncertainties on whether the outbound foreign
direct investment review program will have a material impact on our business, results of operations, financial condition, and prospects.

 On
the other hand, the United States and China have imposed new or higher tariffs on goods imported from each other, including tariff increases
announced by both countries in early 2025. If the United States or China continues imposing such tariffs, or if additional tariffs or
trade restrictions are implemented by the United States or by China, the resulting trade barriers could have a significant adverse impact
on our business. The adoption and expansion of trade restrictions and tariffs, quotas and embargoes, sanctions, the occurrence of a trade
war, or other governmental action related to tariffs or trade agreements or policies, has the potential to adversely impact costs, our
suppliers and the world economy in general, which in turn could have a material adverse effect on our business, results of operations
and financial condition.

 We
cannot foresee whether and how developments in similar policy actions or any other policy actions taken by the U.S. or Chinese government
will impact our business and financial performance. In addition, changes in political, business, economic and trade relations between
the U.S. and China, including the potential for heightened tensions under the current U.S. administration, may trigger negative customer
sentiment towards western brands in China, potentially resulting in a negative impact on our business, results of operations and financial
condition.

 There
are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations.

 Substantially
all of our operations are conducted in the PRC, and are governed by PRC laws, rules and regulations. Our PRC subsidiaries are subject
to laws, rules and regulations applicable to foreign investment in China. The PRC legal system is a civil law system based on written
statutes. Unlike the common law system, prior court decisions may be cited for reference but have limited precedential value. In 1979,
the PRC government began to promulgate a comprehensive system of laws, rules and regulations governing economic matters in general. The
overall effect of legislation over the past four decades has significantly enhanced the protections afforded to various forms of foreign
investment in China. However, China has not developed a fully integrated legal system, and recently enacted laws, rules and regulations
may not sufficiently cover all aspects of economic activities in China or may be subject to significant degrees of interpretation by
PRC regulatory agencies. In particular, because these laws, rules and regulations are relatively new, and because of the limited number
of published decisions and the nonbinding nature of such decisions, and because the laws, rules and regulations often give the relevant
regulator significant discretion in how to enforce them, the interpretation and enforcement of these laws, rules and regulations involve
uncertainties and can be inconsistent and unpredictable. In addition, the PRC legal system is based in part on government policies and
internal rules, some of which are not published on a timely basis or at all, and may have a retroactive effect. As a result, we may not
be aware of our violation of these policies and rules until after the occurrence of the violation. Any administrative and court proceedings
in China may be protracted, resulting in substantial costs and diversion of resources and management attention.

 PRC
laws and regulations establish complex procedures in connection with certain acquisitions of China-based companies by foreign investors,
which could make it more difficult for us to pursue growth through acquisitions or mergers in China.

 On
August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce ("MOFCOM"), the State-Owned Assets Supervision
and Administration Commission, the State Administration of Taxation, the State Administration for Industry and Commerce, the CSRC, and
the State Administration of Foreign Exchange, jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by
Foreign Investors, or the M&A Rules, which came into effect on September 8, 2006 and were amended on June 22, 2009. The M&A Rules
include, among other things, provisions that purport to require that an offshore special purpose vehicle formed for the purpose of an
overseas listing of securities of a PRC company obtain the approval of the CSRC prior to the listing and trading of such special purpose
vehicle's securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures
regarding its approval of overseas listings through special purpose vehicles. However, substantial uncertainty remains regarding the
scope and applicability of the M&A Rules to offshore special purpose vehicles.

 The
regulations also established additional procedures and requirements that are expected to make merger and acquisition activities in China
by foreign investors more time consuming and complex, including requirements in some instances that the MOFCOM be notified in advance
of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise, or that the approval from
the MOFCOM be obtained in circumstances where overseas companies established or controlled by PRC enterprises or residents acquire affiliated
domestic companies.

 Moreover,
according to the Anti-Monopoly Law of the People's Republic of China promulgated on August 30, 2007 and the Provisions on Thresholds
for Reporting of Concentrations of Undertakings (the "Prior Reporting Rules") issued by the State Council in August 2008
and amended in September 2018, the concentration of business undertakings by way of mergers, acquisitions or contractual arrangements
that allow one market player to take control of or to exert decisive impact on another market player must also be notified in advance
to the anti-monopoly enforcement agency of the State Council when the applicable threshold is crossed and such concentration shall not
be implemented without the clearance of prior reporting. In addition, the Regulations on Implementation of Security Review System for
the Merger and Acquisition of Domestic Enterprise by Foreign Investors (the "Security Review Rules") issued by the MOFCOM
that became effective in September 2011 specify that mergers and acquisitions by foreign investors that raise "national defense
and security" concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic
enterprises that raise "national security" concerns are subject to strict review by the MOFCOM, and the rules prohibit any
activities attempting to bypass a security review by structuring the transaction through, among other things, trusts, entrustment or
contractual control arrangements.

 In
the event that our acquisition of other companies in China falls within the scope of these regulations, compliance with these regulations
to complete such transactions could be time-consuming, and any required approval processes, including approval from the MOFCOM, may delay
or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share.

 CBAK
Energy Technology, Inc., as a holding company incorporated in Nevada, the United States, without material operations of its own, relies
on dividends and other distributions on equity paid by its PRC operating subsidiaries for its cash needs.

 CBAK
Energy Technology, Inc. is a holding company, and we conduct all of our operations through our PRC subsidiaries. CBAK Energy Technology,
Inc. relies on dividends and other distributions on equity paid by its PRC subsidiaries for its cash needs, including the funds necessary
to pay dividends and other cash distributions to its stockholders, to service any debt it may incur and to pay its operating expenses.
Current regulations in the PRC permit payment of dividends only out of accumulated profits as determined in accordance with PRC accounting
standards and regulations. According to the articles of association of our PRC subsidiaries, each of our PRC subsidiaries is required
to set aside at least 10% of its after-tax profit based on the PRC accounting standards and regulations each year to its statutory general
reserve, until the balance in the reserve reaches 50% of the registered capital of the company. Funds in the reserve are not distributable
to CBAK Energy Technology, Inc. in forms of cash dividends, loans or advances. In addition, if our PRC subsidiaries incur debt on their
own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions
to CBAK Energy Technology, Inc., which in turn will adversely affect its available cash.

 In
addition, our PRC subsidiaries' ability to pay dividends and other cash distributions is subject to foreign exchange restrictions
in China. For example, to address persistent capital outflows and the RMB's depreciation against the U.S. dollar in the fourth
quarter of 2016, the People's Bank of China and the State Administration of Foreign Exchange, or SAFE, implemented a series of
capital control measures in the subsequent months, including stricter vetting procedures for China-based companies to remit foreign currency
for overseas acquisitions, dividend payments and shareholder loan repayments. The PRC government may continue to strengthen its capital
controls and our PRC subsidiaries' dividends and other distributions may be subject to tightened scrutiny in the future. The PRC
government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore,
we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment
of dividends from our profits, if any.

 As
a matter of fact, we have never declared or paid any dividends to CBAK Energy Technology, Inc.'s stockholders, nor do we have any
present plan to pay any cash dividends on the common stock in the foreseeable future. We currently intend to retain most, if not all,
of our available funds and any future earnings to operate and expand our business.

 Fluctuations
in exchange rates could adversely affect our business and the value of our securities.

 The
value of our securities will be indirectly affected by the foreign exchange rate between the U.S. dollar and RMB and between those currencies
and other currencies in which our sales may be denominated. Appreciation or depreciation in the value of the RMB relative to the U.S.
dollar would affect our financial results reported in U.S. dollar terms without giving effect to any underlying change in our business
or results of operations. Fluctuations in the exchange rate will also affect the relative value of any dividend we issue that will be
exchanged into U.S. dollars, as well as earnings from, and the value of, any U.S. dollar-denominated investments we make in the future.

 Very
limited hedging transactions are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered
into any hedging transactions. While we may enter into hedging transactions in the future, the availability and effectiveness of these
transactions may be limited, and we may not be able to successfully hedge our exposure at all. In addition, our foreign currency exchange
losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currencies. As a result,
fluctuations in exchange rates may have a material adverse effect on your investment.

 Investors
may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in China
based upon U.S. laws, including the federal securities laws or other foreign laws against us or our management.

 All
of our current operations are conducted in China. Moreover, most of our current directors and officers are nationals or residents of
China. All or a substantial portion of the assets of these persons are located outside the United States and in the PRC. As a result,
it may not be possible to effect service of process within the United States or elsewhere outside China upon these persons. In addition,
uncertainty exists as to whether the courts of China would recognize or enforce judgments of U.S. courts obtained against us or such
officers and/or directors predicated upon the civil liability provisions of the securities laws of the United States or any state thereof,
or be competent to hear original actions brought in China against us or such persons predicated upon the securities laws of the United
States or any state thereof.

 PRC
regulation of loans to, and direct investment in, PRC entities by offshore holding companies and governmental control of currency conversion
may restrict or prevent CBAK Energy Technology, Inc. from making additional capital contributions or loans to its PRC subsidiaries.

 CBAK
Energy Technology, Inc., as an offshore holding company, is permitted under PRC laws and regulations to provide funding to its PRC subsidiaries
through loans or capital contributions. However, loans by CBAK Energy Technology, Inc. to its PRC subsidiaries to finance their activities
cannot exceed statutory limits and must be registered with the local counterpart of the State Administration of Foreign Exchange and
capital contributions to its PRC subsidiaries are subject to the requirement of making necessary filings in the Foreign Investment Comprehensive
Management Information System, and registration with other governmental authorities in China.

 The
State Administration of Foreign Exchange promulgated the Notice of the State Administration of Foreign Exchange on Reforming the Administration
of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises, or Circular 19, effective on June 1, 2015, in replacement
of the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign
Currency Capital of Foreign-Invested Enterprises, the Notice from the State Administration of Foreign Exchange on Relevant Issues Concerning
Strengthening the Administration of Foreign Exchange Businesses, and the Circular on Further Clarification and Regulation of the Issues
Concerning the Administration of Certain Capital Account Foreign Exchange Businesses. According to Circular 19, the flow and use of the
RMB capital converted from foreign currency-denominated registered capital of a foreign-invested company is regulated such that RMB capital
may not be used for the issuance of RMB entrusted loans, the repayment of inter-enterprise loans or the repayment of bank loans that
have been transferred to a third party. Although Circular 19 allows RMB capital converted from foreign currency-denominated registered
capital of a foreign-invested enterprise to be used for equity investments within the PRC, it also reiterates the principle that RMB
converted from the foreign currency-denominated capital of a foreign-invested company may not be directly or indirectly used for purposes
beyond its business scope. Thus, it is unclear whether the State Administration of Foreign Exchange will permit such capital to be used
for equity investments in the PRC in actual practice. The State Administration of Foreign Exchange promulgated the Notice of the State
Administration of Foreign Exchange on Reforming and Standardizing the Foreign Exchange Settlement Management Policy of Capital Account,
or Circular 16, effective on June 9, 2016, which reiterates some of the rules set forth in Circular 19, but changes the prohibition against
using RMB capital converted from foreign currency-denominated registered capital of a foreign-invested company to issue RMB entrusted
loans to a prohibition against using such capital to grant loans to non-associated enterprises. Violations of Circular 19 and Circular
16 could result in administrative penalties. Circular 19 and Circular 16 may significantly limit our ability to transfer any foreign
currency CBAK Energy Technology, Inc. holds to its PRC subsidiaries, which may adversely affect our liquidity and our ability to fund
and expand our business in the PRC.

 In
light of the various requirements imposed by PRC regulations on loans to, and direct investment in, PRC entities by offshore holding
companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government
approvals on a timely basis, if at all, with respect to future loans or future capital contributions by us to our PRC subsidiaries. As
a result, uncertainties exist as to our ability to provide prompt financial support to our PRC subsidiaries when needed. If we fail to
complete such registrations or obtain such approvals, our ability to use foreign currency and to capitalize or otherwise fund our PRC
operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our
business.

 Failure
to comply with PRC regulations relating to the investment in offshore special purpose companies by PRC residents may subject our PRC
resident stockholders to personal liability, limit our ability to acquire PRC companies or to inject capital into our PRC subsidiaries,
limit our PRC subsidiaries' ability to distribute profits to us or otherwise materially adversely affect us.

 On
July 14, 2014, SAFE issued the Circular on Relevant Issues Relating to Domestic Residents' Investment and Financing and Roundtrip
Investment through Special Purpose Vehicles ("Circular 37"), which replaced the Circular 75, promulgated by SAFE on October
21, 2005. Circular 37 requires PRC residents to register with local branches of SAFE in connection with their direct establishment or
indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents' legally
owned assets or equity interests in domestic enterprises or offshore assets or interests, referred to in Circular 37 as a "special
purpose vehicle."

 We
have notified substantial beneficial owners of our company who we know are PRC residents to comply with the registration obligation.
However, we may not be aware of the identities of all our beneficial owners who are PRC residents. In addition, we do not have control
over our beneficial owners and cannot assure you that all of our PRC resident beneficial owners will comply with Circular 37. The failure
of our beneficial owners who are PRC residents to register or amend their SAFE registrations in a timely manner pursuant to Circular
37 or the failure of future beneficial owners of our company who are PRC residents to comply with the registration procedures set forth
in Circular 37 may subject such beneficial owners or our PRC subsidiaries to fines and legal sanctions. Failure to register or amend
the registration may also limit our ability to contribute additional capital to our PRC subsidiaries or receive dividends or other distributions
from our PRC subsidiaries or other proceeds from disposal of our PRC subsidiaries, or we may be penalized by SAFE. These risks may have
a material adverse effect on our business, financial condition and results of operations.

 Under
the Enterprise Income Tax Law, we may be classified as a "resident enterprise" of China. Such classification will likely
result in unfavorable tax consequences to us and our non-PRC shareholders.

 On
March 16, 2007, the National People's Congress of China passed a new Enterprise Income Tax Law, or the EIT Law, and on November
28, 2007, the State Council of China passed its implementing rules, which took effect on January 1, 2008. Under the EIT Law, an enterprise
established outside of China with "de facto management bodies" within China is considered a "resident enterprise,"
meaning that it can be treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. The implementing rules
of the EIT Law define de facto management as "substantial and overall management and control over the production and operations,
personnel, accounting, and properties" of the enterprise.

 On
April 22, 2009, the State Administration of Taxation issued the Notice Concerning Relevant Issues Regarding Cognizance of Chinese Investment
Controlled Enterprises Incorporated Offshore as Resident Enterprises pursuant to Criteria of de facto Management Bodies, or the Notice,
further interpreting the application of the EIT Law and its implementation non-Chinese enterprise or group controlled offshore entities.
Pursuant to the Notice, an enterprise incorporated in an offshore jurisdiction and controlled by a Chinese enterprise or group will be
classified as a "non-domestically incorporated resident enterprise" if (i) its senior management in charge of daily operations
reside or perform their duties mainly in China; (ii) its financial or personnel decisions are made or approved by bodies or persons in
China; (iii) its substantial assets and properties, accounting books, corporate chops, board and shareholder minutes are kept in China;
and (iv) at least half of its directors with voting rights or senior management often resident in China. A resident enterprise would
be subject to an enterprise income tax rate of 25% on its worldwide income and must pay a withholding tax at a rate of 10% when paying
dividends to its non-PRC shareholders. In addition, the SAT issued the Announcement of the State Administration of Taxation on Issues
concerning the Determination of Resident Enterprises Based on the Standards of Actual Management Institutions in January 2014 to provide
more guidance on the implementation of Circular 82. This bulletin further provides that, among other things, an entity that is classified
as a "resident enterprise" in accordance with the circular shall file the application for classifying its status of residential
enterprise with the local tax authorities where its main domestic investors are registered. From the year in which the entity is determined
to be a "resident enterprise," any dividend, profit and other equity investment gains from other resident enterprises within
China in previous years (on or after January 1, 2008) shall be taxed in accordance with the enterprise income tax law and its implementing
rules.

 We
may be deemed to be a resident enterprise by Chinese tax authorities. If the PRC tax authorities determine that we are a "resident
enterprise" for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, we may be
subject to the enterprise income tax at a rate of 25% on our worldwide taxable income as well as PRC enterprise income tax reporting
obligations. In our case, this would mean that income such as interest on financing proceeds and non-China source income would be subject
to PRC enterprise income tax at a rate of 25%. Second, although under the EIT Law and its implementing rules dividends paid to us from
our PRC subsidiaries would qualify as "tax-exempt income," we cannot guarantee that such dividends will not be subject to
a 10% withholding tax, as the PRC foreign exchange control authorities, which enforce the withholding tax, have not yet issued guidance
with respect to the processing of outbound remittances to entities that are treated as resident enterprises for PRC enterprise income
tax purposes. Finally, it is possible that future guidance issued with respect to the new "resident enterprise" classification
could result in a situation in which a 10% withholding tax is imposed on dividends we pay to our non-PRC shareholders and with respect
to gains derived by our non-PRC stockholders from transferring our shares. If we were treated as a "resident enterprise"
by the PRC tax authorities, we would be subject to taxation in both the U.S. and China, and our PRC tax may not be used as a credit to
reduce our U.S. tax.

 We
and our stockholders face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises or other assets
attributed to a Chinese establishment of a non-Chinese company, or immovable properties located in China owned by non-Chinese companies.

 In
October 2017, the State Administration of Taxation issued the Bulletin on Issues Concerning the Withholding of Non-PRC Resident Enterprise
Income Tax at Source, or Bulletin 37, which replaced the Notice on Strengthening Administration of Enterprise Income Tax for Share Transfers
by Non-PRC Resident Enterprises issued by the State Administration of Taxation on December 10, 2009, and partially replaced and supplemented
rules under the Bulletin on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC Resident Enterprises, or Bulletin
7, issued by the State Administration of Taxation on February 3, 2015. Pursuant to Bulletin 7, an "indirect transfer" of
PRC assets, including a transfer of equity interests in an unlisted non-PRC holding company of a PRC resident enterprise, by non-PRC
resident enterprises may be re-characterized and treated as a direct transfer of the underlying PRC assets, if such arrangement does
not have a reasonable commercial purpose and was established for the purpose of avoiding payment of PRC enterprise income tax. As a result,
gains derived from such indirect transfer may be subject to PRC enterprise income tax. According to Bulletin 7, "PRC taxable assets"
include assets attributed to an establishment in China, immoveable properties located in China, and equity investments in PRC resident
enterprises and any gains from the transfer of such asset by a direct holder, who is a non-PRC resident enterprise, would be subject
to PRC enterprise income taxes. When determining whether there is a "reasonable commercial purpose" of the transaction arrangement,
features to be taken into consideration include: whether the main value of the equity interest of the relevant offshore enterprise derives
from PRC taxable assets; whether the assets of the relevant offshore enterprise mainly consists of direct or indirect investment in China
or if its income mainly derives from China; whether the offshore enterprise and its subsidiaries directly or indirectly holding PRC taxable
assets have real commercial nature which is evidenced by their actual function and risk exposure; the duration of existence of the business
model and organizational structure; the replicability of the transaction by direct transfer of PRC taxable assets; and the tax situation
of such indirect transfer and applicable tax treaties or similar arrangements. In the case of an indirect offshore transfer of assets
of a PRC establishment, the resulting gain is to be included with the enterprise income tax filing of the PRC establishment or place
of business being transferred, and may consequently be subject to PRC enterprise income tax at a rate of 25%. Where the underlying transfer
relates to immoveable properties located in China or to equity investments in a PRC resident enterprise, which is not related to a PRC
establishment or place of business of a non-resident enterprise, a PRC enterprise income tax of 10% would apply, subject to available
preferential tax treatment under applicable tax treaties or similar arrangements, and the party who is obligated to make the transfer
payments has the withholding obligation. Pursuant to Bulletin 37, the withholding agent shall declare and pay the withheld tax to the
competent tax authority in the place where such withholding agent is located within 7 days from the date of occurrence of the withholding
obligation, while the transferor is required to declare and pay such tax to the competent tax authority within the statutory time limit
according to Bulletin 7. Late payment of applicable tax will subject the transferor to default interest. Both Bulletin 37 and Bulletin
7 do not apply to transactions of sale of shares by investors through a public stock exchange where such shares were acquired from a
transaction through a public stock exchange.

 There
is uncertainty as to the application of Bulletin 37 or previous rules under Bulletin 7. We face uncertainties as to the reporting and
other implications of certain past and future transactions where PRC taxable assets are involved, such as offshore restructuring, sale
of the shares in our offshore subsidiaries or investments. Our company may be subject to filing obligations or taxes if our company is
transferor in such transactions, and may be subject to withholding obligations if our company is transferee in such transactions, under
Bulletin 37 and Bulletin 7. For transfer of shares in our company by investors that are non-PRC resident enterprises, our PRC subsidiary
may be requested to assist in the filing under Bulletin 37 and Bulletin 7. As a result, we may be required to expend valuable resources
to comply with Bulletin 37 and Bulletin 7 or to request the relevant transferors from whom we purchase taxable assets to comply with
these circulars, or to establish that our company should not be taxed under these circulars, which may have a material adverse effect
on our financial condition and results of operations.

 We
may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption laws, and any determination that we
violated these laws could have a material adverse effect on our business.

 We
are subject to the Foreign Corrupt Practice Act ("FCPA"), and other laws that prohibit improper payments or offers of payments
to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute, for the purpose
of obtaining or retaining business. We have operations, have agreements with third parties, and make most of our sales in China. The
PRC also strictly prohibits bribery of government officials. Our activities in China create the risk of unauthorized payments or offers
of payments by the employees, consultants, sales agents, or distributors of our subsidiaries, even though they may not always be subject
to our control. It is our policy to implement safeguards to discourage these practices by our employees. However, our existing safeguards
and any future improvements may prove to be less than effective, and the employees, consultants, sales agents, or distributors of our
subsidiaries may engage in conduct for which we might be held responsible. Violations of the FCPA or Chinese anti-corruption laws may
result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business,
operating results and financial condition. In addition, the U.S. government may seek to hold our subsidiaries liable for successor liability
FCPA violations committed by companies in which we invest or that we acquire.

 RISKS
RELATED TO OUR BUSINESS

 Our
independent auditors have expressed substantial doubt about our ability to continue as a going concern.

 Our
independent auditors have added an explanatory paragraph to their audit opinion issued in connection with our financial statements included
in this annual report which states that the financial statements were prepared assuming that we would continue as a going concern. As
discussed in Note 1 to the consolidated financial statements included herein, we had a working capital deficiency, accumulated deficit
from recurring net losses incurred for the prior years and significant short-term debt obligations maturing in less than one year as
of December 31, 2024. These conditions raise substantial doubt about our ability to continue as a going concern. We plan to improve
our profitability, renew our bank borrowings upon maturity and raise additional funds through bank borrowings and equity financing to
meet our daily cash demands. However, there can be no assurance that we will be successful in executing such plans or obtaining additional
equity or debt financing on acceptable terms. The audited consolidated financial statements included in this report do not include any
adjustments that might result from the outcome of this uncertainty.

 The
acquisition of a controlling Interest in Hitrans has not fully delivered the anticipated benefits, as its financial performance has fallen
short of initial expectations. However, it continues to provide strategic value, including market presence and potential synergies with
our existing operations. We remain focused on leveraging Hitrans's capabilities and exploring opportunities to enhance its contribution
to our overall business.

 We
consummated the acquisition of 81.56% of registered equity interests (representing 75.57% of paid-up capital) in Hitrans in November
2021. As of December 31, 2024, our ownership had reduced to 67.33% of registered equity interests (representing 72.99% of paid-up capital)
as a result of Hitrans's subsequent equity financings and our sale of certain equity interests in Hitrans. We have fully paid the
registered capital of Hitrans that we had subscribed for.

 Since
the acquisition, Hitrans's revenue has declined. For example, net revenue from sales of cathode materials and precursors decreased
from $71.4 million for the fiscal year ended December 31, 2023, to $40.0 million for the fiscal year ended December 31, 2024.

 Acquisitions
generally pose risks such as (i) the need to integrate and manage the businesses and products acquired with our own business and products;
(ii) additional demands on our resources, systems, procedures and controls; (iii) disruption of our ongoing business; (iv) potential
unknown or unquantifiable liabilities associated with the target company; and (v) diversion of management's attention from other
business concerns. This acquisition involved substantial investment of funds from our previous equity financings and resulted in one-time
charges and expenses. Given Hitrans's underperformance since the acquisition, we may not achieve the anticipated revenue, income,
or other returns, and the resources we have committed may not be available for other strategic opportunities. If we are unable to reverse
the declining performance of Hitrans or mitigate associated risks, our operating results could be negatively impacted.

 Additionally,
we have recognized impairment losses for long-lived assets of $0.5 million and $7.1 million for the years ended December 31, 2024 and
2023, respectively. Such impairment charges represented the excess of carrying amounts of long-lived assets over the estimated fair value
of the production facilities in Hitrans for the production of materials used in manufacturing of lithium batteries. We also recognized
impairment losses for goodwill of $1.6 million for the year ended December 31, 2022 due to the underperformance of the Hitrans segment.
 Any additional impairment of goodwill or other intangible assets acquired in connection with Hitrans's acquisition or in
another acquisition or charges to earnings associated with any acquisition or investment activity, may materially reduce our earnings.

 We
may face additional impairment charges if economic environments in which our businesses operate and key economic and business assumptions
substantially change.

 Assessment
of the potential impairment of property, plant and equipment and other identifiable intangible assets is an integral part of our normal
ongoing review of operations. Testing for potential impairment of long-lived assets is dependent on numerous assumptions and reflects
our best estimates at a particular point in time, which may vary from testing date to testing date. The economic environments in which
our businesses operate and key economic and business assumptions with respect to projected product selling prices and materials costs,
market growth and inflation rates, can significantly affect the outcome of impairment tests. Estimates based on these assumptions may
differ significantly from actual results. Changes in factors and assumptions used in assessing potential impairments can have a significant
impact on both the existence and magnitude of impairments, as well as the time at which such impairments are recognized. Future changes
in the economic environment and the economic outlook for the assets being evaluated could also result in impairment charges. Any significant
asset impairments would adversely impact our financial results.

 If
we cannot continue to develop new products in a timely manner, and at favorable margins, we may not be able to compete effectively.

 The
battery industry has been notable for the pace of innovations in product life, product design and applied technology. We have made, and
will continue to make, investments in research and development with the goal of further innovation. The successful development and introduction
of new products and line extensions face the uncertainty of customer acceptance and reaction from competitors, as well as the possibility
of cannibalization of sales of our existing products. In addition, our ability to create new products and line extensions and to sustain
existing products is affected by whether we can:

 develop and fund research
 and technological innovations;

 receive and maintain necessary
 intellectual property protections;

 obtain governmental approvals
 and registrations;

 comply with governmental
 regulations; and

 anticipate customer needs
 and preferences successfully.

 The
failure to develop and launch successful new products could hinder the growth of our business and any delay in the development or launch
of a new product could also compromise our competitive position. If competitors introduce new or enhanced products that significantly
outperform ours, or if they develop or apply manufacturing technology which permits them to manufacture at a significantly lower cost
relative to ours, we may be unable to compete successfully in the market segments affected by these changes.

 There
are inherent risks associated with new product development and our efforts to develop and market new products could fail.

 In
June 2020, our wholly-owned subsidiary, BAK Asia entered into a framework investment agreement with Gaochun EDZ. According to this agreement,
we intended to develop certain lithium battery projects which are expected to have a total production capacity of approximately 20 GWh
per year with support from Gaochun EDZ. See also " Item 1. Business—Expansion of Manufacturing Capabilities "
for additional information on our cooperation with Gaochun EDZ. We have put into operation two production lines of model 32140 large-sized
cylindrical "tabless" batteries with an actual production capacity of 1.3 GWh per year. Model 32140 batteries can be used
in light electric vehicles, electric vehicles and energy storage. We also announced in June 2023 that we had succeeded in mass-producing
Model 32140 sodium-ion cylindrical batteries, making us one of only a few companies in the world that have the capacity to mass produce
sodium-ion batteries. We are also in the process of establishing a new production line for larger-sized cylindrical batteries, including
Model 40135, while simultaneously advancing the development of next-generation products such as Model 46950.

 In
addition, we had been gradually phasing out our light electric vehicle business. In 2020, we ventured into developing light electric
vehicle projects. On November 9, 2020, we established our new subsidiary, Nanjing BFD, formally named Nanjing Daxin, to launch and develop
our light electric vehicle business. However, the development of this new line of business was not successful due to the competitive
landscape and evolving market preferences. Consequently, Nanjing BFD has shifted away from the development and manufacture of electric
bicycles, motorcycles and automotive spare parts and pivoted towards the manufacture of sodium-ion batteries since 2023. Jiangsu Daxin,
a subsidiary wholly-owned by Nanjing BFD, incorporated on August 4, 2021 and focused on the development and manufacture of electric bicycle,
motorcycle and automotive spare parts, was dissolved on December 22, 2023.

 We
cannot provide assurance that market acceptance of our new products will occur due to the highly competitive nature of the business,
or our future business ventures will not fail. The Company has operated and competed in industries where there are frequent introductions
of new products and line extensions and such product introductions often require significant investment and support. The ability of the
Company to understand end user needs and preferences is key to maintaining and improving the competitiveness of its product offerings.
The development and introduction of new products, as well as the renovation of current products and product lines, require substantial
and effective research, development and marketing expenditures, which the Company may be unable to recoup if the new or renovated products
do not gain widespread market acceptance. There are inherent risks associated with new product development and marketing efforts, including
product development or launch delays, product performance issues during development, changing regulatory frameworks that affect the new
products in development and the availability of key raw materials included in such products. These inherent risks could result in the
failure of new products and product line extensions to achieve anticipated levels of market acceptance, additional costs resulting from
failed product introductions and the Company not being first to market. As the Company continues to focus on innovation and renovation
of its products, the Company's business, financial condition or results of operations could be adversely affected in the event
that the Company is not able to effectively develop and introduce new or renovated products and line or brand extensions.

 Our
failure, if any, to keep up with rapid technological changes and evolving industry standards may cause our products to become obsolete
and less marketable, resulting in loss of market share to our competitors.

 The
lithium-based battery market, as well as the battery materials industry, are characterized by changing technologies and evolving industry
standards, which are difficult to predict. This, coupled with frequent introduction of new products and models, has shortened product
life cycles and may render our products obsolete or unmarketable. Our ability to adapt to evolving industry standards and anticipate
future standards will be a significant factor in maintaining and improving our competitive position and our prospects for growth. To
achieve this goal, we have invested and plan to continue investing significant financial resources in our R&D infrastructure. Currently,
we have facilities in Dalian, Nanjing and Shaoxing, China, which have about 404 R&D staffers and over 8,254 square meters of space
dedicated to R&D activities.

 R&D
activities, however, are inherently uncertain, and we might encounter practical difficulties in commercializing our research results.
Accordingly, our significant investment in our R&D infrastructure may not bear fruit. On the other hand, our competitors may improve
their technologies or even achieve technological breakthroughs that would render our products obsolete or less marketable. Therefore,
our failure to effectively keep up with rapid technological changes and evolving industry standards by introducing new and enhanced products
may cause us to lose our market share and to suffer a decrease in our revenue.

 Maintaining
our R&D activities and manufacturing operations requires significant capital expenditures, and our inability or failure to maintain
our operations could have a material adverse impact on our market share and ability to generate revenue.

 We
incurred capital expenditures of approximately $31.1 million and $17.2 million for the years ended December 31, 2023 and 2024, respectively.
We may incur significant additional capital expenditures as a result of unanticipated expenses, regulatory changes and other events that
impact our business. If we are unable or fail to timely obtain capital on acceptable terms and adequately maintain our manufacturing
capacity, we could lose customers and there could be a material adverse impact on our market share and our ability to generate revenue.

 We
face intense competition from other battery manufacturers and cathode material and precursor producers, many of which have significantly
greater resources.

 The
market for batteries used in electric vehicles and light electric vehicles is intensely competitive and is characterized by frequent
technological changes and evolving industry standards. We expect competition to become more intense. Increased competition may result
in declines in average selling prices, causing a decrease in gross profit margins. We have faced and will continue to face competition
from manufacturers of traditional rechargeable batteries, such as lead-acid batteries, other manufacturers of lithium-ion batteries and
companies engaged in the development of batteries incorporating new technologies. Other manufacturers of high-power lithium batteries
currently include Gotion Hi-tech, EVE Battery, Shandong Goldencell, EVPS and Power Long Battery.

 Many
of these existing competitors have greater financial, personnel, technical, manufacturing, marketing, sales and other resources than
we do. As a result, these competitors may be in a stronger position to respond quickly to market opportunities, new or emerging technologies
and evolving industry standards. Many of our competitors are developing a variety of battery technologies, such as lithium polymer, prismatic
cells, cylindrical cells and fuel cell batteries, which are expected to compete with our existing product lines. Other companies undertaking
R&D activities of solid-polymer lithium-ion batteries have developed prototypes and are constructing commercial scale production
facilities. It is possible that our competitors will be able to introduce new products with more desirable features than ours and their
new products will gain market acceptance. If our competitors successfully do so, we may not be able to maintain our competitive position
and our future success would be materially and adversely affected.

 The
market for cathode materials and precursors has been evolving rapidly. Rapid and ongoing changes in technology and product standards
could render our cathode materials and precursor products less competitive, or even obsolete, particularly if we fail to continue to
improve the performance of our cathode materials and precursor products. Competing technologies that outperform our cathode materials
and precursor products in one or more performance attributes could be developed and successfully introduced. We are aware of certain
companies, including Beijing Easpring Material Technology Co., Ltd. and Ningbo Ronbay Lithium Battery Material Co., Ltd. using cell chemistry
technology similar to our technology and these or other companies have introduced or could introduce products that compete directly with
our products and could in the future outperform our products in one or more performance attributes, could be offered to our customers
as a cheaper alternative to our products or may result in increased pricing pressure on our products.

 We
are dependent on a limited number of customers for a significant portion of our revenues and this dependence is likely to continue.

 We
have been dependent on a limited number of customers for a significant portion of our revenue. Our top five customers accounted for approximately
66.1% and 65.6% of our revenues for the years ended December 31, 2024 and 2023, respectively. Dependence on a few customers could make
it difficult to negotiate attractive prices for our products and could expose us to the risk of substantial losses if a single prominent
customer stops purchasing our products. We expect that a limited number of customers will continue to contribute a significant portion
of our sales in the near future. Our ability to maintain close relationships with these top customers is essential to the growth and
profitability of our business. If we fail to sell our products to one or more of these top customers in any particular period, or if
a large customer purchases fewer of our products, defers orders or fails to place additional orders with us, or if we fail to develop
additional major customers, our revenue could decline, and our results of operations could be adversely affected.

 In
addition to our own production, we also rely on a few battery suppliers to fulfill our customers' orders. If we fail to effectively
manage our relationships with, or lose the services of these suppliers and we cannot substitute suitable alternative suppliers, our operations
would be materially adversely affected.

 We
generate part of our revenues by outsourcing some of our customers' orders to other suppliers for certain battery models that we
do not produce. If our business relationship with these suppliers changes negatively or their financial condition deteriorates, or their
operating environment changes, our business may be harmed in many ways. Suppliers may also unilaterally terminate battery supply to us
or increase the prices. As a result, we are not assured of an uninterrupted supply of certain types of high-power lithium batteries of
acceptable quality or at acceptable prices from suppliers. On the other hand, we may not be able to substitute them with suitable alternative
contract manufacturers in a timely manner on commercially acceptable terms or at all. We may be forced to default on the agreements with
our customers. This may negatively impact our revenues and adversely affect our reputation and relationships with our customers, causing
a material adverse effect on our financial condition, results of operations and prospects.

 Failure
by us to maintain and strengthen relationships with certain contract battery material producer may materially adversely affect our ability
to fulfill customer orders and our results of operations.

 We
outsource the production of a portion of our battery material products to a third-party supplier in Xianyang city, Shaanxi province.
Our ability to meet the demands of our customers for battery material products would be affected, if our relationship with this supplier
changes negatively, or operations at this supplier are disrupted. This could negatively impact our revenues and adversely affect our
reputation and relationships with our customers, causing a material adverse effect on our financial condition, results of operations
and prospects.

 Our business depends on the growth in demand
for light electric vehicles, electric vehicles, energy storage, such as residential energy supply and UPS application, and other high-power
electric devices.

 As the demand for our battery cell and battery
materials is directly related to the market demand for high-power electric devices, a fast-growing high-power electric devices market
will be critical to the success of our business. In anticipation of an expected increase in the demand for high-power electric devices
such as electric vehicles, light electric vehicles, and energy storage including residential energy supply and UPS application in the
next few years, we are building new manufacturing facilities in Nanjing and have invested in the R&D capability of our newly acquired
battery materials business. However, the markets we have targeted, primarily those in the PRC, may not achieve the level of growth we
expect. If this market fails to achieve our expected level of growth, we may have excess production capacity and may not be able to generate
enough revenue to maintain our profitability.

 Our
success, in part, depends on the success of manufacturers of the end applications that use our products, and our failure to gain acceptance
of our products from such manufacturers could materially and adversely affect our results of operations and profitability.

 As
we target the battery markets for light electric vehicles, electric vehicles, energy storage including but not limited to residential
energy supply & UPS application, and other high-power electric devices, our future success in part depends on whether end-application
manufacturers are willing to use batteries that incorporate our products. To secure acceptance of our products, we must constantly develop
and introduce more reliable and cost-effective battery cells and battery materials with enhanced functionality to meet evolving industry
standards. We generated approximately $1.7 million revenues from electric vehicle customers in 2024. In 2024, our sales of cathode materials
and precursors reached $40.0 million. However, we cannot guarantee that the market demand for the cathode materials and precursors will
not decline.

 Even
if a manufacturer decides to use batteries that incorporate our products, the manufacturer may not be able to market and sell its products
successfully. The manufacturer's inability to market and sell its products successfully, whether from lack of market acceptance
or otherwise, could materially and adversely affect our business and prospects because this manufacturer may not order new products from
us. If we cannot achieve the expected level of sales, we will not be able to make sufficient profits to offset the expenditures we have
incurred to expand our production capacity or develop new technologies, nor will we be able to grow our business. Accordingly, our business,
financial condition, results of operations and future success would be materially and adversely affected.

 We
may not be able to accurately plan our production based on our sales contracts, which may result in excess product inventory or product
shortages.

 Our
sales contracts for battery cells typically provide for a non-binding, three-month forecast on the quantity of products that our customers
may purchase from us. Our sales contracts for battery materials typically provide for a non-binding, two-month forecast on the quantity
of products that our customers may purchase from us. We typically have only a 15-day to 30-day lead time to manufacture battery cell
products and 25-day lead time to produce battery material products to meet our customers' requirements once our customers place
orders with us. To meet the short delivery deadline, we generally make significant decisions on our production level and timing, procurement,
facility requirements, personnel needs and other resources requirements based on our estimate in light of this forecast, our past dealings
with such customers, market conditions and other relevant factors. Our customers' final purchase orders may not be consistent with
our estimates. If the final purchase orders substantially differ from our estimates, we may have excess product inventory or product
shortages. Excess product inventory could result in unprofitable sales or write-offs as our products are susceptible to obsolescence
and price declines. Producing additional products to make up for any product shortages within a short time frame may be difficult, making
us unable to fill out the purchase orders. In either case, our results of operation would fluctuate from period to period.

 A
change in our product mix may cause our results of operations to differ substantially from the anticipated results in any particular
period.

 Our
overall profitability may not meet expectations if our products, customers or geographic mix are substantially different than anticipated.
Our profit margins vary among products, customers and geographic markets. Consequently, if our mix of any of these is substantially different
from what is anticipated in any particular period, our profitability could be lower than anticipated.

 Manufacturing
or use of our products may cause accidents, which could result in significant production interruption, delay or claims for substantial
damages.

 Due
to the high energy density inherent in lithium-based batteries, our batteries can pose certain safety risks, including the risk of fire.
Although we incorporate safety procedures in the research, development, manufacture and transportation of batteries that are designed
to minimize safety risks, the manufacture or use of our products may still cause accidents. Any accident, whether occurring at the manufacturing
facilities or from the use of our products, may result in significant production interruption, delays or claims for substantial damages
caused by personal injuries or property damages.

 We
may not be able to substantially increase our manufacturing output in order to maintain our cost competitiveness.

 We
believe that our ability to offer products at lower costs – leveraging economies of scale from fully operational production lines—while
maintaining prices above the market average has been a key driver of o our past success and will be vital to our future growth. We believe
this is one of our competitive advantages over our competitors. We need to increase our manufacturing output to a level that will enable
us to substantially reduce the cost of our products on a per unit basis through economies of scale. However, our ability to substantially
increase our manufacturing output is subject to significant constraints and uncertainties, including:

 the need to raise significant
 additional funds to purchase and prepay raw materials or to build additional manufacturing facilities, which we may be unable to
 obtain on reasonable terms or at all;

 delays and cost overruns
 as a result of a number of factors, many of which may be beyond our control, such as increases in raw material prices and problems
 with equipment vendors;

 delays or denial of required
 approvals by relevant government authorities;

 diversion of significant
 management attention and other resources; and

 failure to execute our
 expansion plan effectively.

 If
we are unable to increase our manufacturing output because of any of the risks described above, we may be unable to maintain our competitive
position or achieve the growth we expect. Moreover, even if we expand our manufacturing output, we may not be able to generate sufficient
customer demand for our products to support our increased production output.

 We
may incur significant costs because of the warranties we supply with our battery cell products.

 With
respect to the sale of our battery products, we typically offer warranties against any defects due to product malfunction or workmanship
for a period of six months-to-five years from the date of purchase, including a period of six to twenty-four months for battery cells,
and a period of twelve to twenty-seven months for battery modules for electric bicycles, and a period of three years to five years (or
120,000 or 200,000 km if reached sooner) for battery modules for electric vehicles. We provide a reserve for these potential warranty
expenses, which is based on an analysis of historical warranty issues. There is no assurance that future warranty claims will be consistent
with past history, and in the event that we experience a significant increase in warranty claims, there is no assurance that our reserves
will be sufficient. This could have a material adverse effect on our business, financial condition and results of operations.

 We
do not have product liability insurance for claims against our product quality. Defects in our products could result in a loss of customers
and decrease in revenue, unexpected expenses and a loss of market share.

 We
have not purchased product liability insurance to provide against any claims against us based on our product quality. As a result, defects
in our products could result in a loss of customers and decrease in revenue, unexpected expenses and a loss of market share, and any
of our products are found to have reliability, quality or compatibility problems, we will be required to accept returns, provide replacements,
provide refunds, or pay damages. We may be required to incur substantial amounts to indemnify our customers in respect of their product
quality claims against us, which would materially and adversely affect the results of our operations and severely damage our reputation.

 We
do not have insurance coverage against all the damages or losses of our facilities.

 We
currently have insurance coverage for certain machinery and equipment and buildings located at our facilities in Dalian. We are discussing
with multiple insurance service providers aiming to secure comprehensive insurance coverage for the remaining properties. If we were
to suffer any losses or damages to any of the facilities before the purchase of insurance policies that provide adequate coverage, our
business, financial condition and results of operations may be materially and adversely affected. In addition, our subsidiary, Hitrans,
maintains property insurance coverage against certain property and inventory damages and losses.

 However,
such insurance may not adequately compensate us for any such losses and will not address a loss of customers as a result of property
damages and consequent disruptions to operations or may have large deductibles insufficient to support our continuing operations. If
damages or losses exceed the insurance coverage, we may not be able to return to operation for an extended period of time, potentially
even threatening our viability. In addition, insurance coverage is expensive, may be difficult to obtain and may not be available in
the future on acceptable terms or at all. A significant increase in the cost of insurance coverage could adversely affect our business,
financial condition and results of operations.

 We
depend on third parties to supply key raw materials and components to us. Failure to obtain a sufficient supply of these raw materials
and components in a timely fashion and at reasonable costs could significantly delay our production and shipments, which would cause
us to breach our sales contracts with our customers.

 We
purchase from Chinese domestic suppliers for certain key raw materials and components such as electrolytes, electrode materials and separators
for our battery cell products and purchase from Chinese domestic suppliers for graphite, iron phosphate and lithium phosphate. We have
purchased raw materials and components on the basis of purchase orders. In the absence of firm and long-term contracts, we may not be
able to obtain a sufficient supply of these raw materials and components from our existing suppliers or alternates in a timely fashion
or at a reasonable cost. If we fail to secure a sufficient supply of key raw materials and components in a timely fashion, it would result
in a significant delay in our production and shipments, which may cause us to breach our sales contracts with our customers. Furthermore,
failure to obtain sufficient supply of these raw materials and components at a reasonable cost could also harm our revenue and gross
profit margins.

 Fluctuations
in prices and availability of raw materials, particularly Ni, Co, Mn, Li2CO3, LiPF6 and LiFePO4, could increase our costs or cause delays
in shipments, which would adversely impact our business and results of operations.

 Our
operating results could be adversely affected by increases in the cost of raw materials, particularly Ni, Co, Mn, Li2CO3, LiPF6 and LiFePO4,
the primary cost component of our battery products, battery material products or other product parts or components. The prices of Ni,
Co, Mn, Li2CO3, LiPF6 and LiFePO4 are not stable.

 Although
we are not dependent on single suppliers for the supply of any raw materials, we mostly purchase raw materials through individual purchase
orders or short-term contracts and not pursuant to long-term contracts. As such, our third-party suppliers may not be able to satisfy
our requirements during a period of sustained or growing demand.

 In
addition, our battery cell products historically have not been able to fully offset the effects of higher costs of raw materials through
price increases to customers or by way of productivity improvements. As a result, a significant increase in the price of one or more
raw materials, parts or components or the inability to successfully implement price increases/surcharges to mitigate such cost increases
could have a material adverse effect on our results of operations.

 We
do not have long-term purchase commitments from our customers, which may result in significant uncertainties and volatility with respect
to our revenue from period to period.

 We
do not have long-term purchase commitments from our customers and the term of our sales contracts with our customers is typically one
year or less. Furthermore, these contracts leave certain major terms such as price and quantity of products open to be determined in
each purchase order. These contracts also allow parties to re-adjust the contract price for substantial changes in market conditions.
As a result, if our customers hold stronger bargaining power than us or the market conditions are in their favor, we may not be able
to enjoy the price downside protection or upside gain. Furthermore, our customers may decide not to continue placing purchase orders
with us in the future at the same level as in prior periods. As a result, our results of operations may vary from period to period and
may fluctuate significantly in the future.

 Compliance
with environmental regulations can be expensive, and our failure to comply with these regulations may result in adverse publicity and
a material adverse effect on our business.

 As
a manufacturer, we are subject to various PRC environmental laws and regulations on air emission, wastewater discharge, solid waste and
noise. Although we believe that our operations are in substantial compliance with current environmental laws and regulations, we may
not be able to comply with these regulations at all times as the PRC environmental legal regime is evolving and becoming more stringent.
Therefore, if the PRC government imposes more stringent regulations in the future, we will have to incur additional substantial costs
and expenses in order to comply with new regulations, which may negatively affect our results of operations. If we fail to comply with
any of the present or future environmental regulations in material aspects, we may suffer from negative publicity and may be required
to pay substantial fines, suspend or even cease operations. Failure to comply with PRC environmental laws and regulations may materially
and adversely affect our business, financial condition and results of operations.

 We
rely significantly on technology and systems to support our production, supply chain, payments, financial reporting and other key aspects
of our business. Any failure, inadequacy, interruption or security failure of those systems could have a material adverse effect on our
business, reputation and brand, financial condition, and results of operations.

 The
satisfactory performance, reliability and availability of our technology systems are critical to our business. A failure or malfunction
of our information technology system can result in substantial losses, damage and harm to our business, operations or brand. To manage
our operations and personnel, we will need to continue to improve and expand our operational and financial systems, transaction processing
and internal controls and business processes; in doing so, we could encounter transitional issues and incur substantial additional expenses.
The failure of our information systems to operate effectively, problems with transitioning to upgraded or replacement systems or expanding
them, or a breach in security of these systems, could materially adversely affect the promptness and accuracy of our manufacturing process,
products delivery, transaction processing, financial accounting and reporting, the efficiency of our operations and our ability to properly
forecast earnings and cash requirements. We could be required to make significant additional expenditures to remediate any such failure,
problem or breach. Any such events could have a material adverse effect on our business, financial condition, and results of operations.

 Further,
we house a portion of our systems offsite at third-party data centers. Our data centers may be subject to cyber-attacks or other technology-related
incidents, and also break-ins, sabotage and intentional acts of vandalism that could cause disruptions in our ability to serve our customers
and protect data. Some of our systems are not fully redundant, and our disaster recovery planning cannot account for all eventualities.
The occurrence of a natural disaster, intentional sabotage or other anticipated problems could result in lengthy interruptions to our
operations. Any errors or vulnerability in our systems or damage to or failure of our systems, or a third-party data center hosting our
data, could result in interruptions in our operations and could have a material adverse effect on our business, financial condition,
and results of operations.

 In
addition, we may now and in the future implement new systems to increase efficiency and profitability. We may encounter transitional
issues and incur substantial additional expenses in connection with any implementation or change to existing processes, any of which
could have a material adverse effect on our business, financial condition, and results of operations.

 System
security risk issues, and disruption of our internal operations or information technology systems, could have a material adverse effect
on our business, financial condition, and results of operations.

 External
parties, such as experienced computer programmers and hackers, or even internal users (including both employees and non-employees with
authorized access), may be able to penetrate or create systems disruptions or cause shutdowns of our networks, systems and applications
or those of third-party vendors. We collect and store identifiable information about our employees, customers and others, and sometimes
rely upon third-party service providers to maintain or process data on our behalf and to provide security for the information in their
possession. Such compromise of such information could subject us to governmental investigations and/or enforcement actions, fines and
penalties, litigation, claims and other liabilities, and harm our reputation, which could have a material adverse effect on our business,
financial condition and results of operations. Moreover, we could incur significant expenses or disruptions of our operations in connection
with system failures, timeliness of applying updates to vulnerable systems or other factors within or beyond our control. Such failures
or breaches in our information systems could also result in the disclosure, misappropriation or misuse of or unauthorized access to our
confidential, proprietary, or personal information, disruption of our operations or damage to our networks and systems. An increasing
number of companies have recently disclosed breaches of their security, some of which have involved increasingly sophisticated and highly
targeted attacks on portions of their sites.

 Although
we take steps to protect our networks, systems, applications and data, we or our service providers may be unable to anticipate, defend
against, or timely identify and respond to such activity, including but not limited to hacking, malware, viruses, social engineering
(such as phishing or other scams), extortion, account takeover attacks, denial or degradation of service attacks, supply chain attacks,
computer and network vulnerabilities or the negligence and malfeasance of individuals with authorized access to our data. In addition,
sophisticated hardware and operating system software and applications that we buy or license from third parties may contain defects in
design or manufacture, including "bugs" and other problems that could unexpectedly interfere with the security and operation
of the systems. The costs to us to eliminate or alleviate security problems, viruses and bugs, or any problems associated with the outsourced
services provided to us, could be significant, and efforts to address these problems could result in interruptions, delays or cessation
of service that may impede our production, supply chain, sales, financial reporting or other critical functions and have a material adverse
effect on our business, financial condition and results of operations.

 In
addition, the Chinese government and governments in other jurisdictions have enacted laws or regulations that require companies to notify
individuals about certain types of security incidents or breaches, and any such disclosures may lead to negative publicity. It is also
possible that security breaches affecting our competitors or others in our industry could also result in negative publicity that indirectly
harms our reputation. Increasing public, industry, and governmental focus on privacy and data security may continue to lead to additional
guidance or legislative and regulatory action. As a result, we may have to modify our business systems and practices with the goal of
further improving data security, which could result in reduced net revenue, increased expenditures and operating complexity. Any compromise
of our security or security breach could result in a violation of applicable privacy and other laws, significant legal and financial
exposure or damage to our reputation, which could have a material adverse effect on our business, financial condition, and results of
operations.

 We
currently do not carry insurance to cover any potential claims or expenses related to security breaches that affect us.
 In addition, we cannot assure investors that the limitations on liability in our contracts would be enforceable
or adequate or would otherwise protect us from any such liabilities with respect to any particular claim. Any imposition of liability
that is not covered by insurance would increase our operating expenses and reduce our net income, if any, or increase our net loss.

 The
use of technology based on artificial intelligence presents risks relating to confidentiality, creation of inaccurate and flawed outputs
and emerging regulatory risk, any or all of which may adversely affect our business and results of operations.

 As
with many technological innovations, artificial intelligence ("AI") presents great promise but also risks and challenges
that could adversely affect our business. Sensitive, proprietary, or confidential information of the Company and employees, could be
leaked, disclosed, or revealed as a result of or in connection with the use of generative AI technologies by our employees or vendors.
Any such information input into a third-party generative AI or machine learning platform could be revealed to others, including if information
is used to train the third party's generative AI or machine learning models. Additionally, where a generative AI or machine learning
model ingests personal information and makes connections using such data, those technologies may reveal other sensitive, proprietary,
or confidential information generated by the model. Moreover, generative AI or machine learning models may create incomplete, inaccurate,
or otherwise flawed outputs, some of which may appear correct. Due to these issues, these models could lead us to make flawed decisions
that could result in adverse consequences to us, including exposure to reputational and competitive harm, customer loss, and legal liability.
In addition, uncertainty in the legal regulatory regime relating to AI may require significant resources to modify and maintain business
practices to comply with applicable law, the nature of which cannot be determined at this time. Several jurisdictions have already proposed
or enacted laws governing AI. These obligations may prevent or limit our ability to use AI in our business, lead to regulatory fines
or penalties, or require us to change our business practices. If we cannot use AI, or that use is restricted, our business may be less
efficient, or we may be at a competitive disadvantage. Any of these factors could adversely affect our business, financial condition,
and results of operations.

 We
face risks associated with the marketing, distribution and sale of our products internationally, and if we are unable to effectively
manage these risks, they could impair our ability to expand our business abroad.

 For
the years ended December 31, 2024 and 2023, we derived 44% and 42%, respectively, of our sales from outside the PRC mainland. We deem
overseas market as an important revenue source for us, and have been actively pursuing opportunities to expand our customer base overseas.
The marketing, international distribution and sale of our products expose us to a number of risks, including:

 fluctuations in currency
 exchange rates;

 difficulty in engaging
 and retaining distributors that are knowledgeable about, and can function effectively in, overseas markets;

 increased costs associated
 with maintaining marketing efforts in various countries;

 difficulty and cost relating
 to compliance with the different commercial and legal requirements of the overseas markets in which we offer our products;

 inability to obtain, maintain
 or enforce intellectual property rights; and

 trade barriers such as
 export requirements, tariffs, taxes and other restrictions and expenses, which could increase the prices of our products and make
 us less competitive in some countries.

 Our
business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely
disrupted if we lose their services.

 Our
future success heavily depends on the continued service of our senior executives and other key employees. In particular, we rely on the
expertise and experience of our Chief Executive Officer, Mr. Zhiguang Hu and our Chief Financial Officer, Mr. Jiewei Li. If one or more
of our other senior executives are unable or unwilling to continue to work for us in their present positions, we may encounter similar
problems, but on a compounded basis. Moreover, if any of our current or former senior executives joins a competitor or forms a competing
company, we may lose customers, suppliers, know-how and key personnel. Each of our executive officers has entered into an employment
agreement with us, which contains non-competition and confidentiality clauses. However, if any dispute arises between our current or
former executive officers and the Company, it is hard to predict the extent to which any of these agreements could be enforced in China,
where these executive officers reside, in light of the uncertainties with China's legal system.

 The
success of our business depends on our ability to attract, train and retain highly skilled employees and key personnel.

 Because
of the highly specialized, technical nature of our business, we must attract, train and retain a sizable workforce comprising highly
skilled employees and other key personnel. Since our industry is characterized by high demand and intense competition for talent, we
may have to pay higher salaries and wages and provide greater benefits in order to attract and retain highly skilled employees or other
key personnel that we will need to achieve our strategic objectives. Our ability to train and integrate new employees into our operations
may not meet the requirements of our growing business. Our failure to attract, train or retain highly skilled employees and other key
personnel in numbers that are sufficient to satisfy our needs would materially and adversely affect our business.

 We
have experienced significant management changes which could increase our control risks and have a material adverse effect on our ability
to do business and our results of operations.

 Since
2019, we have had a number of changes in our senior management, including multiple changes in our Chief Financial Officer. The magnitude
of these past and potential changes and the short time interval in which they have occurred or may occur, particularly during a time
of economic or financial crisis, add to the risks of control failures, including a failure in the effective operation of our internal
control over financial reporting or our disclosure controls and procedures. Control failures could result in material adverse effects
on our financial condition and results of operations. It may take time for the new management team to become sufficiently familiar with
our business and each other to effectively develop and implement our business strategies. The turnover of key management positions could
further harm our financial performance and results of operations. Management attention may be diverted from regular business concerns
by reorganizations.

 We
and our independent public accounting firm identified material weaknesses in our internal control over financial reporting as of December
31, 2024. If we fail to remediate the material weaknesses, we may be unable to accurately report our financial results
or prevent fraud, and investor confidence and the market price of our shares may be adversely affected.

 To
implement Section 404 of the Sarbanes-Oxley Act of 2002, or SOX 404, the SEC adopted rules requiring public companies to include a report
of management on the company's internal control over financial reporting in their annual reports on Form 10-K. A report of our
management is included under Item 9A of this annual report. In addition, as we became an "accelerated filer" in 2023, our
independent registered public accounting firm is required to attest to and report on the effectiveness of our internal control over financial
reporting. Our management has identified the following material weaknesses in our internal control over financial reporting: (i)
we did not have appropriate policies and procedures in place to evaluate the proper accounting and disclosures of key documents and agreements,
and (ii) we do not have sufficient and skilled accounting personnel with an appropriate level of technical accounting knowledge and experience
in the application of accounting principles generally accepted in the United States commensurate with our financial reporting requirements.
A "material weakness" is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such
that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will
not be prevented or detected on a timely basis. We have taken measures and plan to continue to take measures to remedy the material weaknesses.
We have regularly offered our financial personnel trainings on internal control and risk management, and we have regularly provided trainings
to our financial personnel on U.S. GAAP accounting guidelines. However, the implementation of these measures may not fully address the
material weaknesses in our internal control over financial reporting. Our failure to address any control deficiency could result in inaccuracies
in our financial statements and could also impair our ability to comply with applicable financial reporting requirements and related
regulatory filings on a timely basis. Moreover, effective internal control over financial reporting is important to prevent fraud. As
a result, our business, financial condition, results of operations and prospects, as well as the trading price of our shares, may be
adversely affected.

 Our
business has been and may continue to be adversely affected by the outbreaks of viruses or other health epidemics and outbreaks.

 Our
business could be materially and adversely affected by the outbreak of a widespread health epidemic, such as COVID-19, avian flu or African
swine flu. For instance, in response to COVID-19 China imposed widespread lockdowns, closure of workplaces and restrictions on mobility
and travel to contain the spread of the virus. In early 2022, a wave of infections caused by the Omicron variant emerged in Shanghai,
and a series of restrictions and quarantines were implemented in Shanghai and other regions to contain the spread. Our manufacturing
facilities did not produce at full capacity when restrictive measures were in force for the areas where our manufacturing operations
were located during 2022. Especially, our manufacturing operations, among others, cannot be conducted remotely and often require on-site
access to materials and equipment.

 The
possible health epidemics and outbreaks could have a material adverse impact on our or our customers' business operations including
reduction or suspension of operations in China, the U.S. or certain parts of the world. Given the general slowdown in economic conditions
globally, volatility in the capital markets as well as the general negative impact of the health concerns arising from outbreaks of viruses
or other illnesses on the global market, we cannot assure you that we will be able to maintain the growth rate we have experienced or
projected.

 RISKS
RELATED TO COMMON STOCK

 Numerous
factors, many of which are beyond our control, may cause the market price of common stock to fluctuate significantly.

 There
are numerous factors, many of which are beyond our control, may cause the market price of common stock of CBAK Energy Technology, Inc.
to fluctuate significantly. These factors include:

 our earnings releases,
 actual or anticipated changes in our earnings, fluctuations in our operating results or our failure to meet the expectations of financial
 market analysts and investors;

 changes in financial estimates
 by us or by any securities analysts who might cover the common stock;

 speculation about our business
 in the press or the investment community;

 significant developments
 relating to our relationships with our customers or suppliers;

 stock market price and
 volume fluctuations of other publicly traded companies and, in particular, those that are in our industries;

 customer demand for our
 products;

 investor perceptions of
 our industry in general and our company in particular;

 the operating and stock
 performance of comparable companies;

 general economic conditions
 and trends;

 major catastrophic events;

 announcements by us or
 our competitors of new products, significant acquisitions, strategic partnerships or divestitures;

 changes in accounting standards,
 policies, guidance, interpretation or principles;

 loss of external funding sources;

 sales of our shares, including sales by our directors,
 officers or significant shareholders; and

 additions or departures of key personnel.

 In
the past, shareholders of a public company often brought securities class action suits against the company following periods of instability
in the market price of that company's securities. If we were involved in a class action suit, it could divert a significant amount
of our management's attention and other resources from our business and operations, which could harm our results of operations
and require us to incur significant expenses to defend the suit. Any such class action suit, whether or not successful, could harm our
reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be
required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.

 Techniques
employed by short sellers may drive down the market price of the common stock of CBAK Energy Technology, Inc.

 Short
selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention
of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value
of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects
to pay less in that purchase than it received in the sale. As it is in the short seller's interest for the price of the security
to decline, many short sellers publish, or arrange for the publication of, negative opinions regarding the relevant issuer and its business
prospects in order to create negative market momentum and generate profits for themselves after selling a security short. These short
attacks have, in the past, led to selling of shares in the market.

 Public
companies that have substantially all of their operations in China have been the subject of short selling. Much of the scrutiny and negative
publicity has centered on allegations of a lack of effective internal control over financial reporting resulting in financial and accounting
irregularities and mistakes, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations
of fraud. As a result, a number of targets of such efforts are now conducting internal and external investigations into the allegations
and, in the interim, are subject to shareholder lawsuits and/or SEC enforcement actions.

 We
were the subject of certain unfavorable allegations. Although we believe such allegations are untrue, inaccurate or inflated, we have
expended resources to investigate such allegations and defend ourselves and we may need to expend more resources in connection with these
or other allegations in the future, which could be costly and time-consuming and could distract our management from growing our business.
The allegations against us may severely impact our stock price and disrupt our business operations. Any investment in the common stock
of CBAK Energy Technology, Inc. could be greatly reduced or even rendered worthless due to such allegations.

 If
we fail to comply with the continued listing requirements of Nasdaq, we would face possible delisting, which would result in a limited
public market for shares of CBAK Energy Technology, Inc. and make obtaining future debt or equity financing more difficult for us.

 CBAK
Energy Technology, Inc.'s common stock is traded and listed on the Nasdaq under the symbol "CBAT", which was changed
from "CBAK" on November 30, 2018. The common stock may be delisted if we fail to maintain certain Nasdaq listing requirements.

 On
December 26, 2024, we received notice from the Listing Qualifications Department of Nasdaq indicating that, for the preceding 30 consecutive
business days, the bid price for the common stock had closed below the minimum $1.00 per share and as a result, CBAK Energy Technology,
Inc. was no longer in compliance with the Nasdaq Listing Rule 5550(a)(2). We have a compliance period of 180 calendar days, or until
June 24, 2025 (the "Compliance Period"), to regain compliance with Nasdaq's minimum bid price requirement. If at any
time during the Compliance Period, the closing bid price per share of the Company's common stock is at least $1.00 for a minimum
of 10 consecutive business days, Nasdaq will provide the Company a written confirmation of compliance and the matter will be closed.

 We
cannot assure you that CBAK Energy Technology, Inc. will cure the bid price deficiency before the expiration of the Compliance Period
or continue to comply with other requirements for continued listing on the Nasdaq in the future. If the common stock loses its status
on the Nasdaq, the common stock would likely trade in the over-the-counter market. If our shares were to trade on the over-the-counter
market, selling the common stock could be more difficult because smaller quantities of shares would likely be bought and sold, transactions
could be delayed, and security analysts' coverage of us may be reduced. In addition, in the event the common stock is delisted,
broker-dealers have certain regulatory burdens imposed upon them, which may discourage broker-dealers from effecting transactions in
the common stock, further limiting the liquidity of the common stock. These factors could result in lower prices and larger spreads in
the bid and ask prices for the common stock. Such delisting from the Nasdaq and continued or further declines in our share price could
also greatly impair our ability to raise additional necessary capital through equity or debt financing and could significantly increase
the ownership dilution to shareholders caused by our issuing equity in financing or other transactions.

 If
we become directly subject to the scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to
expend significant resources to investigate and resolve the matter which could harm our business operations, stock price and reputation
and could result in a loss of your investment in our stock, especially if such matter cannot be addressed and resolved favorably.

 U.S.
public companies that have substantially all of their operations in China, particularly companies like us which have completed so-called
reverse merger transactions, have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators
and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative publicity has centered around financial and accounting
irregularities and mistakes, a lack of effective internal controls over financial accounting, inadequate corporate governance policies
or a lack of adherence thereto and, in many cases, allegations of fraud. As a result of the scrutiny, criticism and negative publicity,
the publicly traded stock of many U.S. listed Chinese companies has sharply decreased in value and, in some cases, has become virtually
worthless. Many of these companies have also been subject to shareholder lawsuits and SEC enforcement actions, and have been conducting
internal and external investigations into the allegations. If we become the subject of any unfavorable allegations, whether such allegations
are proven to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend our company.
This situation will be costly and time consuming and distract our management from growing our company. If such allegations are not proven
to be groundless, our company and business operations will be severely and your investment in our stock could be rendered worthless.

 The
disclosures in our reports and other filings with the SEC and our other public pronouncements are not subject to the scrutiny of any
regulatory bodies in the PRC. Accordingly, our public disclosure should be reviewed in light of the fact that no governmental agency
that is located in China where substantially all of our operations and business are located have conducted any due diligence on our operations
or reviewed or cleared any of our disclosures.

 We
are regulated by the SEC and our reports and other filings with the SEC are subject to SEC review in accordance with the rules and regulations
promulgated by the SEC under the Securities Act and the Exchange Act. Unlike public reporting companies whose operations are located
primarily in the United States, however, substantially all of our operations are located in China. Since substantially all of our operations
and business take place in China, it may be more difficult for the Staff of the SEC to overcome the geographic and cultural obstacles
that are present when reviewing our disclosures. These same obstacles are not present for similar companies whose operations or business
take place entirely or primarily in the United States. Furthermore, our SEC reports and other disclosures and public pronouncements are
not subject to the review or scrutiny of any PRC regulatory authority. For example, the disclosure in our SEC reports and other filings
are not subject to the review of China Securities Regulatory Commission, a PRC regulator that is tasked with oversight of the capital
markets in China. Accordingly, you should review our SEC reports, filings and our other public pronouncements with the understanding
that no local regulator has done any due diligence on our company and with the understanding that none of our SEC reports, other filings
or any of our other public pronouncements has been reviewed or otherwise been scrutinized by any local regulator.

 Our directors and executive officers, collectively,
own approximately 13.17% of outstanding common stock of CBAK Energy Technology, Inc. and may possess significant influence in or control
over our management and affairs.

 Mr. Yunfei Li, chairman of our board, and our other
executive officers and directors beneficially own an aggregate of 13.17% of outstanding common stock of CBAK Energy Technology, Inc. as
of December 31, 2024. As a result, our directors and executive officers, acting together, may have significant influence in or control
over our management and affairs, including the election of directors and approval of significant corporate transactions, such as mergers,
consolidation, and sale of all or substantially all of our assets. Consequently, this concentration of ownership may have the effect of
delaying or preventing a change of control, including a merger, consolidation or other business combination involving us, even if such
a change of control would benefit our stockholders.

 GENERAL
RISK FACTORS

 We
may be exposed to infringement or misappropriation claims by third parties, which, if determined adversely to us, could cause our loss
of significant rights and inability to continue providing our existing product offerings.

 Our
success also depends largely on our ability to use and develop our technology and know-how without infringing the intellectual property
rights of third parties. The validity and scope of claims relating to lithium-ion battery technology patents involve complex scientific,
legal and factual questions and analysis and, therefore, may be highly expensive and time-consuming. If there is a successful claim of
infringement against us, we may be required to pay substantial damages to the party claiming infringement, develop non-infringing technologies
or enter into royalty or license agreements that may not be available on acceptable terms, if at all. Our failure to develop non-infringing
technologies or license the proprietary rights on a timely basis would harm our business. Protracted litigation could result in our customers,
or potential customers, deferring or limiting their purchase or use of our products until resolution of such litigation. Parties making
the infringement claim may also obtain an injunction that can prevent us from selling our products or using technology that contains
the allegedly infringing contents. Any intellectual property litigation could have a material adverse effect on our business, results
of operation and financial condition.

 Adverse
developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance
by financial institutions or transactional counterparties, could adversely affect our current and projected business operations and our
financial condition and results of operations.

 Actual
events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional
counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors
about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.
For example, on March 10, 2023, Silicon Valley Bank failed and was taken into receivership by the U.S. Federal Deposit Insurance Corporation
(the "FDIC"); on March 12, 2023, Signature Bank and Silvergate Capital Corp. were each swept into receivership; the following
week, a syndicate of U.S. banks infused $30 billion in First Republic Bank; and later that same week, the Swiss Central Bank provided
$54 billion in covered loan and short-term liquidity facilities to Credit Suisse Group AG, all in an attempt to reassure depositors and
calm fears of a banking contagion. Our ability to effectively run our business could be adversely affected by general conditions in the
global economy and in the financial services industry.

 Although
the U.S. Department of Treasury, FDIC and Federal Reserve Board have announced a program to provide up to $25 billion of loans to financial
institutions secured by certain of such government securities held by financial institutions to mitigate the risk of potential losses
on the sale of government securities with interest rates below current market interest rates, widespread demands for customer withdrawals
or other liquidity needs of financial institutions for immediately liquidity may exceed the capacity of such program. Additionally, there
is no guarantee that the U.S. Department of Treasury, FDIC and Federal Reserve Board will provide access to uninsured funds in the future
in the event of the closure of other banks or financial institutions, or that they would do so in a timely fashion.

 Various
macroeconomic factors could adversely affect our business, including fears concerning the banking sector, changes in inflation, interest
rates and overall economic conditions and uncertainties. A severe or prolonged economic downturn could result in a variety of risks,
including our ability to raise additional funding on a timely basis or on acceptable terms. A weak or declining economy could also impact
third parties upon whom we depend to run our business. Increasing concerns over bank failures and bailouts and their potential broader
effects and potential systemic risk on the global banking sector generally and its participants may adversely affect our access to capital
and our business and operations more generally.

 Currently,
we do not have a business relationship with any of the banking institutions mentioned above, and our cash, cash equivalents and short
term investments that are mostly concentrated in China have been unaffected by the turmoil in the financial industry in the US and Europe;
however, we cannot guarantee that the banking institution with which we do business will not face similar circumstances in the future,
or that the third parties with whom we do business will not be negatively affected by such circumstances.

 ITEM
1B. UNRESOLVED STAFF COMMENTS.

 Not applicable.

 ITEM
1C. CYBERSECURITY

 We
have taken a multifaceted approach to addressing cybersecurity risks, including leadership from our senior management and Board of Directors,
direct supervision and operational execution from our information technology ("IT") department and active involvement of
employees. The Company's senior management devotes significant resources to cybersecurity and risk management processes to adapt
to the changing cybersecurity landscape and respond to emerging threats. We periodically assess the threat landscape and take a holistic
view of cybersecurity risks, with a layered cybersecurity strategy based on prevention, detection and mitigation. Our IT team reviews
cybersecurity risks, and we have a set of Company-wide policies and procedures concerning cybersecurity matters, including policies related
to encryption standards, remote access, multi factor authentication, confidential information, the use of the internet, social media,
email and wireless devices and incident response.

 The
Company's Chief Executive Officer is responsible for developing and implementing our information security measures and overseeing
our IT department. The Company has established a physical firewall, with physical gateways that filter suspicious files and data flows
entering and exiting our Company's network. In addition, the computers in our R&D department are equipped with behavior control
software, which makes emails and files sent from the R&D computers in an encrypted state and inaccessible without specific authorization
from designated supervisors.

 The
Company's IT department is directly responsible for cybersecurity matters and routinely reports to the senior management. In the
event of a cybersecurity incident, the IT department will initially report to the Company's senior management, including our Chief
Executive Officer. If the incident is assessed as a material threat or incident to our information systems, our senior management will
escalate the issue to the Board of Directors. Given that our core operations are in manufacturing and involve limited network-related
activities, we believe that our existing cybersecurity measures are adequate. The Company's Board of Directors and senior management
are committed to continuously evaluating and upgrading our cybersecurity prevention, detection, and mitigation strategies in line with
the evolution of our business needs and cybersecurity risks.

 In
the fiscal year ended December 31, 2024, we did not identify any cybersecurity threats that have materially affected or are reasonably
likely to materially affect our business strategy, results of operations or financial condition. However, despite our efforts, we cannot
eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced undetected cybersecurity incidents.
For additional information about these risks, see " Risks Related to Our Business—We rely significantly on technology and
systems to support our production, supply chain, payments, financial reporting and other key aspects of our business. Any failure, inadequacy,
interruption or security failure of those systems could have a material adverse effect on our business, reputation and brand, financial
condition, and results of operations " and " Risks Related to Our Business—System security risk issues, and disruption
of our internal operations or information technology systems, could have a material adverse effect on our business, financial condition,
and results of operations " in Item 1A-Risk Factors.

 ITEM
2. PROPERTIES.

 We
have completed the construction of the facilities in our Dalian site with a total area of 72,809 square meters comprising manufacturing
facilities, warehousing and packaging facilities and administrative offices at the BAK Industrial Park in Dalian. Of that space, approximately
35,355 square meters are manufacturing facilities. Our power battery manufacturing plant and packing plant in Dalian started commercial
production in July 2015.

 We
have completed the construction facilities for the Phase One of our Nanjing site, which occupies an area of 27,141 square meters.

 In
November 2021, the Company completed the acquisition of Hitrans. Hitrans owns a manufacturing facility, warehousing, R&D and administrative
offices in Zhejiang with a total area of 13,772 square meters. Of that space, approximately 10,660 square meters are manufacturing facilities.

 In
July 2023, we secured a rental agreement for a facility in Shangqiu, Henan, PRC, spanning an area of 22,000 square meters. This space
includes 12,000 square meters allocated for production purposes, specifically aimed at expanding our capacity to manufacture model 26700
cells. This strategic move is in response to the escalating demand for our battery products. Additionally, Nanjing BFD has leased a property
covering 548 square meters.

 We
believe that our facilities, including those under construction, meet our current business needs and will meet the needs of our expanded
operations in the future.

tables sets forth the breakdown of our facilities as of December 31, 2024 based on use.

 Facility

 Usage

 Area
 (m 2)

 Constructions completed – facilities owned

 Manufacturing

 43,875

 R&D and administrative

 10,659

 Warehousing

 16,879

 Other facilities

 15,169

 Total

 86,582

 Constructions–completed - facilities rented

 Manufacturing

 36,743

 Warehousing

 13,263

 Administrative

 6,414

 Other facilities

 5,000

 Total

 61,420

 The
following table presents the total acreage of facilities controlled by each of our major operating subsidiaries as of December 31, 2024:

 Area

 (m 2)

 Dalian CBAK Power facilities site
 area

 Total

 72,810

 Nanjing CBAK facility site area

 Total

 27,135

 Nanjing BFD facilities site area

 Total

 4,285

 Hitrans facilities site area

 Total

 13,772

 Shangqiu facilities site area

 Total

 30,000

 See
also " Item 1. Business—Overview of Our Business—Expansion of Manufacturing Capabilities " for more information
related to the construction of our Nanjing facilities.

 We
currently have insurance coverage for certain machinery, equipment and buildings located at our owned facilities. We are discussing with
multiple insurance service providers aiming to secure comprehensive insurance coverage for the remaining properties. In addition, our
subsidiary, Hitrans, maintains property insurance coverage against certain property and inventory damages and losses. If we were to suffer
any losses or damages to any of the facilities before purchasing insurance policies that provide adequate coverage, our business, financial
condition and results of operations may be materially and adversely affected.

 ITEM
3. LEGAL PROCEEDINGS.

 See Note
28 (ii) to our audited consolidated financial statements included in this report.

 ITEM
4. MINE SAFETY DISCLOSURES.

 Not applicable.

 PART
II

 ITEM
5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

 Market
Information

 Effective
June 21, 2019, the Company's Common Stock started trading on the Nasdaq under the symbol "CBAT."

 Approximate
Number of Holders of Our Common Stock

 As of March 14, 2025, there were approximately
50 holders of record of our common stock, which do not include the number of stockholders holding shares of our common stock in "street
name."

 Dividend
Policy

 We
have never declared or paid any dividends, nor do we have any present plan to pay any cash dividends on our common stock in the foreseeable
future. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.

 As
we are a holding company, we rely on dividends paid to us by our subsidiaries in the PRC through our Hong Kong subsidiaries, BAK Asia,
BAK Investments and Hong Kong Hitrans. In accordance with its articles of association, each of our subsidiaries in the PRC is required
to allocate to its statutory general reserve at least 10% of its respective after-tax profits determined in accordance with the PRC accounting
standards and regulations. Each of our subsidiaries in the PRC may stop allocations to its general reserve if such reserve has reached
50% of its registered capital. Allocations to the reserve can only be used for making up losses and other specified purposes and may
not be paid to us in the form of loans, advances, or cash dividends. Dividends paid by our PRC subsidiaries to BAK Asia, BAK Investments
and Hong Kong Hitrans, our Hong Kong subsidiaries, will not be subject to Hong Kong capital gains or other income tax under current Hong
Kong laws and regulations because they will not be deemed to be assessable income derived from or arising in Hong Kong. Such dividends,
however, may be subject to a 10% withholding tax in the PRC.

 Our
board of directors has discretion on whether to pay dividends unless the distribution would render us unable to repay our debts as they
become due, as provided in Chapter 78.288 of the Nevada Revised Statutes. Even if our board of directors decides to pay dividends, the
form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition,
contractual restrictions and other factors that the board of directors may deem relevant.

 Recent
Sales of Unregistered Securities

 There
were no unregistered sales of equity securities during the 2024 fiscal year that were not previously disclosed in a quarterly report
on Form 10-Q or a current report on Form 8-K that was filed during the 2024 fiscal year.

 Purchases
of Equity Securities

 No repurchases
of our common stock were made during the fiscal year of 2024.

 ITEM
6. [RESERVED]

 ITEM
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 The
following management's discussion and analysis should be read in conjunction with our financial statements and the notes thereto
and the other financial information appearing elsewhere in this report. In addition to historical information, the following discussion
contains certain forward-looking information. See "Special Note Regarding Forward Looking Statements" above for certain information
concerning those forward-looking statements. Our financial statements are prepared in U.S. dollars and in accordance with U.S. GAAP.

 Overview

 We
are engaged in the development, manufacture and sale of new energy high power lithium and sodium batteries, as well as cathode materials
and precursors for lithium batteries, which are mainly used in the following applications:

 Electric vehicles ("EV"), such as electric
 cars, electric buses, hybrid electric cars and buses;

 Light electric vehicles
 ("LEV"), such as electric bicycles, electric motors, electric tricycles and smaller-sized electric cars; and

 Energy storage including
 but not limited to residential energy supply & uninterruptible power supply application, and other high-power applications.

 In
2024, demand for our model 26650 lithium-ion batteries, manufactured at our Dalian facilities, has gradually declined, as the model has
been on the market since 2006 and is relatively outdated. In contrast, demand for our model 31240, produced at our Nanjing facilities,
has exceeded supply. To address these shifting demands, we are enhancing our product portfolio at the Dalian manufacturing center by
introducing the model 40135. Additionally, we are expanding the capacity of our Nanjing facilities by adding two new production lines
as part of Phase II construction. Currently, we have three production lines in our Dalian manufacturing center, with a total capacity
of 1 GWh per year. In Nanjing, our Phase I project has two production lines, capable of producing 1.3 GWh per year. Additionally, we
have two production lines in our Shangqiu manufacturing center, which we have rented to meet the high client demand, with a total capacity
of 0.5 GWh per year.

 We
generated revenues from the manufacture and sale of high-power lithium and sodium batteries as well as raw materials for lithium batteries
in the aggregate amounts of $176.6 million and $204.4 million for the fiscal years ended December 31, 2024 and 2023, respectively. We
incurred a net income of $9.6 million and a net loss $8.5 million during the fiscal years ended December 31, 2024 and 2023, respectively.
New revenues derived from the sale of materials used in manufacturing of lithium batteries, through the acquired subsidiary, Hitrans,
as well as the continuous climb of sales in batteries used in residential energy supply and UPS and light-electric-vehicle related products,
contributed to our total net revenues.

 For
more details, see " Item 1. Business—Overview of Our Business." Specifically, total net revenue from sales of
batteries for residential energy supply and uninterruptable supplies was $124.6 million for the fiscal year ended December 31, 2024,
as compared to $124.5 million for fiscal year ended December 31, 2023. Net revenue from sales of cathode materials and precursors was
$40.0 million for the fiscal year ended December 31, 2024, as compared to $71.4 million for fiscal year ended December 31, 2023. In addition,
net revenues from sales of batteries for light electric vehicles was $10.3 million for the fiscal year ended December 31, 2024, as compared
to $5.6 million for fiscal year ended December 31, 2023, an increase of $4.7 million, or 84%. We believe the government's new energy
policies will, in the long run, encourage the production of new energy vehicles, optimize the industry's structure, enhance technical
standards and strengthen the industry's competitiveness, which ultimately will foster strategic development of new energy vehicles.
In addition, our latest development of Model 32140 and 40135 battery and our planned investment in the R&D of Series 46 batteries
will help us regain competitiveness in the energy storage, LEV and EV markets with the appropriate products. With the demand for new
energy growing, we are confident in our ability to secure additional orders from the expanding market.

 We
completed the construction of a cylindrical power battery manufacturing plant in Dalian, which began commercial production in July 2015.
In addition to the Model 26650 batteries manufactured in Dalian, we are procuring equipment for a new production line for a larger-sized
cylindrical battery, Model 40135. We believe that the trial production will commence by May 2025, and the mass production will commence
in the second half of 2025.

 In
2020, we initiated the construction of our Nanjing facilities, planned in two phases. The Phase I commenced operations in the second
half of 2021, covering an area of approximately 27,173 square meters. Since then, we have been steadily increasing its production capacity
to 1.3 GWh. Construction of the Phase II began in 2022 and includes three major manufacturing plants. The construction of the ceiling
stage for the first of the three plants in Phase II was successfully completed in 2023. We are now preparing for equipment installation
to stay on track for trial production by May 2025, followed by mass production in the second half of 2025. Once fully operational with
these three new plants, the Nanjing facilities are expected to provide a total capacity of approximately 20 GWh, supporting the growing
demand from our customers. In 2023, our client demand for batteries soared, prompting us to rent additional manufacturing space in Shangqiu,
Henan, PRC. Our Shangqiu facility has a capacity of 0.5 GWh per year. We have two production lines at this leased facility, and the renovation
costs were covered by the owner. Additionally, subject to meeting certain criteria, the rental expenses can be offset by the taxes incurred. In
addition to our construction efforts, we have also invested in machinery and equipment to expand our production capacity. Thanks to the
booming demand from our clients, our battery segment has successfully returned to profitability since 2023. We are confident that our
battery segment will continue to improve its profitability as we move forward.

 We
acquired 81.56% of registered equity interests (representing 75.57% of paid-up capital) in Hitrans, a leading developer and manufacturer
of NCM precursor and cathode materials in China, in November 2021. As of December 31, 2024, our equity interests in Hitrans had reduced
to 67.33% (representing 72.99% of paid-up capital) after Hitrans accepted investments from several investors. See " Item 1. Business—Overview
of Our Business—Acquisition of A Raw Materials Manufacturer " for more information on the acquisition.

 The
consolidated financial statements contained in this annual report have been prepared assuming we will continue to operate as a going
concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The consolidated
financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of
assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty related to our ability to
continue as a going concern.

 Financial
Statement Presentation

 Net
revenues. The Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that
reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five-step
model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract;
(iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize
revenues when (or as) we satisfy the performance obligation.

from product sales are recognized when the customer obtains control of our product, which occurs at a point in time, typically upon delivery
to the customer. We expense incremental costs of obtaining a contract as and when incurred it the expected amortization period of the
asset that it would have recognized is on year or less or the amount is immaterial.

 Revenue
from product sales is recorded net of reserves established for applicable discounts and allowances that are offered within contracts
with our customers.

revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the categories: discounts and
returns. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions
of accounts receivable as the amount is payable to the Company's customer.

 Cost
of revenues. Cost of revenues consists primarily of material costs, employee remuneration for staff engaged in production activity,
share-based compensation, depreciation and related expenses that are directly attributable to the production of products. Cost of revenues
also includes write-downs of inventory to lower of cost and net realizable value.

and development expenses. Research and development expenses primarily consist of remuneration for R&D staff, share-based
compensation, depreciation and maintenance expenses relating to R&D equipment, and R&D material costs.

 Sales
and marketing expenses. Sales and marketing expenses consist primarily of remuneration for staff involved in selling and marketing
efforts, including staff engaged in the packaging of goods for shipment, warranty expenses, advertising cost, depreciation, share-based
compensation and travel and entertainment expenses. We do not pay slotting fees to retail companies for displaying our products, engage
in cooperative advertising programs, participate in buy-down programs or similar arrangements.

 General
and administrative expenses. General and administrative expenses consist primarily of employee remuneration, share-based compensation,
professional fees, insurance, benefits, general office expenses, depreciation, liquidated damage charges and bad debt expenses.

costs, net. Finance costs consist primarily of interest income and interest on bank loans, net of capitalized interest.

tax expenses. Our subsidiaries in PRC are subject to an income tax rate of 25%, except for Hitrans, CBAK Power and Nanjing CBAK
have been recognized as a "High and New Technology Enterprise" and enjoyed a preferential tax rate of 15% for three years
from the approval date, expiring in 2025. Our Hong Kong subsidiaries, BAK Asia, BAK Investment and Hong Kong Hitrans, are subject to
profits tax at a rate of 16.5%. However, because we did not have any assessable income derived from or arising in Hong Kong, BAK Asia,
BAK Investment and Hong Kong Hitrans had not paid any such tax.

 Results
of Operations

 Comparison
of Years Ended December 31, 2023 and 2024

 The
following table sets forth key components of our results of operations for the years indicated, both in dollars and as a percentage of
our revenue.

 (All
amounts, other than percentages, in thousands of U.S. dollars)

 Year
 Ended December 31,

 Change

 2023

 2024

 $

 %

 Net
 revenues

 $
 204,438

 $
 176,615

 -27,823

 -14
 %

 Cost
 of revenues

 (172,714
)

 (134,839
)

 37,875

 -22
 %

 Gross
 profit

 31,724

 41,776

 10,052

 %

 expenses:

 and development expenses

 (11,928
)

 (13,010
)

 -1,082

 %

 Sales
 and marketing expenses

 (4,904
)

 (5,198
)

 -294

 %

 General
 and administrative expenses

 (13,789
)

 (13,948
)

 -159

 %

 charge on property, plant and equipment

 (7,070
)

 (475
)

 6,595

 -93
 %

 Provision
 of expected credit losses

 (1,285
)

 (356
)

 -72
 %

 Total
 operating expenses

 (38,976
)

 (32,987
)

 5,989

 -15
 %

 (loss) income

 (7,252
)

 8,789

 16,041

 -221
 %

 income, net

 1,283

 %

 charges on equity investee

 (2,366
)

 -

 2,366

 -100
 %

 Share
 of loss of equity investee

 (27
)

 (19
)

 -30
 %

 Gain
 on disposal of equity investee

 -

 n/a

 Other
 income, net

 3,023

 1,046

 -1,977

 -65
 %

 Change
 in fair value of warrants liability

 -

 -136

 -100
 %

 (Loss)
 income before income tax

 (6,053
)

 11,144

 17,197

 -284
 %

 tax expense

 (2,486
)

 (1,559
)

 -37
 %

 Net
 (loss) income

 (8,539
)

 9,585

 18,124

 -212
 %

 Less:
 Net loss attributable to non-controlling interests

 6,090

 2,205

 -3,885

 -64
 %

 Net
 (loss) income attributable to shareholders of CBAK Energy Technology, Inc.

 $
 (2,449
)

 11,790

 14,239

 -581
 %

 Net
revenues. Net revenues were $176.6 million for the fiscal year ended December 31, 2024 as compared to $204.4 million for the
fiscal year ended December 31, 2023, a decrease of $27.8 million, or 14%.

table sets forth the breakdown of our net revenues by end-product applications.

 (All
amounts, other than percentage, in thousands of U.S. dollars)

 Years
 Ended

 Change

 2023

 2024

 $

 %

 High-power lithium batteries used in:

 Electric vehicles

 $
 2,883

 $
 1,682

 -1,201

 -42
 %

 Light electric vehicles

 5,607

 10,319

 4,712

 %

 Residential Energy Supply
 & Uninterruptable supplies

 124,503

 124,588

 %

 132,993

 136,589

 3,596

 %

 Materials used in manufacturing of lithium
 batteries

 Cathode

 39,846

 34,229

 -5,617

 -14
 %

 Precursor

 31,599

 5,797

 -25,802

 -82
 %

 71,445

 40,026

 -31,419

 -44
 %

 Total

 $
 204,438

 $
 176,615

 -27,823

 -14
 %

 Net
revenues from sales of batteries for electric vehicles were $1.7 million for the fiscal year ended December 31, 2024, as compared to
$2.9 million for 2023, a decrease of $1.2 million or 42%.

 Net
revenues from sales of batteries for light electric vehicles was approximately $10.3 million for the fiscal year ended December 31, 2024,
as compared $5.6 million for 2023, representing an increase of $4.7 million, or 84%. We strive to continue to penetrate the market for
batteries used in light electric vehicles, especially the international market such as India and Vietnam. We believe that our sales
campaign in the international market will contribute to a rebound in our sales volume in this sector in the near future.

 Net revenues from sales of batteries for residential
energy supply & uninterruptable supplies was $124.6 million for the fiscal year ended December 31, 2024, as compared to $124.5 million
for fiscal year ended December 31, 2023. The modest increase in battery sales for residential energy storage and uninterruptible power
supplies was driven by our increasing demand for our Model 32140 from the portable power supply sector, partially offset by declining
demand for our Model 26650. To meet the surging demand, we are expanding production capacity for the Model 32140 while diversifying our
product portfolio with the introduction of a larger cylindrical cell, the Model 40135, to strengthen our competitive position in the residential
energy supply sector.

 Net revenues from sales of materials for use in
manufacturing of lithium battery cells were $40.0 million for the fiscal year ended December 31, 2024, as compared to $71.4 million for
2023. This primarily resulted from a rapid decrease in raw material prices since 2023, which led to significant downward pressure on the
pricing of our battery material products.

 Cost
of revenues. Cost of revenues decreased to $134.8 million for the fiscal year ended December 31, 2024, as compared to $172.7
million for 2023, a decrease of $37.9 million, or 22%. The cost of revenues includes written down of obsolete inventories of $4.9 million
for the year ended December 31, 2024, as compared to write down of obsolete inventories of $3.6 million for the same period in 2023.
We write down the inventory value whenever there is an indication that it is impaired.

 Gross
profit. Gross profit for the year ended December 31, 2024 was $41.8 million, or 24% of net revenues as compared to gross profit
of $31.7 million, or 15.5% of net revenues, for the fiscal year ended December 31, 2023. Gross profit margin significantly increased
largely due to our ability to sell our battery products at a relatively higher price to certain customers.

and development expenses. Research and development expenses increased to $13.0 million for the year ended December 31, 2024,
as compared to $11.9 million for 2023, an increase of $1.1 million, or 9%. The increase primarily resulted from $3.1 million increase
in salaries and social insurance expenses due to a growing number of employees at Nanjing CBAK and the new operation in Shangqiu, offset
by the $1.4 million decrease in materials and consumables used.

 Sales and marketing expenses. Sales
and marketing expenses increased to $5.2 million for the year ended December 31, 2024, as compared to $4.9 million for 2023, an increase
of $0.3 million, or 6%. As a percentage of revenues, sales and marketing expenses were 2.9% and 2.4% of revenues for the years ended December
31, 2024 and 2023, respectively. The increase mainly resulted from an increase of $0.2 million in promotion expenses. We have expanded
our marketing efforts for overseas markets.

 General and administrative expenses. General
and administrative expenses were $13.9 million and $13.8 million for the years ended December 31, 2024 and 2023, respectively. Our general
and administrative expenses mainly consist of salaries share-based compensation, general corporate related expenses, legal and other professional
services fee.

 Long-lived
assets impairment charge. During the course of our strategic review of our operations, we assessed the recoverability of the
carrying value of our long-lived assets which resulted in impairment losses of $0.5 million and $7.1 million for the years ended December
31, 2024 and 2023, respectively. The impairment charge represented the excess of carrying amounts of our long-lived assets over the estimated
fair value of the Company's production facilities in Hitrans for the production of materials used in manufacturing of lithium batteries,
due to underperformance of Hitrans reporting unit. No impairment charge on production facilities in Dalian, Nanjing and Shangqiu.

 Provision
for expected credit losses. Provision for expected credit losses was $0.4 million for the year ended December 31, 2024, as compared
to $1.3 million for 2023. We determine the allowance based on historical write-off experience, customer specific facts and economic conditions.

income (loss). As a result of the above, our operating income was $8.8 million for the year ended December 31, 2024, as compared
to an operating loss of $7.3 million for 2023.

income, net. Finance income, net was $1.3 million and $0.4 million for the years ended December 31, 2024 and 2023, respectively.
The finance income increase mainly resulted from increase in interest income from our term deposits and changes to exchange rates.

 Other income, net. Other income was
$1.0 million and $3.0 million for the years ended December 31, 2024 and 2023, respectively.

 Changes
in fair value of warrants liability. We issued warrants in the financings we consummated in December 2020 and February 2021,
respectively. We determined that these warrants should be accounted for as derivative liabilities, as the warrants are dominated in a
currency (U.S. dollar) other than our functional currency. The change in fair value of warrants liability is mainly due to our share
price decline.

tax expenses. Income tax expenses were $1.6 million for the year ended December 31, 2024, primarily attributable to our Dalian
operations. Income tax expenses were $2.5 million for the year ended December 31, 2023 which was primarily due to the "full valuation
allowance" of the deferred tax assets.

 Net
income (loss). As a result of the foregoing, we had a net income of $9.6 million for the year ended December 31, 2024 compared
to a net loss of $8.5 million for the year ended December 31, 2023.

 Liquidity
and Capital Resources

 We
have financed our liquidity requirements from a variety of sources, including bank loans, other short-term loans and bills payable under
bank credit agreements, advance from our related and unrelated parties, investors and issuance of capital stock.

 As
of December 31, 2024, we had cash and cash equivalents and restricted cash of $60.8 million. Our total current assets were $141.4 million
and our total current liabilities were $171.7 million, resulting in a net working capital deficit of $30.3 million.

 Lending
from Financial Institutions

 On November 16, 2021, we obtained banking facilities
from Shaoxing Branch of Bank of Communications Co., Ltd with a maximum amount of RMB120.1 million (approximately $16.6 million) with the
term from November 18, 2021 to November 18, 2026. The facility was secured by the Company's land use rights and buildings. In January
2023, the Company renewed the banking facilities with Shaoxing Branch of Bank of Communications Co., Ltd with a maximum amount of RMB160.0
million (approximately $22.1 million) with the term from January 2023 to December 2027. The facility was secured by the Company's
land use rights and buildings. Under the facility, we have borrowed RMB142.8 million (approximately $20.1 million) and RMB159.9 million
(approximately $21.9 million) as of December 31, 2023 and 2024, respectively, bearing interest at 3.45% to 3.65% per annum expiring through
February to December 2025.

 On
January 17, 2022, we obtained a one-year term facility from Agricultural Bank of China with a maximum amount of RMB10 million (approximately
$1.4 million) bearing interest at 105% of benchmark rate of the People's Bank of China ("PBOC") for short-term loans,
which is 3.85% per annum. The facility was guaranteed by our former CEO, Mr. Yunfei Li and Mr. Yunfei Li's wife Ms. Qinghui Yuan
and secured by an unrelated third party, Jiangsu Credits Financing Guarantee Co., Ltd. We borrowed RMB10 million (approximately $1.4
million) on January 20, 2022 for a term until January 16, 2023. We repaid RMB10 million (approximately $1.4 million) early on January
5, 2023. On January 6, 2023, we borrowed a one-year term loan of RMB10 million (approximately $1.4 million) for a period of one year
to January 4, 2024, bearing interest at 120% of benchmark rate of the PBOC for short-term loans, which is 3.85% per annum, while other
terms and guarantee remain the same. We repaid the loan on January 4, 2024.

 On
February 9, 2022, we obtained a one-year term facility from Jiangsu Gaochun Rural Commercial Bank with a maximum amount of RMB10 million
(approximately $1.4 million) bearing interest at 124% of benchmark rate of the People's Bank of China ("PBOC") for
short-term loans, which is 4.94% per annum. The facility was guaranteed by the Company's former CEO, Mr. Yunfei Li and Mr. Yunfei
Li's wife Ms. Qinghui Yuan. We borrowed RMB10 million (approximately $1.4 million) on February 17, 2022 for a term until January
28, 2023. We repaid RMB10 million (approximately $1.4 million) on January 16, 2023. On January 17, 2023, we borrowed a one-year loan
of RMB10 million (approximately $1.4 million) bearing interest at 129% of benchmark rate of PBOC for short-term loans, which is 4.70%
per annum for a term until January 13, 2024. We repaid the loan on January 13, 2024.

 On
April 28, 2022, we obtained a three-year term facility from Industrial and Commercial Bank of China Nanjing Gaochun branch, with a maximum
amount of RMB12 million (approximately $1.7 million) with the term from April 21, 2022 to April 21, 2025. The facility was guaranteed
by our former CEO, Mr. Yunfei Li and Mr. Yunfei Li's wife Ms. Qinghui Yuan. Under the facility, we borrowed RMB10 million (approximately
$1.5 million) on April 29, 2022, bearing interest at 3.95% per annum for a term until April 29, 2023. We repaid RMB10 million (approximately
$1.4 million) on April 19, 2023. On April 20, 2023, we borrowed another one-year loan of RMB10 million (approximately $1.4 million) bearing
interest at 102.5% of benchmark rate of PBOC for short-term loans, which is 3.90% per annum for a term until April 19, 2024. We repaid
the loan on April 19, 2024.

 On
September 25, 2022, we entered into another one-year term facility with Jiangsu Gaochun Rural Commercial Bank with a maximum amount of
RMB9 million (approximately $1.3 million) bearing interest rate at 4.81% per annum. The facility was guaranteed by 100% equity in CBAK
Nanjing held by BAK Investment and the Company's former CEO, Mr. Yunfei Li and Mr. Yunfei Li's wife Ms. Qinghui Yuan. We
borrowed RMB9 million (approximately $1.3 million) on September 27, 2022 for a term until September 24, 2023. We repaid the loan on September
24, 2023.

 We
entered into another one-year term facility with Jiangsu Gaochun Rural Commercial Bank with a maximum amount of RMB9 million (approximately
$1.2 million) bearing interest rate at 4.6% per annum for a period from September 27, 2023 to August 31, 2024. The facility was guaranteed
by 100% equity in CBAK Nanjing held by BAK Investment and our former CEO, Mr. Yunfei Li and Mr. Yunfei Li's wife Ms. Qinghui Yuan.
We borrowed RMB9 million (approximately $1.3 million) on September 27, 2023 for a term until August 31, 2024. We repaid the loan on
August 31, 2024.

 On
November 8, 2022, we entered into a short-term loan agreement with China CITIC Bank Shaoxing Branch to August 9, 2023 with a maximum
amount of RMB10 million (approximately $1.4 million) bearing interest rate at 4.35% per annum. We borrowed RMB10 million (approximately
$1.4 million) on the same date. We have repaid RMB5 million (approximately $0.7 million), RMB0.2 million (approximately $0.1 million)
and RMB4.8, million (approximately $0.7 million) on November 16, 2022, December 27, 2022 and August 9, 2023, respectively. We entered
into another short-term loan agreement with China CITIC Bank Shaoxing Branch for a one-year short-term loan agreement with a maximum
amount of RMB0.2 million (approximately $0.1 million) for December 27, 2022 to December 27, 2023, bearing interest rate at 4.20% per
annum. We entered into another loan agreement with China CITIC Bank Shaoxing Branch for a short-term loan of RMB4.8 million (approximately
$0.7 million) from August 10, 2023 to May 2, 2024, bearing interest rate at 4.3% per annum. We repaid the loan on May 2, 2024.

 On
December 9, 2022, we obtained a RMB5 million (approximately $0.7 million) letter of credit from China CITIC Bank for a period to October
30, 2023 for settlement of Hitrans purchase. We utilized RMB1.5 million (approximately $0.2 million) letter of credit at an interest
rate of 2.7% for a period of one year to January 5, 2023.

 On
January 7, 2023, we obtained a two-year term facility from Postal Savings Bank of China, Nanjing Gaochun Branch with a maximum amount
of RMB10 million (approximately $1.4 million) for a period from January 7, 2023 to January 6, 2025. The facility was guaranteed by our
former CEO, Mr. Yunfei Li, Mr. Yunfei Li's wife Ms. Qinghui Yuan and CBAK New Energy (Nanjing) Co., Ltd. We borrowed RMB5 million
(approximately $0.7 million) on January 12, 2023 for a term of one year until January 11, 2024, bearing interest at 3.65% per annum.
We repaid the above early on June 15, 2023. On June 27, 2023, we entered into another loan agreement for one year from June 27, 2023
to June 26, 2024 under the two-year term facility for a maximum loan amount of RMB10 million (approximately $1.4 million) bearing interest
rate at 3.65 % pr annum. We borrowed RMB10 million (approximately $1.4 million) on the same date. The loan was guaranteed by our former
CEO, Mr. Yunfei Li, Mr. Yunfei Li's wife Ms. Qinghui Yuan and CBAK New Energy (Nanjing) Co., Ltd. We repaid the loan on June 26,
2024.

 On
March 29, 2023, we and Bank of China Limited entered into a short-term loan agreement for one year from March 29, 2023 to March 28, 2024
for a maximum loan amount to RMB5 million (approximately $0.7 million) bearing interest rate at 3.65% per annum. We borrowed RMB5 million
(approximately $0.7 million) on the same date. The loan was secured by our buildings in Dalian. We repaid RMB5million (approximately
$0.7 million) on March 27, 2024. On March 28, 2024, we borrowed another one-year loan of RMB5 million (approximately $0.7 million) bearing
interest rate at 3.45% per annum. We early repaid the loan on August 21, 2024.

 On
April 19, 2023, we and Bank of Nanjing Gaochun Branch entered into a short-term loan agreement for one year from April 10, 2023 to April
9, 2024 for RMB10 million (approximately $1.4 million) bearing interest rate at 3.7% per annum. We borrowed RMB10 million (approximately
$1.4 million) on April 23, 2023. The loan was guaranteed by our former CEO, Mr. Yunfei Li and Mr. Yunfei Li's wife Ms. Qinghui
Yuan. We repaid the loan on April 9, 2024.

 On
June 9, 2023, we and China Zheshang Bank Co., Ltd Shangyu Branch entered into a short-term loan agreement for one year from June 9, 2023
to June 7, 2024 for a maximum loan amount to RMB4 million (approximately $0.6 million) bearing interest rate at 4.55% per annum. We borrowed
RMB4 million (approximately $0.6 million) on the same date. We early repaid the loan principal and related loan interests on December
22, 2023.

 On
July 31, 2023, we obtained a three-year term facility from Bank of China Gaochun Branch, with a maximum amount of RMB10 million (approximately
$1.4 million) with the term from July 31, 2023 to July 30, 2026. The facility was guaranteed by our former CEO, Mr, Yunfei Li and Mr.
Yunfei Li's wife Ms. Qinghui Yuan. Under the facility, we borrowed RMB10 million (approximately $1.4 million) on July 31, 2023,
bearing interest rate at 3.15% per annum. The Company repaid the loan on July 22, 2024

 On
August 3, 2023, we and Bank of China entered into a short term loan agreement for one year from August 3, 2023 to August 2, 2024 for
a maximum amount of RMB10 million (approximately $1.4 million) bearing interest rate at 3.55% per annum. We borrowed RMB10 million (approximately
$1.4 million) on September 27, 2023. The loan was secured by our buildings in Dalian. We repaid the loan on August 2, 2024.

 On
January 24, 2024, we entered into a short-term credit-guaranteed loan agreement with Zhejiang Shangyu Rural Commercial Bank for one year
to January 17, 2025 with an amount of RMB5 million (approximately $0.7 million) bearing interest at 4.1% per annum. We borrowed RMB5
million (approximately $0.7 million) on the same date. We early repaid the loan on September 27, 2024.

 On
March 26, 2024, we entered into a short-term credit-guaranteed loan agreement with Zhejiang Shangyu Rural Commercial Bank for one year
to March 25, 2025 with an amount of RMB5 million (approximately $0.7 million) bearing interest at 4.1% per annum. We borrowed RMB5 million
(approximately $0.7 million) on the same date. We early repaid the loan on September 27, 2024.

 On
April 9, 2024, the Company and China Zheshang Bank Co., Ltd Shangyu Branch entered into a short-term loan agreement for one year from
April 9, 2024 to April 7, 2025 for a maximum loan amount to RMB5.5 million (approximately $0.8 million) bearing interest rate at 4.05%
per annum. We borrowed RMB5.5 million (approximately $0.8 million) on the same date.

 On
June 24, 2024, the Company and Bank of China entered into a short-term loan agreement, with a maximum amount of RMB10 million (approximately
$1.4 million) with the term from June 24, 2024 to June 20, 2025. The facility was guaranteed by our former CEO, Mr, Yunfei Li and Mr.
Yunfei Li's wife Ms. Qinghui Yuan. Under the facility, we borrowed RMB10 million (approximately $1.4 million) on June 24, 2024,
bearing interest rate at 3.0% per annum. We early repaid the loan on August 23, 2024.

 On
September 29, 2024, we and Zhejiang Shangyu Rural Commercial Bank entered into a short-term credit-guaranteed loan agreement for RMB15
million (approximately $2.0 million) with the term of one year from September 29, 2024 to September 26, 2025 bearing 4.00% interest rate.
We borrowed RMB15 million (approximately $2.1 million) on the same date.

 On
December 31, 2024, we and China Everbright Bank Co., Ltd Shaoxing Branch entered into a short-term loan agreement for RMB10 million (approximately
$1.4 million) with the term of one year from December 31, 2024 to December 30, 2025 bearing 2.9% interest rate. We borrowed RMB10 million
(approximately $1.4 million) on the same date.

 We
obtained banking facilities from China Zheshang Bank Co., Ltd. Shenyang Branch with a maximum amount of RMB390 million (approximately
$53.4 million) with the term from June 28, 2023 to April 29, 2025. We borrowed a series of acceptance bills totaling RMB210.8 million
(approximately $28.9 million) for various terms expiring through January to June 2025, which was secured by our pledged deposit of RMB194.1
million (approximately $26.5 million, term deposit of RMB14.6 million (approximately $2.0 million) and our bills receivables of RMB2.5
million (approximately $0.4 million).

 We
obtained another banking facilities from China Zheshang Bank Co., Ltd. Shenyang Branch with a maximum amount of RMB300 million (approximately
$41.4 million) with the term from December 14, 2023 to April 29, 2025. We borrowed a series of acceptance bills totaling RMB55.6 million
(approximately $7.6 million) for various terms expiring through April to June 2025, which was secured by our pledged deposit of RMB55.6
million (approximately $7.6 million.

 We
borrowed a series of acceptance bills from Bank of Nanjing totaling RMB37.2 million (approximately $5.1 million) for various terms expiring
through May to June 2025, which was secured by our cash totaling RMB37.2 million (approximately $5.1 million).

 We
borrowed a series of acceptance bills from China Zheshang Bank Co. Ltd Shangyu Branch totaling RMB67.0 million (approximately $9.2 million)
for various terms expiring through January to May 2025, which was secured by our pledged deposit of RMB59.7 million (approximately $8.2
million) and our bills receivables of RMB7.7 million (approximately $1.0 million).

 We borrowed
a series of acceptance bills from Bank of Communications Co., Ltd. Shangyu Branch totaling RMB47.7 million (approximately $6.5 million)
expiring through March to May 2025, which was secured by our pledged deposit of RMB47.7 million (approximately $6.5 million).

 As
of December 31, 2024, we had no unutilized committed banking facilities. We plan to renew these loans upon maturity and intend to raise
additional funds through bank borrowings in the future to meet our daily cash demands, if required.

 Equity
and Debt Financings from Investors

 We
have also obtained funds through private placements, registered direct offerings and other equity and debt financings in the past:

 On
July 28, 2016, the Company entered into securities purchase agreements with Mr. Jiping Zhou and Mr. Dawei Li to issue and sell an aggregate
of 2,206,640 shares of common stock of the Company, at $2.5 per share, for an aggregate consideration of approximately $5.52 million.
On August 17, 2016, the Company issued the foregoing shares to the two investors.

 On
February 17, 2017, we signed a letter of understanding with each of eight individual investors, including our CEO, Mr. Yunfei Li, whereby
these shareholders agreed in principle to subscribe for new shares of our common stock totaling $10 million. The issue price was determined
with reference to the market price prior to the issuance of new shares. In January 2017, the shareholders paid us a total of $2.1 million
as refundable earnest money, among which, Mr. Yunfei Li agreed to subscribe new shares totaling $1.12 million and pay a refundable earnest
money of $0.2 million. In April and May 2017, we received cash of $9.6 million from these shareholders. On May 31, 2017, we entered into
a securities purchase agreement with these investors, pursuant to which we agreed to issue an aggregate of 6,403,518 shares of common
stock to these investors, at a purchase price of $1.50 per share, for an aggregate price of $9.6 million, including 764,018 shares issued
to Mr. Yunfei Li. On June 22, 2017, we issued the shares to the investors. The issuance of the shares to the investors was made in reliance
on the exemption provided by Section 4(a)(2) of the Securities Act. In 2019, according to the securities purchase agreement and agreed
by the investors, we returned partial earnest money of $966,579 (approximately RMB6.7 million) to these investors.

 On
January 7, 2019, each of Mr. Dawei Li and Mr. Yunfei Li entered into an agreement with CBAK Power and Tianjin New Energy whereby Tianjin
New Energy assigned its rights to loans to CBAK Power of approximately $3.4 million (RMB23,980,950) and $1.7 million (RMB11,647,890)
(totaled $5.1 million, the "First Debt") to Mr. Dawei Li and Mr. Yunfei Li, respectively. On the same date, the Company entered
into a cancellation agreement with Mr. Dawei Li and Mr. Yunfei Li. Pursuant to the terms of the cancellation agreement, Mr. Dawei Li
and Mr. Yunfei Li agreed to cancel the First Debt in exchange for 3,431,373 and 1,666,667 shares of common stock of the Company, respectively,
at an exchange price of $1.02 per share. Upon receipt of the shares, the creditors released the Company from any claims, demands and
other obligations relating to the First Debt.

 On
April 26, 2019, each of Mr. Jun Lang, Ms. Jing Shi and Asia EVK Energy Auto Limited ("Asia EVK") entered into an agreement
with CBAK Power and Tianjin New Energy whereby Tianjin New Energy assigned its rights to loans to CBAK Power of approximately $0.3 million
(RMB2,225,082), $0.1 million (RMB 912,204) and $5.2 million (RMB35,406,036) (collectively $5.7 million, the "Second Debt")
to Mr. Jun Lang, Ms. Jing Shi and Asia EVK, respectively. On the same date, the Company entered into a cancellation agreement with Mr.
Jun Lang, Ms. Jing Shi and Asia EVK (the creditors). Pursuant to the terms of the Cancellation Agreement, the creditors agreed to cancel
the Second Debt in exchange for 300,534, 123,208 and 4,782,163 shares of common stock of the Company, respectively, at an exchange price
of $1.1 per share. Upon receipt of the shares, the creditors released the Company from any claims, demands and other obligations relating
to the Second Debt.

 On
June 28, 2019, each of Mr. Dawei Li and Mr. Yunfei Li entered into an agreement with CBAK Power to loan approximately $1.4 million (RMB10,000,000)
and $2.5 million (RMB18,000,000), respectively, to CBAK Power for a terms of six months (collectively $3.9 million, the "Third
Debt"). The loan was unsecured, non-interest bearing and repayable on demand. On July 16, 2019, each of Asia EVK and Mr. Yunfei
Li entered into an agreement with CBAK Power and Dalian Zhenghong Architectural Decoration and Installation Engineering Co. Ltd. (the
Company's construction contractor) whereby Dalian Zhenghong Architectural Decoration and Installation Engineering Co. Ltd. assigned
its rights to the unpaid construction fees owed by CBAK Power of approximately $2.8 million (RMB20,000,000) and $0.4 million (RMB2,813,810)
(collectively $3.2 million, the "Fourth Debt") to Asia EVK and Mr. Yunfei Li, respectively. On July 26, 2019, we entered
into a cancellation agreement with Mr. Dawei Li, Mr. Yunfei Li and Asia EVK (the creditors). Pursuant to the terms of the cancellation
agreement, Mr. Dawei Li, Mr. Yunfei Li and Asia EVK agreed to cancel the Third Debt and Fourth Debt in exchange for 1,384,717, 2,938,067
and 2,769,435 shares of common stock of the Company, respectively, at an exchange price of $1.05 per share. Upon receipt of the shares,
the creditors released the Company from any claims, demands and other obligations relating to the Third Debt and Fourth Debt.

 On
October 10, 2019, each of Mr. Shibin Mao, Ms. Lijuan Wang and Mr. Ping Shen entered into an agreement with CBAK Power and Zhengzhou BAK
New Energy Vehicle Co., Ltd. (the Company's supplier) whereby Zhengzhou BAK New Energy Vehicle Co., Ltd. assigned its rights to
the unpaid inventories cost owed by CBAK Power of approximately $2.1 million (RMB15,000,000), $1.0 million (RMB7,380,000) and $1.0 million
(RMB7,380,000) (collectively $4.2 million, the "Fifth Debt") to Mr. Shibin Mao, Ms. Lijuan Wang and Mr. Ping Shen, respectively.

 On
October 14, 2019, we entered into a cancellation agreement with Mr. Shangdong Liu, Mr. Shibin Mao, Ms. Lijuan Wang and Mr. Ping Shen
(the creditors). Pursuant to the terms of the cancellation agreement, Mr. Shangdong Liu, Mr. Shibin Mao, Ms. Lijuan Wang and Mr. Ping
Shen agreed to cancel and convert the Fifth Debt and the unpaid earnest money in exchange for 528,053, 3,536,068, 2,267,798 and 2,267,798
shares of common stock of the Company, respectively, at an exchange price of $0.6 per share. Upon receipt of the shares, the creditors
released the Company from any claims, demands and other obligations relating to the Fifth Debt and the unpaid earnest money.

 On
April 27, 2020, we entered into a cancellation agreement with Mr. Yunfei Li, Asia EVK and Mr. Ping Shen, who loaned an aggregate of approximately
$4.3 million to CBAK Power (the "Sixth Debt"). Pursuant to the terms of the cancellation agreement, the creditors agreed
to cancel the Sixth Debt in exchange for an aggregate of 8,928,193 shares of common stock of the Company at an exchange price of $0.48
per share. According to the amount of loan, 2,062,619, 2,151,017 and 4,714,557 shares were issued to Mr. Yunfei Li, Asia EVK and Mr.
Pin Shen, respectively. Upon receipt of the shares, the creditors released the Company from any claims, demands and other obligations
relating to the Sixth Debt.

 On
July 24, 2019, we entered into a securities purchase agreement with Atlas Sciences, LLC (the "Lender"), pursuant to which
we issued a promissory note (the "Note I") to the Lender. The Note I has an original principal amount of $1,395,000, bears
interest at a rate of 10% per annum and will mature 12 months after the issuance, unless earlier paid or redeemed in accordance with
its terms. The Company received proceeds of $1,250,000 after an original issue discount of $125,000 and payment of Lender's expenses
of $20,000.

 On
December 30, 2019, we entered into a second securities purchase agreement with Atlas Sciences, LLC, pursuant to which the Company issued
a promissory note (the "Note II") to the Lender. The Note II has an original principal amount of $1,670,000, bears interest
at a rate of 10% per annum and will mature 12 months after the issuance, unless earlier paid or redeemed in accordance with its terms.
We received proceeds of $1,500,000 after an original issue discount of $150,000 and payment of Lender's expenses of $20,000.

 On
January 27, 2020, we entered into an exchange agreement (the "First Exchange Agreement") with the Lender, pursuant to which
we and the Lender agreed to (i) partition a new promissory note in the original principal amount equal to $100,000 (the "Partitioned
Promissory Note) from the outstanding balance of certain promissory note that the Company issued to the Lender on July 24, 2019, which
has an original principal amount of $1,395,000, and (ii) exchange the Partitioned Promissory Note for the issuance of 160,256 shares
of the Company's common stock, par value $0.001 per share, to the Lender.

 On
February 20, 2020, we entered into another exchange agreement (the "Second Exchange Agreement") with the Lender, pursuant
to which the Company and the Lender agreed to (i) partition a new promissory note in the original principal amount equal to $100,000
(the "Partitioned Promissory Note") from the outstanding balance of certain promissory note that the Company issued to the
Lender on July 24, 2019, which has an original principal amount of $1,395,000, and (ii) exchange the Partitioned Promissory Note for
the issuance of 207,641 shares of the Company's common stock, par value $0.001 per share, to the Lender.

 On
April 28, 2020, we entered into a third exchange agreement (the "Third Exchange Agreement") with the Lender, pursuant to
which the Company and the Lender agreed to (i) partition a new promissory note in the original principal amount equal to $100,000 (the
"Partitioned Promissory Note") from the outstanding balance of certain promissory note that the Company issued to the Lender
on July 24, 2019, which has an original principal amount of $1,395,000, and (ii) exchange the Partitioned Promissory Note for the issuance
of 312,500 shares of the Company's common stock, par value $0.001 per share, to the Lender.

 On
June 8, 2020, we entered into a fourth exchange agreement (the "Fourth Exchange Agreement") with the Lender, pursuant to
which the Company and the Lender agreed to (i) partition a new promissory note in the original principal amount equal to $100,000 from
the outstanding balance of certain promissory note that the Company issued to the Lender on July 24, 2019, which has an original principal
amount of $1,395,000, and (ii) exchange the partitioned promissory note for the issuance of 271,739 shares of the Company's common
stock, par value $0.001 per share to the Lender.

 On
June 10, 2020, we entered into a fifth exchange agreement (the "Fifth Exchange Agreement") with the Lender, pursuant to which
the Company and the Lender agreed to (i) partition a new promissory note in the original principal amount equal to $150,000 from the
outstanding balance of certain promissory note that the Company issued to the Lender on July 24, 2019, which has an original principal
amount of $1,395,000, and (ii) exchange the partitioned promissory note for the issuance of 407,609 shares of the Company's common
stock, par value $0.001 per share to the Lender.

 On
July 6, 2020, we entered into a sixth exchange agreement (the "Sixth Exchange Agreement") with the Lender, pursuant to which
the Company and the Lender agreed to (i) partition a new promissory note in the original principal amount equal to $250,000 from the
outstanding balance of certain promissory note that the Company issued to the Lender on July 24, 2019, which has an original principal
amount of $1,395,000, and (ii) exchange the partitioned promissory note for the issuance of 461,595 shares of the Company's common
stock, par value $0.001 per share to the Lender.

 On
July 8, 2020, we entered into certain exchange agreement with the Lender, pursuant to which the Company and the Lender agreed to (i)
partition a new promissory note in the original principal amount equal to $250,000 from the outstanding balance of certain promissory
note that the Company issued to the Lender on December 30, 2019, which has an original principal amount of $1,670,000, and (ii) exchange
the partitioned promissory note for the issuance of 453,161 shares of the Company's common stock, par value $0.001 per share to
the Lender.

 On
July 29, 2020, we entered into a seventh exchange agreement (the "Seventh Exchange Agreement") with the Lender, pursuant
to which the Company and the Lender agreed to (i) partition a new promissory note in the original principal amount equal to $365,000
from the outstanding balance of certain promissory note that the Company issued to the Lender on July 24, 2019, which has an original
principal amount of $1,395,000, and (ii) exchange the partitioned promissory note for the issuance of 576,802 shares of the Company's
common stock, par value $0.001 per share to the Lender.

 On
October 12, 2020, we entered into an amendment to promissory notes (the "Amendment") with the Lender, pursuant to which the
Lender has the right at any time until the outstanding balance of the notes has been paid in full, at its election, to convert all or
any portion of the outstanding balance of the notes into shares of common stock of the Company. The conversion price for each conversion
will be calculated pursuant to the following formula: 80% multiplied by the lowest closing price of the Company common stock during the
ten (10) trading days immediately preceding the applicable conversion. Notwithstanding the foregoing, in no event will the conversion
price be less than $1.00.

to the Amendment, on October 13, 2020, we exchanged part of the outstanding balances of the notes for the issuance of 709,329 shares
of the Company's common stock, par value $0.001 per share to the Lender.

 On
October 20, 2020, the Company exchanged the remaining balance of $778,252 under the notes for the issuance of 329,768 shares of common
stock, par value $0.001 per share to the Lender.

 On
November 5, 2020, Tillicum Investment Company Limited entered into an agreement with CBAK Nanjing and Shenzhen ESTAR Industrial Company
Limited (the Company's equipment supplier) whereby Shenzhen ESTAR Industrial Company Limited assigned its rights to the unpaid
equipment cost owed by CBAK Power of approximately $$11.17 million (RMB75,000,000) (the "Seventh Debt") to Tillicum Investment
Company Limited.

 On
November 11, 2020, we entered into a cancellation agreement with Tillicum Investment Company Limited. Pursuant to the terms of the cancellation
agreement, Tillicum Investment Company Limited agreed to cancel the Seventh Debt in exchange for 3,192,291 shares of common stock of
the Company, at an exchange price of $3.5 per share. Upon receipt of the shares, the creditor released the Company from any claims, demands
and other obligations relating to the Seventh Debt.

 On
December 8, 2020, we entered into a securities purchase agreement with certain institutional investors, pursuant to which we issued in
a registered direct offering, an aggregate of 9,489,800 shares of common stock of the Company at a per share purchase price of $5.18,
and warrants to purchase an aggregate of 3,795,920 shares of common stock of the Company at an exercise price of $6.46 per share exercisable
for 36 months from the date of issuance (collectively, the "2020 Warrants"), for gross proceeds of approximately $49.16 million,
before deducting fees to the placement agent and other offering expenses payable by the Company.

 On
February 8, 2021, we entered into another securities purchase agreement with the same investors, pursuant to which we issued in a registered
direct offering, an aggregate of 8,939,976 shares of common stock of the Company at a per share purchase price of $7.83. In addition,
we issued to the investors (i) in a concurrent private placement, the Series A-1 warrants to purchase a total of 4,469,988 shares of
common stock, at a per share exercise price of $7.67 and exercisable for 42 months from the date of issuance; (ii) in the registered
direct offering, the Series B warrants to purchase a total of 4,469,988 shares of common stock, at a per share exercise price of $7.83
and exercisable for 90 days from the date of issuance; and (iii) in the registered direct offering, the Series A-2 warrants to purchase
up to 2,234,992 shares of common stock, at a per share exercise price of $7.67 and exercisable for 45 months from the date of issuance.
We received gross proceeds of approximately $70 million from the registered direct offering and the concurrent private placement, before
deducting fees to the placement agent and other offering expenses payable by the Company.

 On
May 10, 2021, we entered into that Amendment No. 1 to the Series B Warrant (the "Series B Warrant Amendment") with each of
the holders of the Company's outstanding Series B warrants. Pursuant to the Series B Warrant Amendment, the term of the Series
B warrants was extended from May 11, 2021 to August 31, 2021.

 As
of August 31, 2021, we had not received any notices from investors to exercise the Series B warrants, which, along with the Series A-2
warrants, had expired. As of December 31, 2023, we had not received any notices from investors to exercise the 2020 Warrants, which had
also expired. As of December 31, 2024, we had no warrants outstanding.

 We
currently are expanding our product lines and manufacturing capacity in our Dalian, Nanjing and Zhejiang facilities, which require more
funding to finance the expansion. We may also require additional cash due to changing business conditions or other future developments,
including any investments or acquisitions we may decide to pursue. We plan to renew our bank loans upon maturity, if required, and plan
to raise additional funds through bank borrowings and equity financing in the future to meet our daily cash demands, if required. However,
there can be no assurance that we will be successful in obtaining such financing. If our existing cash and bank borrowing are insufficient
to meet our requirements, we may seek to sell equity securities, debt securities or borrow from lending institutions. We can make no
assurance that financing will be available in the amounts we need or on terms acceptable to us, if at all. The sale of equity securities,
including convertible debt securities, would dilute the interests of our current shareholders. The incurrence of debt would divert cash
for working capital and capital expenditures to service debt obligations and could result in operating and financial covenants that restrict
our operations and our ability to pay dividends to our shareholders. If we are unable to obtain additional equity or debt financing as
required, our business operations and prospects may suffer.

table sets forth a summary of our cash flows for the periods indicated:

 (All
amounts in thousands of U.S. dollars)

 Year
 Ended

 2023

 2024

 Net cash provided by operating
 activities

 $
 46,507

 $
 39,704

 Net cash used in investing activities

 (42,310
)

 (23,432
)

 Net cash provided by (used in) financing activities

 18,615

 (11,686
)

 Effect of exchange rate
 changes on cash and cash equivalents and restricted cash

 (1,345
)

 (2,623
)

 Net increase in cash and cash equivalents and
 restricted cash

 21,467

 1,963

 Cash and cash equivalents and restricted cash
 at the beginning of the year

 37,356

 58,823

 Cash and cash equivalents
 and restricted cash at the end of the year

 $
 58,823

 $
 60,786

Activities

 Net cash provided by operating activities was $39.7
million for the year ended December 31, 2024. The net cash provided by operating activities was mainly attributable to our net income
of $23.4 million (before loss on disposal of property, plant and equipment, impairment charge of long-lived assets, share of loss of equity
investee, gain on disposal of equity investee and excluding non-cash depreciation and amortization, write-down of inventories, share-based
compensation and changes in expected credit losses), increase of our trade and bills payable by $4.6 million, an increase of accrued expenses
and other payables and product warranty provision of $23.7 million, decrease of inventories by $6.3 million offset by increase of trade
and bills receivable of $5.4 million, increase of prepayment and other receivables of $12.4 million.

 Net
cash provided by operating activities was $46.5 million in the year ended December 31, 2023. The net cash provided by operating activities
was mainly attributable to our net income of $17.1 million (before loss on disposal of property, plant and equipment, impairment charge
of long-lived assets, impairment loss of equity investee and excluding non-cash depreciation and amortization, write-down of inventories,
share-based compensation and changes in fair value of warrants liability), increase of trade and bills payable by $16.8 million, a decrease
of inventories of $11.2 million, a decrease of trade receivable from Shenzhen BAK Battery Co., Ltd. ("Shenzhen BAK") of $5.4
million, offset by an increase of trade and bills receivable of $3.0 million.

 Investing
Activities

 Net
cash used in investing activities was $23.4 million in the fiscal year ended December 31, 2024. The net cash used in investing activities
comprised the purchases of property, plant and equipment and construction in progress $17.2 million and $9.1 million on deposit paid
for acquisition of long-term investments offset by $2.3 million received from PRC government for funding our capital expenditure.

 Net
cash used in investing activities was $42.3 million in the fiscal year ended December 31, 2023. The net cash used in investing activities
comprised the purchases of property, plant and equipment and construction in progress $31.1 million, $4.0 million on investment in equity
method investment and $7.1 million on deposit paid for acquisition of long-term investments.

 Financing
Activities

 Net
cash used in financing activities was $11.7 million in the fiscal year ended December 31, 2024. The net cash used in financing activities
was mainly comprised of repayment of bank borrowings of $52.1 million, $2.8 million repayment on finance lease and $4.3 million net movement
from the placement of term deposit offset by $46.4 million bank borrowings and $1.1 million from finance lease.

 Net
cash provided by financing activities was $18.6 million in the fiscal year ended December 31, 2023. The net cash provided by financing
activities mainly comprised $36.1 million bank borrowings, and $1.7 million from finance leases, partially offset by repayment of bank
borrowings of $18.0 million and $0.9 million repayment on finance lease.

 As
of December 31, 2024, the principal amounts outstanding under our credit facilities and lines of credit were as follows:

 (All
amounts in thousands of U.S. dollars)

 Maximum

 amount

 available

 borrowed

 Long-term credit facilities:

 Shaoxing Branch of Bank of Communications
 Co., Ltd

 $
 21,922

 $
 21,909

 Short-term credit facilities:

 Zhejiang Shangyu Rural Commercial Bank

 2,055

 2,055

 China Zheshang Bank Co., Ltd. Shangyu Branch

 China Everbright Bank
 Co., Ltd. Shaoxing Branch

 1,370

 1,370

 4,178

 4,178

 Other lines of credit:

 China Zheshang Bank Co., Ltd. Shenyang Branch

 28,874

 28,874

 Bank of Nanjing Gaochun Branch

 5,089

 5,089

 China Zheshang Bank Co., Ltd. Shenyang Branch

 7,615

 7,615

 China Zheshang Bank Co., Ltd Shangyu Branch

 9,182

 9,182

 Bank of Communications
 Co., Ltd Shaoxing Branch

 6,537

 6,537

 57,297

 57,297

 Total

 $
 83,397

 $
 83,384

 Capital
Expenditures

 We
incurred capital expenditures of $17.2 million and $31.1 million in the fiscal years ended December 31, 2024 and 2023, respectively.
Our capital expenditures in 2024 were primarily allocated to the construction of our Dalian, Nanjing and Zhejiang facilities. The table
below sets forth the breakdown of our capital expenditures by use for the periods indicated.

 (All
amounts in thousands of U.S. dollars)

 Year
 Ended

 2023

 2024

 Purchase of property, plant and
 equipment and construction in progress

 $
 31,141

 $
 17,187

 We estimate that our total capital expenditures in
fiscal year 2025 will reach approximately $50 million. Such funds will be used to construct new plants with new production lines and battery
module packing lines.

 Critical
Accounting Policies and Estimates

 Our
consolidated financial information has been prepared in accordance with U.S. GAAP, which requires us to make judgments, estimates and
assumptions that affect (1) the reported amounts of our assets and liabilities, (2) the disclosure of our contingent assets and liabilities
at the end of each fiscal period and (3) the reported amounts of revenues and expenses during each fiscal period. We continually
evaluate these estimates based on our own historical experience, knowledge and assessment of current business and other conditions, our
expectations regarding the future based on available information and reasonable assumptions, which together form our basis for making
judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the
financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree
of judgment than others in their application.

 When
reviewing our financial statements, the following should also be considered: (1) our selection of critical accounting policies, (2) the
judgment and other uncertainties affecting the application of those policies, and (3) the sensitivity of reported results to changes
in conditions and assumptions. We believe the following accounting policies involve the most significant judgment and estimates used
in the preparation of our financial statements.

 We consider
the following to be the most critical accounting policies:

 Revenue
Recognition

 We
recognize revenues when our customer obtains control of promised goods or services, in an amount that reflects the consideration which
it expects to receive in exchange for those goods. We recognize revenues following the five step model prescribed under ASU No. 2014-09:
(i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction
price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we
satisfy the performance obligation.

from product sales are recognized when the customer obtains control of our product, which occurs at a point in time, typically upon delivery
to the customer. We expense incremental costs of obtaining a contract as and when incurred if the expected amortization period of the
asset that it would have recognized is one year or less or the amount is immaterial.

from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts
with our customers.

revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the categories: discounts and
returns. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions
of accounts receivable as the amount is payable to our customer.

of Long-lived Assets

 Long-lived
assets, which include property, plant and equipment, prepaid land use rights, leased assets and intangible assets, are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

 Recoverability
of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted
future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future
cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the
asset.

 Trade
and Bills Receivable and current expected credit losses

 Trade
and bills receivable are recorded at the invoiced amount, net of allowances for doubtful accounts and sales returns. The allowance for
doubtful accounts is the Company's best estimate of the amount of probable credit losses in the Company's existing trade
accounts receivable.

 In
June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses, which introduces an approach based on expected losses
to estimate credit losses on certain types of financial instruments, including, but not limited to, trade and other receivables and net
investments in leases. The Company assessed that trade receivable and other current assets are within the scope of ASC 326. The Company
has identified the relevant risk characteristics of trade receivables and other current assets which include size, type of the services
or the products the Company provides, or a combination of these characteristics, the historical credit loss experience, current economic
conditions, supportable forecasts of future economic conditions, and any recoveries in assessing the lifetime expected credit losses,
etc. Other key factors that influence the expected credit loss analysis include industry-specific factors that could impact the credit
quality of the Company's receivables. This is assessed at each quarter based on the Company's specific facts and circumstances.
All forward looking statements are, by their nature, subject to risks and uncertainties, many of which are beyond the Company's
control. Additionally, external data and macroeconomic factors are also considered.

 The
Company adopted this ASC 326 and several associated ASUs on January 1, 2023 using a modified retrospective approach. As of January 1,
2023, upon the adoption, the expected credit loss provision for the current assets was $2.3 million.

 The Company provides an allowance against trade receivable
based on the expected credit loss approach and writes off trade receivables when they are deemed uncollectible. The Company considers
the historical credit loss experience, customer specific facts and economic conditions in assessing the expected credit losses. Other
key factors that influence the expected credit loss analysis include customer demographics, payment terms offered in the normal course
of business to customers, and industry-specific factors that could impact the Company's receivables. Additionally, external data
and macroeconomic factors are also considered. This is assessed at each quarter based on the Company's specific facts and circumstances.

 Outstanding trade receivable balances are reviewed
individually for collectability. Trade receivable balances are charged off against the allowance after all means of collection have been
exhausted and the potential for recovery is considered remote.

are stated at the lower of cost or net realizable value. The cost of inventories is determined using the weighted average cost method,
and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In case of
finished goods and work in progress, cost includes an appropriate share of production overhead based on normal operating capacity. Net
realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion,
disposal, and transportation.

 We
record adjustments to its inventory for estimated obsolescence or diminution in net realizable value equal to the difference between
the cost of the inventory and the estimated net realizable value. At the point of loss recognition, a new cost basis for that inventory
is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established
cost basis.

 Warranties

 We
provide a manufacturer's warranty on all our products. We accrue a warranty reserve for the products sold, which includes our best
estimate of the projected costs to repair or replace items under warranty. These estimates are based on actual claims incurred to date
and an estimate of the nature, frequency and costs of future claims. These estimates are inherently uncertain given our relatively short
history of sales of our current products, and changes to our historical or projected warranty experience may cause material changes to
the warranty reserve in the future. The portion of the warranty reserve expected to be incurred within the next 12 months is included
within accrued liabilities and other while the remaining balance is included within other long-term liabilities on the consolidated balance
sheets.

 Government
Grants

 Our
subsidiaries in China receive government subsidies from local Chinese government agencies in accordance with relevant Chinese government
policies. In general, we present the government subsidies received as part of income unless the subsidies received are earmarked to compensate
a specific expense, which have been accounted for by offsetting the specific expense, such as research and development expense, interest
expenses and removal costs. Unearned government subsidies received are deferred for recognition until the criteria for such recognition
could be met.

 Grants
applicable to land are amortized over the life of the depreciable facilities constructed on it. For research and development expenses,
we match and offset the government grants with the expenses of the research and development activities as specified in the grant approval
document in the corresponding period when such expenses are incurred.

 Share-based
Compensation

 We
adopted the provisions of ASC Topic 718 which requires us to measure and recognize compensation expenses for an award of an equity instrument
based on the grant-date fair value. The cost is recognized over the vesting period (or the requisite service period). ASC Topic 718 also
requires us to measure the cost of a liability classified award based on its current fair value. The fair value of the award will be
remeasured subsequently at each reporting date through the settlement date. Changes in fair value during the requisite service period
are recognized as compensation cost over that period. Further, ASC Topic 718 requires us to estimate forfeitures in calculating the expense
related to stock-based compensation.

 The
fair value of each option award is estimated on the date of grant using the Black-Scholes Option Valuation Model. The expected volatility
was based on the historical volatilities of our listed common stocks in the United States and other relevant market information. We use
historical data to estimate share option exercises and employee departure behavior used in the valuation model. The expected terms of
share options granted is derived from the output of the option pricing model and represents the period of time that share options granted
are expected to be outstanding. Since the share options once exercised will primarily trade in the U.S. capital market, the risk-free
rate for periods within the contractual term of the share option is based on the U.S. Treasury yield curve in effect at the time of grant.

 Warrant
Liability

 For
warrants that are not indexed to the Company's stock, the Company records the fair value of the issued warrants as a liability
at each balance sheet date and records changes in the estimated fair value as a non-cash gain or loss in the consolidated statement of
operations and comprehensive income. The warrant liability is recognized in the balance sheet at the fair value (level 3). The fair value
of these warrants has been determined using the Binomial model.

 Changes
in Accounting Standards

 Please
refer to note 2 to our consolidated financial statements, "Summary of Significant Accounting Policies and Practices–Recently
Adopted Accounting Standards," for a discussion of relevant pronouncements.

 Exchange
Rates

 The
financial records of our PRC subsidiaries are maintained in RMB. In order to prepare our financial statements, we have translated RMB
amounts into U.S. dollars. The amounts of our assets and liabilities on our balance sheets are translated using the closing exchange
rate as of the date of the balance sheet. Revenues, expenses, gains and losses are translated using the average exchange rate prevailing
during the period covered by such financial statements. Adjustments resulting from the translation, if any, are included in our cumulative
other comprehensive income in our stockholders' equity section of our balance sheet. All other amounts that were originally booked
in RMB and translated into U.S. dollars were translated using the closing exchange rate on the date of recognition. Consequently, the
exchange rates at which the amounts in those comparisons were computed varied from year to year.

 The exchange
rates used to translate amounts in RMB into U.S. dollars in connection with the preparation of our financial statements were as follows:

 RMB per U.S.
 Dollar

 Fiscal
 Year Ended

 2023

 2024

 Balance sheet items, except for
 equity accounts

 7.0971

 7.2994

 Amounts
 included in the statement of income and comprehensive loss and statement of cash flows

 7.0719

 7.1913

 ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 Not applicable.

 ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 FINANCIAL
STATEMENTS

 CBAK
ENERGY TECHNOLOGY, INC. AND SUBSIDIARIES

 CONSOLIDATED
FINANCIAL STATEMENTS

 FOR
THE YEARS ENDED

 DECEMBER
31, 2023 AND 2024

 CBAK

 AND
SUBSIDIARIES

 TABLE
OF CONTENTS

 Contents

 Page(s)

 Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 3299)

 Consolidated Balance Sheets as of December 31, 2023 and 2024

 Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2023 and 2024

 Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 2023 and 2024

 Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2024

 Notes to the Consolidated Financial Statements

 F-12 - F-64

 F- 1

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

 To the Shareholders and the Board of Directors
of CBAK Energy Technology, Inc.

 Opinion on the Financial Statements

 We have audited the accompanying consolidated
balance sheets of CBAK Energy Technology, Inc. and subsidiaries (the "Company") as of December 31, 2023 and 2024, and the
related consolidated statements of operations and comprehensive income (loss), changes in shareholders' equity and cash flows for
each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the "consolidated
financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated
financial position of the Company as of December 31, 2023 and 2024, and the consolidated results of its operations and its cash flows
for each of the two years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.

 We have also audited, in accordance with the standards
of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of
December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated March 17, 2025, expressed an adverse opinion on the Company's internal control
over financial reporting because of material weaknesses.

 Going Concern

 The accompanying consolidated financial statements
have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements,
the Company has a working capital deficiency, accumulated deficit from recurring net losses incurred for the prior years and significant
short-term debt obligations maturing in less than one year as of December 31, 2024. All these factors raise substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these matters are also discussed in Note 1 to the consolidated
financial statements. These consolidated financial statements do not include any adjustments that might result from the outcome of this
uncertainty.

 Basis for Opinion

 These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial
statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect
to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.

 We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks
of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 F- 2

 We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial
reporting was maintained in all material respects.

 Critical Audit Matters

 The critical audit matters communicated below
are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated
to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and
(2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter
in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit
matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

 Going concern

 The accompanying consolidated financial statements
have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements,
the Company has a working capital deficiency, accumulated deficit from recurring net losses from prior years and significant short-term
debt obligations maturing in less than one year as of December 31, 2024. The Company has contractual obligations such as commitments for
purchases of equipment, building constructions cost, payable, capital injection to subsidiaries and short-term loan (collectively "obligations").
Currently management's forecasts and related assumptions illustrate their ability to meet the obligations through management of
expenditures and, if necessary, obtaining additional debt financing, loans from existing directors and shareholders and private placements
of capital stock for additional funding to meet its operating needs. Should there be constraints on the ability to access such financing,
the Company can manage cash outflows to meet the obligations through reductions in capital expenditures and other operating expenditures.

 We identified management's assessment of
the Company's ability to continue as a going concern as a critical audit matter. Management made judgments to conclude that it is
probable that the Company's plans will be effectively implemented and will provide the necessary cash flows to fund the Company's
obligations as they become due. Specifically, the judgments with the highest degree of impact and subjectivity in determining it is probable
that the Company's plans will be effectively implemented included the revenue growth and gross margin assumptions underlying its
forecast operating cash flows, its ability to reduce capital expenditures and other operating expenditures, its ability to access funding
from the capital market and its ability to obtaining loans from existing directors and shareholders. Auditing the judgments made by management
required a high degree of auditor judgment and an increased extent of audit effort.

 Addressing the matter involved performing procedures
and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures
included the following, among others: (i) testing the effectiveness of controls relating to management's assessment of the Company's
ability to continue as a going concern, including controls relating to evaluate the appropriateness of management's process for developing
the estimates of forecast operating cash flows; (ii) testing key assumptions underlying management's forecast operating cash flows,
including revenue growth, gross margin and operating expenses assumptions; (iii) evaluating the probability that the Company will be able
to access funding from the capital market; (iv) evaluating the probability that the Company will be able to reduce capital expenditures
and other operating expenditures if required; and (v) evaluating the probability that the Company will be able to obtain the loan from
existing directors and shareholders.

 F- 3

 Inventory write-down

 As described in Note 6 of the consolidated financial
statements, inventories are stated at the lower of cost or net realizable value, with cost determined on a weighted average cost method.
Write-down of potential obsolete or slow moving inventories is recorded based on management's assumptions about future demands and
market conditions. For the year ended December 31, 2024, the Company recorded inventory write-downs of $4.9 million. Inventories include
items that have been written down to the Company's best estimate of their realizable value, which includes consideration of various
factors.

 We identified the inventory write-down as a critical
audit matter. The Company's determination of future markdowns is subjective. Specifically, there was a high degree of subjective
auditor judgment in evaluating how the Company's merchandising strategy and related inventory markdown assumptions affected the
realizable value of inventory.

 Addressing the matter involved performing procedures
and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures
included the following, among others: (i) testing the effectiveness of controls relating to management's assessment on inventory
write-down process, including controls relating to evaluate the appropriateness of management's process for developing the estimates of
net realizable value; (ii) observing the physical condition of inventories during inventory counts; (iii) testing the reasonableness of
the assumptions about quality, damages, future demand, selling prices and market conditions by considering with historical trends and
consistency with evidence obtained in other areas of the audit; and corroborating the assumptions with individuals within the product
team; and (iv) assessing the Company's adjustments of inventory costs to net realizable value for slow-moving and obsolete inventories
by (1) comparing the historical estimate for net realizable value adjustments to actual adjustments of inventory costs, and (2) analyzing
sales subsequent to the measurement date.

 Assessment of impairment of long-lived assets

 As discussed in Note 2 (k), Note 8, 11 and 12
to the consolidated financial statements, the Company reviews long-lived assets for impairment whenever events or changes in circumstances
indicate the carrying value of these assets may not be recoverable. Recoverability of long-lived assets to be held and used is measured
by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset.
If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount
by which the carrying amount of the asset exceeds the fair value of the asset. Fair value is generally measured based on either quoted
market prices, if available, or discounted cash flow analyses. Based upon the analysis performed, the Company recognized impairment losses
for long-lived assets of $0.5 million for the year ended December 31, 2024.

 We identified the assessment of impairment of
long-lived assets as a critical audit matter because of the significant estimates and assumptions management used in the projections of
future cash flows, including the expected production and sales volumes, production costs, operating expenses and discount rates applied
to these forecasted future cash flows. Performing audit procedures to evaluate the reasonableness of these estimates and assumptions required
a high degree of auditor judgment and an increased extent of effort.

 F- 4

 Addressing the matter involved performing procedures
and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures
included the following, among others: (i) testing the effectiveness of controls relating to management's impairment assessment on
of long-lived assets, including controls relating to fair value determination of the long-lived assets; (ii) evaluating the appropriateness
of the valuation model, by reviewing the valuation report and the calculation schedules prepared by the management and third party valuation
specialists engaged by the Company (iii) comparing the methodology used by the Company, that is, recoverable amount calculations based
on future discounted cash flows, to industry practice and testing the completeness and accuracy of the underlying data used in the projections;
(iv) assessing the reasonableness of the significant assumptions used in the calculations, which comprised of, amongst others, expected
production and sales volumes, production costs, operating expenses and discount rates, by comparing them to external industry outlook
reports from a number of sources and by analyzing the historical accuracy of management's estimates; (v) evaluating the competence,
capabilities and objectivity of the professionals engaged by the Company; and (vi) involving our valuation specialists to assist us with
assessing the appropriateness of the valuation methodologies and the reasonableness of assumptions used, including the discount rates.

 Assessment of allowance for current expected
credit losses ("CECL")

 As discussed in Note 2 (e), Note 5 and 7, the
Company assessed that trade receivable and other current assets are within the scope of ASC 326. The Company has identified the relevant
risk characteristics of trade receivables and other current assets which include size, type of the services or the products the Company
provides, or a combination of these characteristics, the historical credit loss experience, current economic conditions, supportable forecasts
of future economic conditions, and any recoveries in assessing the lifetime expected credit losses, etc. Other key factors that influence
the expected credit loss analysis include industry-specific factors that could impact the credit quality of the Company's receivables.
This is assessed at each quarter based on the Company's specific facts and circumstances. All forward looking statements are, by
their nature, subject to risks and uncertainties, many of which are beyond the Company's control. Additionally, external data and
macroeconomic factors are also considered. As of December 31, 2024, the expected credit loss provision recorded in current assets was
$3.1 million.

 We identified the assessment of allowances for
CECL as a critical audit matter due to the involvement of subjective judgment and management estimates in evaluating the CECL of the current
asset items, and the significance to the Company's consolidated financial position.

 Addressing the matter involved performing procedures
and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures
included the following, among others: (i) testing the effectiveness of controls relating to the assessment of allowances for CECL and
assessing management's method for developing the allowance for doubtful accounts (credit losses); (ii) evaluating the appropriateness
of the valuation model, by reviewing the valuation report and the calculation schedules prepared by the management and third party valuation
specialists engaged by the Company; (iii) testing the accuracy of management's basic input in calculating CECL including aging report,
historical write-offs and recoveries, on a sample basis; (iv) engaging independent valuation specialist with specialized skills and knowledge,
to evaluate the reasonableness of significant assumptions and judgments made by management to estimate the allowance for credit loss,
including the Company's assessment on significant factors, and the basis of estimated loss rates applied with reference to historical
default rates and forward-looking information; (v) sending confirmations to debtors to confirm the accuracy of the basic information and
other receivable accounts; (vi) evaluating subsequent collections occurring after the balance sheet date; and (vii) evaluating the competence,
capabilities and objectivity of the professionals engaged by the Company.

 /s/ ARK Pro CPA & Co

 We have served as the Company's auditor since
2023.

 Hong Kong, China

 PCAOB ID: 3299

 F- 5

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

 To the Shareholders and the Board of Directors
of CBAK Energy Technology, Inc.

 Opinion on Internal Control over Financial Reporting

 We have audited CBAK Energy Technology, Inc. and
subsidiaries' internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our
opinion, because of the effect of the material weaknesses described below on the achievement of the objectives of the control criteria,
CBAK Energy Technology, Inc. and subsidiaries (the "Company") has not maintained effective internal control over financial
reporting as of December 31, 2024, based on the COSO criteria.

 A material weakness is a deficiency, or combination
of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement
of the company's annual or interim financial statements will not be prevented or detected on a timely basis. The following material
weaknesses have been identified and included in management's assessment:

 The Company did not have appropriate policies
and procedures in place to evaluate the proper accounting and disclosures of key documents and agreements, and there was insufficient
accounting personnel with an appropriate level of technical accounting knowledge and experience in the application of accounting principles
generally accepted in the United States of America, or U.S. GAAP, commensurate with the financial reporting requirements.

 We also have audited, in accordance with the standards
of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December
31, 2023 and 2024, the related consolidated statements of operations and comprehensive loss, changes in shareholders' equity and
cash flows for each of the two years in the period ended December 31, 2024, and the related notes. These material weaknesses were considered
in determining the nature, timing and extent of audit tests applied in our audit of the 2024 consolidated financial statements, and this
report does not affect our report dated March 17, 2025, which expressed an unqualified opinion thereon.

 Basis for Opinion

 The Company's management is responsible
for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over
financial reporting, included in the Management's Annual Report on Internal Control over Financial Reporting. Our responsibility
is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting
firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 F- 6

 We conducted our audit in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material respects.

 Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists,
and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis
for our opinion.

 Definition and Limitations of Internal Control over Financial Reporting

 A company's internal control over financial
reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control
over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and
that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition
of the company's assets that could have a material effect on the financial statements.

 Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.

 /s/ ARK
Pro CPA & Co

 We have served as the Company's auditor since
2023.

 Hong Kong, China

 PCAOB ID: 3299

 F- 7

 CBAK
Energy Technology, Inc. and Subsidiaries

Balance Sheets

 As
of December 31, 2023 and 2024

 (In
US$ except for number of shares)

 Note

 2023

 2024

 Assets

 Current

 Cash
 and cash equivalents

 $
 4,643,267

 $
 6,724,360

 Pledged
 deposits

 54,179,549

 54,061,642

 Term
 deposits

 -

 4,237,090

 Trade
 and bills receivable, net

 28,653,047

 32,938,918

 33,413,422

 22,851,027

 Prepayments
 and other receivables

 7,459,254

 20,004,966

 Receivables
 from former subsidiary

 74,946

 12,399

 tax recoverable

 -

 566,458

 Total
 current assets

 128,423,485

 141,396,860

 Property,
 plant and equipment, net

 91,628,832

 85,486,829

 in progress

 37,797,862

 42,526,859

 Long-term
 investments, net

 2,565,005

 2,246,494

 Prepaid
 land use rights

 11,712,704

 11,075,973

 Intangible
 assets, net

 841,360

 382,962

 Deposit
 paid for acquisition of long-term investments

 7,101,492

 15,864,318

 lease right-of-use assets, net

 1,084,520

 3,237,849

 Total

 $
 281,155,260

 $
 302,218,144

 Liabilities

 Current
 liabilities

 Trade
 and bills payable

 $
 82,429,575

 84,724,386

 Short-term
 bank borrowings

 32,587,676

 26,087,350

 Other
 short-term loans

 339,552

 335,715

 Accrued
 expenses and other payables

 41,992,540

 58,285,635

 Payable
 to a former subsidiary, net

 411,111

 419,849

 government grants, current

 375,375

 556,214

 warranty provisions

 23,870

 23,426

 liability

 -

 -

 lease liability, current

 691,992

 1,268,405

 lease liability, current

 1,643,864

 -

 Total
 current liabilities

 160,495,555

 171,700,980

 government grants, non-current

 6,203,488

 7,580,255

 warranty provisions

 522,574

 420,688

 lease liability, non-current

 475,302

 2,449,056

 Total
 liabilities

 167,696,919

 182,150,979

 Commitments
 and contingencies

 Shareholders'
 equity

 Common stock $ 0.001 par value; 500,000,000 authorized; 90,063,396 issued
and 89,919,190 outstanding as of December 31, 2023; and 90,083,396 issued and 89,939,190 outstanding as of December 31, 2024

 90,063

 90,083

 Donated shares

 Additional
 paid-in capital

 247,465,817

 247,842,445

 Statutory
 reserves

 Accumulated
 deficit

 ( 134,395,762
)

 ( 122,605,730
)

 Accumulated
 other comprehensive loss

 ( 11,601,403
)

 ( 14,919,345
)

 116,890,915

 125,739,653

 Less:
 Treasury shares

)

)

 Total
 shareholders' equity

 112,824,305

 121,673,043

 Non-controlling
 interests

 634,036

 ( 1,605,878
)

 Total
 equity

 113,458,341

 120,067,165

 Total
 liabilities and shareholder's equity

 $
 281,155,260

 $
 302,218,144

 See
accompanying notes to the consolidated financial statements.

 F- 8

 CBAK
Energy Technology, Inc. and Subsidiaries

Statements of Operations and Comprehensive Income (Loss)

 For

 (In
US$ except for number of shares)

 Year
 ended

 Year
 ended

 Note

 2023

 2024

 Net revenues

 $

 $

 Cost of revenues

 ( 172,714,042
)

 ( 134,839,364
)

 Gross profit

 31,724,323

 41,775,245

 Operating expenses:

 Research and development

 ( 11,928,070
)

 ( 13,010,082
)

 Sales and marketing expenses

 ( 4,903,926
)

 ( 5,197,888
)

 General and administrative

 ( 13,789,108
)

 ( 13,947,727
)

 Impairment charge on long-lived

 ( 7,070,236
)

 ( 475,220
)

 Allowance
 of credit losses and bad debts written off

 ( 1,284,795
)

 ( 356,179
)

 Total
 operating expenses

 ( 38,976,135
)

 ( 32,987,096
)

 Operating (loss) income

 ( 7,251,812
)

 8,788,149

 Finance income, net

 432,900

 1,283,090

 Other income, net

 3,023,238

 1,045,552

 Impairment charges on equity investee

 ( 2,366,080
)

 -

 Share of loss of equity investee

 ( 27,428
)

 ( 18,777
)

 Gain on disposal on equity investee

 -

 45,749

 Changes in fair value
 of warrants liability

 136,000

 -

 Loss (income) before income tax

 ( 6,053,182
)

 11,143,763

 Income tax expenses

 ( 2,486,145
)

 ( 1,558,613
)

)

 Less: Net loss attributable
 to non-controlling interests

 6,090,270

 2,204,882

 Net
 (loss) income attributable to shareholders of CBAK Energy Technology, Inc.

 $
)

 $

)

 Other comprehensive loss

 –
 Foreign currency translation adjustment

 ( 3,606,576
)

 ( 3,352,974
)

 Comprehensive (loss) income

 ( 12,145,903
)

 6,232,176

 Less:
 Comprehensive loss attributable to non-controlling interests

 6,249,087

 2,239,914

 Comprehensive
 (loss) income attributable to CBAK Energy Technology, Inc.

 $
 ( 5,896,816
)

 $
 8,472,090

 (Loss) income per share

 – Basic

 $
 ( 0.03
)

 $
 0.13

 – Diluted

 $
 ( 0.03
)

 $
 0.13

 Weighted average number of shares of common stock:

 – Basic

 89,252,085

 89,928,357

 – Diluted

 89,252,085

 90,158,312

 See
accompanying notes to the consolidated financial statements.

 F- 9

 CBAK
Energy Technology, Inc. and Subsidiaries

Statements of Changes in Shareholders' Equity

 For
the years ended 2023 and 2024

 (In
US$ except for number of shares)

 Common
 stock issued

 Additional

 Statutory

 Accumulated
 other

 Non-

 Treasury
 shares

 Total

 Number

 Donated

 paid-in

 reserves

 Accumulated

 comprehensive

 controlling

 Number

 shareholders'

 of shares

 shares

 capital

 (Note 22)

 deficit

 (loss)

 interests

 of shares

 equity

 as of January 1, 2023

 89,135,064

 $
 89,135

 $

 $
 246,240,998

 $

 $
 ( 131,946,705
)

 $
 ( 8,153,644
)

 $
 6,883,123

 ( 144,206
)

 $
)

 $
 124,378,497

 Net
 loss

 -

 -

 -

 -

 -

)

 -

 ( 6,090,270
)

 -

 -

)

 Share-based
 compensation for employee and director stock awards

 -

 -

 -

 1,225,747

 -

 -

 -

 -

 -

 -

 1,225,747

 Common
 stock issued to employees and directors for stock award

 928,332

 -

 ( 928
)

 -

 -

 -

 -

 -

 -

 -

 currency translation adjustment

 -

 -

 -

 -

 -

 -

 ( 3,447,759
)

 ( 158,817
)

 ( 3,606,576
)

 as of December 31, 2023

 90,063,396

 $
 90,063

 $

 $
 247,465,817

 $

 $
 ( 134,395,762
)

 $
 ( 11,601,403
)

 $
 634,036

 ( 144,206
)

 $
)

 $
 113,458,341

 Net
 income (loss)

 -

 -

 -

 -

 -

 -

 ( 2,204,882
)

 -

 -

 Share-based
 compensation for employee and director stock awards

 -

 -

 -

 376,648

 -

 -

 -

 -

 -

 -

 376,648

 Common
 stock issued to employees and directors for stock award

 20,000

 -

 ( 20
)

 -

 -

 -

 -

 -

 -

 -

 currency translation adjustment

 -

 -

 -

 -

 -

 -

 ( 3,317,942
)

 ( 35,032
)

 ( 3,352,974
)

 as of December 31, 2024

 90,083,396

 $
 90,083

 $

 $
 247,842,445

 $

 $
 ( 122,605,730
)

 $
 ( 14,919,345
)

 $
 ( 1,605,878
)

 ( 144,206
)

 $
)

 $
 120,067,165

 See
accompanying notes to the consolidated financial statements.

 F- 10

 CBAK
Energy Technology, Inc. and subsidiaries

statements of cash flows

 For

 (In
US$)

 Year Ended

 Year Ended

 2023

 2024

 Cash flows from operating activities

 $
)

 Adjustments to reconcile net (loss) income to net cash provided by operating activities:

 Depreciation and amortization

 9,695,472

 7,954,793

 Allowance for credit losses

 1,271,730

 ( 264,181
)

 Write-down of inventories

 3,554,962

 4,927,140

 Share-based compensation

 1,225,747

 376,648

 Changes in fair value of warrants liability

 ( 136,000
)

 -

 Loss on disposal of property, plant and equipment

 544,481

 428,308

 Impairment charge on long-lived assets

 7,070,236

 475,220

 Impairment loss of an equity investee

 2,366,080

 -

 Share of loss of an equity investee

 27,428

 18,777

 Gain on disposal of an equity investee

 -

 ( 45,749
)

 Amortization of operating lease right-of-use assets

 640,375

 1,215,995

 Changes in operating assets and liabilities:

 Trade and bills receivable

 ( 2,960,147
)

 ( 5,376,670
)

 11,207,281

 6,295,598

 Prepayments and other receivables

 ( 2,050,039
)

 ( 12,462,243
)

 Trade and bills payable

 16,785,569

 4,648,150

 Accrued expenses and other payables and product warranty provisions

 ( 2,490,859
)

 23,749,383

 Lease liabilities

 347,511

 ( 2,433,194
)

 Trade receivable from and payables to a former subsidiary

 5,359,249

 61,379

 Income tax recoverable

 157,434

 549,956

 Deferred tax assets

 2,429,726

 -

 Net cash provided by operating activities

 46,506,909

 39,704,460

 Cash flows from investing activities

 Deposit paid for acquisition of long-term investment

 ( 7,126,798
)

 ( 9,094,322
)

 Purchases of property, plant and equipment and construction in progress

 ( 31,140,550
)

 ( 17,186,872
)

 Proceeds on disposal of property, plant and equipment

 1,139

 215,320

 Investment in equity method investment

 ( 4,044,175
)

 -

 Proceeds from disposal of an equity method investee

 -

 278,114

 Government subsidy

 -

 2,355,555

 Net cash used in investing activities

 ( 42,310,384
)

 ( 23,432,205
)

 Cash flows from financing activities

 Proceeds from bank borrowings

 36,125,794

 46,395,506

 Repayment of bank borrowings

 ( 17,986,680
)

 ( 52,076,815
)

 Repayment of borrowings from unrelated parties

 ( 277,466
)

 -

 Borrowings from a shareholder

 199,942

 -

 Repayment of borrowings from shareholders

 ( 258,316
)

 ( 2,781
)

 Proceeds from finance leases

 1,696,857

 1,112,455

 Principal payments on finance leases

 ( 884,911
)

 ( 2,814,095
)

 Placement of term deposits

 -

 ( 39,525,810
)

 Withdrawal of term deposits

 -

 35,225,027

 Net cash provided by (used in) financing activities

 18,615,220

 ( 11,686,513
)

 Effect of exchange rate changes on cash and cash equivalents and restricted cash

 ( 1,345,005
)

 ( 2,622,556
)

 Net increase in cash and cash equivalents and restricted cash

 21,466,740

 1,963,186

 Cash and cash equivalents and restricted cash at the beginning of year

 37,356,076

 58,822,816

 Cash and cash equivalents and restricted cash at the end of year

 $
 58,822,816

 $
 60,786,002

 Supplemental non-cash investing and financing activities:

 Transfer of construction in progress to property, plant and equipment

 $
 19,538,431

 $
 5,328,646

 Lease liabilities arising from obtaining right-of-use assets

 $
 476,995

 $
 3,538,732

 Cash paid during the year for:

 Income taxes

 $
 -

 $
 2,189,247

 Interest, net of amounts capitalized

 $
 181,611

 $
 408,028

 See
accompanying notes to the consolidated financial statements.

 F- 11

 CBAK
Energy Technology, Inc. and subsidiaries

 Notes
to the consolidated financial statements

 For

 (In
US$ except for number of shares)

 1.
 Principal
 Activities, Basis of Presentation and Organization

 Principal
Activities

 CBAK
Energy Technology, Inc. (formerly known as China BAK Battery, Inc.) ("CBAK" or the "Company") is a corporation
formed in the State of Nevada on October 4, 1999 as Medina Copy, Inc. The Company changed its name to Medina Coffee, Inc. on October
6, 1999 and subsequently changed its name to China BAK Battery, Inc. on February 14, 2005. CBAK and its subsidiaries (hereinafter, collectively
referred to as the "Company") are principally engaged in the manufacture, commercialization and distribution of a wide variety
of standard and customized lithium-ion (known as "Li-ion" or "Li-ion cell") high power rechargeable batteries.
Prior to the disposal of BAK International Limited ("BAK International") and its subsidiaries (see below), the batteries
produced by the Company were for use in cellular telephones, as well as various other portable electronic applications, including high-power
handset telephones, laptop computers, power tools, digital cameras, video camcorders, MP3 players, electric bicycles, hybrid/electric
vehicles, and general industrial applications. After the disposal of BAK International and its subsidiaries on June 30, 2014, the Company
will focus on the manufacture, commercialization and distribution of high power lithium-ion rechargeable batteries for use in cordless
power tools, light electric vehicles, hybrid electric vehicles, electric cars, electric busses, uninterruptable power supplies and other
high power applications.

 The
shares of the Company traded in the over-the-counter market through the Over-the-Counter Bulletin Board from 2005 until May 31, 2006,
when the Company obtained approval to list its common stock on The NASDAQ Global Market, and trading commenced that same date under the
symbol "CBAK".

 On
January 10, 2017, the Company filed Articles of Merger with the Secretary of State of Nevada to effectuate a merger between the Company
and the Company's newly formed, wholly owned subsidiary, CBAK Merger Sub, Inc. (the "Merger Sub"). According to the
Articles of Merger, effective January 16, 2017, the Merger Sub merged with and into the Company with the Company being the surviving
entity (the "Merger"). As permitted by Chapter 92A.180 of Nevada Revised Statutes, the sole purpose of the Merger was to
effect a change of the Company's name.

 Effective
November 30, 2018, the trading symbol for common stock of the Company was changed from CBAK to CBAT. Effective at the opening of business
on June 21, 2019, the Company's common stock started trading on the Nasdaq Capital Market.

 Basis
of Presentation and Organization

 On
November 6, 2004, BAK International, a non-operating holding company that had substantially the same shareholders as Shenzhen BAK Battery
Co., Ltd ("Shenzhen BAK"), entered into a share swap transaction with the shareholders of Shenzhen BAK for the purpose of
the subsequent reverse acquisition of the Company. The share swap transaction between BAK International and the shareholders of Shenzhen
BAK was accounted for as a reverse acquisition of Shenzhen BAK with no adjustment to the historical basis of the assets and liabilities
of Shenzhen BAK.

 On
January 20, 2005, the Company completed a share swap transaction with the shareholders of BAK International. The share swap transaction,
also referred to as the "reverse acquisition" of the Company, was consummated under Nevada law pursuant to the terms of a
Securities Exchange Agreement entered by and among CBAK, BAK International and the shareholders of BAK International on January 20, 2005.
The share swap transaction has been accounted for as a capital-raising transaction of the Company whereby the historical financial statements
and operations of Shenzhen BAK are consolidated using historical carrying amounts.

 F- 12

 Also
on January 20, 2005, immediately prior to consummating the share swap transaction, BAK International executed a private placement of
its common stock with unrelated investors whereby it issued an aggregate of 1,720,087 shares of common stock for gross proceeds of $ 17,000,000.
In conjunction with this financing, Mr. Xiangqian Li, the Chairman and Chief Executive Officer of the Company ("Mr. Li")
until March 1, 2016, agreed to place 435,910 shares of the Company's common stock owned by him into an escrow account pursuant
to an Escrow Agreement dated January 20, 2005 (the "Escrow Agreement"). Pursuant to the Escrow Agreement, 50 % of the escrowed
shares were to be released to the investors in the private placement if audited net income of the Company for the fiscal year ended September
30, 2005 was not at least $ 12,000,000, and the remaining 50 % was to be released to investors in the private placement if audited net
income of the Company for the fiscal year ended September 30, 2006 was not at least $ 27,000,000. If the audited net income of the Company
for the fiscal years ended September 30, 2005 and 2006 reached the above-mentioned targets, the 435,910 shares would be released to Mr.
Li in the amount of 50% upon reaching the 2005 target and the remaining 50% upon reaching the 2006 target.

 Under
accounting principles generally accepted in the United States of America ("US GAAP"), escrow agreements such as the one established
by Mr. Li generally constitute compensation if, following attainment of a performance threshold, shares are returned to a company officer.
The Company determined that without consideration of the compensation charge, the performance thresholds for the year ended September
30, 2005 would be achieved. However, after consideration of a related compensation charge, the Company determined that such thresholds
would not have been achieved. The Company also determined that, even without consideration of a compensation charge, the performance
thresholds for the year ended September 30, 2006 would not be achieved.

 While
the 217,955 escrow shares relating to the 2005 performance threshold were previously released to Mr. Li, Mr. Li executed a further undertaking
on August 21, 2006 to return those shares to the escrow agent for the distribution to the relevant investors. However, such shares were
not returned to the escrow agent, but, pursuant to a Delivery of Make Good Shares, Settlement and Release Agreement between the Company,
BAK International and Mr. Li entered into on October 22, 2007 (the "Li Settlement Agreement"), such shares were ultimately
delivered to the Company as described below. Because the Company failed to satisfy the performance threshold for the fiscal year ended
September 30, 2006, the remaining 217,955 escrow shares relating to the fiscal year 2006 performance threshold were released to the relevant
investors. As Mr. Li has not retained any of the shares placed into escrow, and as the investors party to the Escrow Agreement are only
shareholders of the Company and do not have and are not expected to have any other relationship to the Company, the Company has not recorded
a compensation charge for the years ended September 30, 2005 and 2006.

 At
the time the escrow shares relating to the 2006 performance threshold were transferred to the investors in fiscal year 2007, the Company
should have recognized a credit to donated shares and a debit to additional paid-in capital, both of which are elements of shareholders'
equity. This entry is not material because total ordinary shares issued and outstanding, total shareholders' equity and total assets
do not change; nor is there any impact on income or earnings per share. Therefore, previously filed consolidated financial statements
for the fiscal year ended September 30, 2007 will not be restated. This share transfer has been reflected in these financial statements
by reclassifying the balances of certain items as of October 1, 2007. The balances of donated shares and additional paid-in capital as
of October 1, 2007 were credited and debited by $ 7,955,358 respectively, as set out in the consolidated statements of changes in shareholders'
equity.

 In
November 2007, Mr. Li delivered the 217,955 shares related to the 2005 performance threshold to BAK International pursuant to the Li
Settlement Agreement; BAK International in turn delivered the shares to the Company. Such shares (other than those issued to investors
pursuant to the 2008 Settlement Agreements, as described below) are now held by the Company. Upon receipt of these shares, the Company
and BAK International released all claims and causes of action against Mr. Li regarding the shares, and Mr. Li released all claims and
causes of action against the Company and BAK International regarding the shares. Under the terms of the Li Settlement Agreement, the
Company commenced negotiations with the investors who participated in the Company's January 2005 private placement in order to
achieve a complete settlement of BAK International's obligations (and the Company's obligations to the extent it has any)
under the applicable agreements with such investors.

 Beginning
on March 13, 2008, the Company entered into settlement agreements (the "2008 Settlement Agreements") with certain investors
in the January 2005 private placement. Since the other investors have never submitted any claims regarding this matter, the Company did
not reach any settlement with them.

to the 2008 Settlement Agreements, the Company and the settling investors have agreed, without any admission of liability, to a settlement
and mutual release from all claims relating to the January 2005 private placement, including all claims relating to the escrow shares
related to the 2005 performance threshold that had been placed into escrow by Mr. Li, as well as all claims, including claims for liquidated
damages relating to registration rights granted in connection with the January 2005 private placement. Under the 2008 Settlement Agreement,
the Company has made settlement payments to each of the settling investors of the number of shares of the Company's common stock
equivalent to 50 % of the number of the escrow shares related to the 2005 performance threshold these investors had claimed; aggregate
settlement payments as of June 30, 2015amounted to 73,749 shares. Share payments to date have been made in reliance upon the exemptions
from registration provided by Section 4(2) and/or other applicable provisions of the Securities Act of 1933, as amended. In accordance
with the 2008 Settlement Agreements, the Company filed a registration statement covering the resale of such shares which was declared
effective by the SEC on June 26, 2008.

 F- 13

to the Li Settlement Agreement, the 2008 Settlement Agreements and upon the release of the 217,955 escrow shares relating to the fiscal
year 2006 performance threshold to the relevant investors, neither Mr. Li or the Company have any obligations to the investors who participated
in the Company's January 2005 private placement relating to the escrow shares.

 As
of December 31, 2024, the Company had not received any claim from the other investors who have not been covered by the "2008 Settlement
Agreements" in the January 2005 private placement.

 As
the Company has transferred the 217,955 shares related to the 2006 performance threshold to the relevant investors in fiscal year 2007
and the Company also have transferred 73,749 shares relating to the 2005 performance threshold to the investors who had entered the "2008
Settlement Agreements" with us in fiscal year 2008, pursuant to "Li Settlement Agreement" and "2008 Settlement
Agreements", neither Mr. Li nor the Company had any remaining obligations to those related investors who participated in the Company's
January 2005 private placement relating to the escrow shares.

 On
August 14, 2013, Dalian BAK Trading Co., Ltd was established as a wholly owned subsidiary of China BAK Asia Holding Limited ("BAK
Asia") with a registered capital of $ 500,000. Pursuant to CBAK Trading's articles of association and relevant PRC regulations,
BAK Asia was required to contribute the capital to CBAK Trading on or before August 14, 2015. On March 7, 2017, the name of Dalian BAK
Trading Co., Ltd was changed to Dalian CBAK Trading Co., Ltd ("CBAK Trading"). On August 5, 2019, CBAK Trading's registered
capital was increased to $ 5,000,000. Pursuant to CBAK Trading's amendment articles of association and relevant PRC regulations,
BAK Asia was required to contribute the capital to CBAK Trading on or before August 1, 2033. On December 12, 2023, CBAK Trading changed
its name to Dalian CBAK New Energy Co., Ltd ("CBAK New Energy"). Up to the date of this report, the Company has contributed
$ 2,435,000 to CBAK New Energy in cash. CBAK New Energy principally engaged in investment holding.

 On
December 27, 2013, Dalian BAK Power Battery Co., Ltd was established as a wholly owned subsidiary of BAK Asia with a registered capital
of $ 30,000,000. Pursuant to CBAK Power's articles of association and relevant PRC regulations, BAK Asia was required to contribute
the capital to CBAK Power on or before December 27, 2015. On March 7, 2017, the name of Dalian BAK Power Battery Co., Ltd was changed
to Dalian CBAK Power Battery Co., Ltd ("CBAK Power"). On July 10, 2018, CBAK Power's registered capital was increased
to $ 50,000,000. On October 29, 2019, CBAK Power's registered capital was further increased to $ 60,000,000. Pursuant to CBAK Power's
amendment articles of association and relevant PRC regulations, BAK Asia was required to contribute the capital to CBAK Power on or before
December 31, 2021. Up to the date of this report, the Company has contributed $ 60,000,000 to CBAK Power through injection of a series
of patents and cash. CBAK Power principal engaged in development and manufacture of high-power lithium batteries.

 On
May 4, 2018, CBAK New Energy (Suzhou) Co., Ltd ("CBAK Suzhou") was established as a 90 % owned subsidiary of CBAK Power with
a registered capital of RMB 10,000,000 (approximately $ 1.5 million). The remaining 10 % equity interest was held by certain employees of
CBAK Suzhou. Pursuant to CBAK Suzhou's articles of association, each shareholder is entitled to the right of the profit distribution
or responsible for the loss according to its proportion to the capital contribution. Pursuant to CBAK Suzhou's articles of association
and relevant PRC regulations, CBAK Power was required to contribute the capital to CBAK Suzhou on or before December 31, 2019. Up to
the date of this report, the Company has contributed RMB 9.0 million (approximately $ 1.3 million), and the other shareholders have contributed
RMB 1.0 million (approximately $ 0.1 million) to CBAK Suzhou through injection of a series of cash. In April 14, 2023, CBAK Power and Nanjing
BFD Energy Technology Co., Ltd entered into shares transfer agreement to transfer the 90 % shares of CBAK Suzhou owned by CBAK Power to
Nanjing BFD, no gain or loss was incurred for the transfer. CBAK Suzhou is dormant as of the date of the report.

 F- 14

 On
November 21, 2019, Dalian CBAK Energy Technology Co., Ltd ("CBAK Energy") was established as a wholly owned subsidiary of
BAK Asia with a registered capital of $ 50,000,000. Pursuant to CBAK Energy's articles of association and relevant PRC regulations,
BAK Asia was required to contribute the capital to CBAK Energy on or before November 20, 2022, the Company has extended the paid up time
to January 31, 2054. Up to the date of this report, the Company has contributed $ 23,519,880 to CBAK Energy. CBAK Energy is dormant
as of the date of the report.

 On
July 14, 2020, the Company acquired BAK Asia Investments Limited ("BAK Investments"), a company incorporated under Hong Kong
laws, from Mr. Xiangqian Li, the Company's former CEO, for a cash consideration of HK$ 1.00. BAK Asia Investments Limited is a holding
company without any other business operations. BAK Investments principally engaged in investment holding.

 On
July 31, 2020, BAK Investments formed a wholly owned subsidiary CBAK New Energy (Nanjing) Co., Ltd. ("CBAK Nanjing") in China
with a registered capital of $ 100,000,000. Pursuant to CBAK Nanjing's articles of association and relevant PRC regulations, BAK
Investments was required to contribute the capital to CBAK Nanjing on or before July 29, 2040. Up to the date of this report, the Company
has contributed $ 55,289,915 to CBAK Nanjing. CBAK Nanjing principally engaged in investment holding.

 On
August 6, 2020, Nanjing CBAK New Energy Technology Co., Ltd. ("Nanjing CBAK") was established as a wholly owned subsidiary
of CBAK Nanjing with a registered capital of RMB 700,000,000 (approximately $ 101.3 million). Pursuant to Nanjing CBAK's articles
of association and relevant PRC regulations, CBAK Nanjing was required to contribute the capital to Nanjing CBAK on or before August
5, 2040. Up to the date of this report, the Company has contributed RMB 352.5 million (approximately $ 51.0 million) to Nanjing CBAK. Nanjing
CBAK principally engaged in development and manufacture of larger-sized cylindrical lithium batteries.

 On
November 9, 2020, Nanjing Daxin New Energy Automobile Industry Co., Ltd ("Nanjing Daxin") was established as a wholly owned
subsidiary of CBAK Nanjing with a register capital of RMB 50,000,000 (approximately $ 7.2 million). Up to the date of this report, the
Company has contributed RMB 37 million (approximately $ 5.4 million) to Nanjing Daxin. On March 6, 2023, Nanjing Daxin changed its name
to Nanjing BFD Energy Technology Co., Ltd ("Nanjing BFD"). The Company has paid in full to Nanjing BFD through injection
of a series of cash. Nanjing BFD principally engaged in development and manufacture of sodium-ion batteries.

 On
April 21, 2021, CBAK Power, along with Shenzhen BAK Power Battery Co., Ltd ("BAK SZ"), Shenzhen Asian Plastics Technology
Co., Ltd ("SZ Asian Plastics") and Xiaoxia Liu, entered into an investment agreement with Junxiu Li, Hunan Xintao New Energy
Technology Partnership, Xingyu Zhu, and Jiangsu Saideli Pharmaceutical Machinery Manufacturing Co., Ltd for an investment in Hunan DJY
Technology Co., Ltd ("DJY"). CBAK Power has paid approximately $ 1.3 million (RMB 9,000,000) to acquire 9.74 % of the equity
interests of DJY. CBAK Power has appointed one director to the Board of Directors of DJY. DJY is an unrelated third party of the Company
engaging in researching and manufacturing of raw materials and equipment.

 On
August 4, 2021, Daxin New Energy Automobile Technology (Jiangsu) Co., Ltd ("Jiangsu Daxin") was established as a wholly owned
subsidiary of Nanjing CBAK with a register capital of RMB 30,000,000 (approximately $ 4.3 million). Pursuant to Jiangsu Daxin's articles
of association and relevant PRC regulations, Nanjing Daxin was required to contribute the capital to Jiangsu Daxin on or before July
30, 2061. Jiangsu Daxin was dissolved on December 22, 2023, no gain or loss resulted from the dissolution.

 On
July 20, 2021, CBAK Power entered into a framework agreement relating to CBAK Power's investment in Zhejiang Hitrans Lithium Battery
Technology Co., Ltd ("Hitrans", formerly known as Zhejinag Meidu Hitrans Lithium Battery Technology Co., Ltd), pursuant to
which CBAK Power agreed to acquire 81.56 % of registered equity interests (representing 75.57 % of paid-up capital) of Hitrans (the "Acquisition").
The Acquisition was completed on November 26, 2021 (Note 12). After the completion of the Acquisition, Hitrans became a 81.56 % registered
equity interests (representing 75.57 % of paid-up capital) owned subsidiary of the Company.

 F- 15

 On
July 8, 2022, Hitrans held its second shareholder meeting ("the shareholder meeting") in 2022 to pass a resolution to increase
the registered capital of Hitrans from RMB 40 million to RMB 44 million (approximately $ 6.4 million) and to accept an investment of RMB 22
million (approximately $ 3.2 million) from Shaoxing Haiji Enterprise Management & Consulting Partnership ("Shaoxing Haiji")
and an investment of RMB 18 million (approximately $ 2.6 million) from Mr. Haijun Wu (collectively "management shareholder").
Under the resolution, 10 % of the investment injection (RMB 4 million or $ 0.6 million) will be contributed towards Hitrans's registered
capital and the remaining 90 % (RMB 36 million or $ 5.2 million) will be treated as additional paid-in capital contribution of Hitrans.
 25 % of the investments from the management shareholder were required to be in place before August 15, 2022, 25 % of the investments were
required to be in place before December 31, 2022 and the 50 % balance (RMB 20 million) were required to be received June 30, 2024. As of
December 31, 2023 and 2024, RMB 10 million (approximately $ 1.4 million), representing the 25 % of the investments were received. Shaoxing
Haiji and Mr. Haijun Wu are currently in negotiations with other shareholders of Hitrans to extend the payment due date for the remaining
unpaid 25 % and 50 % of the Management Shareholder Investments to May 31, 2029. CBAK Power equity interest in Hitrans was diluted to 74.15 %
(representing 77.57 % of paid-up capital) after the above transaction.

 On
December 8, 2022, CBAK Power entered into equity interest transfer agreements with five individuals to disposal in aggregate 6.82 % of
Hitrans equity interests for a total consideration of RMB 30,000,000 (approximately $ 4.3 million). The transaction was completed on December
30, 2022. CBAK Power equity interest in Hitrans was 67.33 % (representing 69.12 % of paid up-capital) after the disposal.

 On
March 26, 2024, CBAK New Energy entered into an agreement with CBAK Power to acquire the same 67.33 % equity interest in Hitrans. The
registration of this equity transfer with the local government was also completed on the same date. As a result of this transaction,
CBAK New Energy has become the controlling shareholder of Hitrans, while CBAK Power no longer holds any equity interest in Hitrans..
As of December 31, 2024, CBAK New Energy's equity interests in Hitrans was 67.33 % (representing 69.12 % of paid-up capital).

 On
July 6, 2018, Guangdong Meidu Hitrans Resources Recycling Technology Co., Ltd. ("Guangdong Hitrans") was established as a
 80 % owned subsidiary of Hitrans with a registered capital of RMB 10 million (approximately $ 1.6 million). The remaining 20 % registered
equity interest was held by Shenzhen Baijun Technology Co., Ltd. Pursuant to Guangdong Hitrans's articles of association, each
shareholder is entitled to the right of the profit distribution or responsible for the loss according to its proportion to the capital
contribution. Pursuant to Guangdong Hitrans's articles of association and relevant PRC regulations, Hitrans was required to contribute
the capital to Guangdong Hitrans on or before December 30, 2038. Up to the date of this report, Hitrans has contributed RMB 1.72 million
(approximately $ 0.3 million), and the other shareholder has contributed RMB 0.25 million (approximately $ 0.04 million) to Guangdong Hitrans
through injection of a series of cash. Guangdong Hitrans was established under the laws of the People's Republic of China as a
limited liability company on July 6, 2018 with a registered capital RMB 10 million (approximately $ 1.5 million). Guangdong Hitrans is
based in Dongguan, Guangdong Province, and is principally engaged in the business of resource recycling, waste processing, and R&D,
manufacturing and sales of battery materials. Guangdong Hitrans was dissolved on January 30, 2024, no gain or loss resulted from the
dissolution.

 On
July 28, 2021, Hitrans Holdings, was established as a wholly owned subsidiary of CBAK, under the laws of the Cayman Islands, formerly
named as "CBAK Energy Technology, Inc.," was renamed as "Hitrans Holdings Co., Ltd." ("Hitrans Holdings")
on February 29, 2024. Hitrans Holdings does not have any significant operations as of the date of this report.

 On
October 9, 2021, Shaoxing Haisheng International Trading Co., Ltd. ("Haisheng") was established as a wholly owned subsidiary
of Hitrans with a registered capital of RMB 5 million (approximately $ 0.8 million). Pursuant to Haisheng's articles of association
and relevant PRC regulations, Hitrans was required to contribute the capital to Haisheng on or before May 31, 2025. Up to the date of
this report, Hitrans has contributed RMB 3.5 million (approximately $ 0.5 million) to Haisheng. Haisheng principally engaged in the
business of cathode materials trading.

 On
July 7, 2023, Hong Kong Nacell Holdings Company Limited was established as a wholly owned subsidiary of Hitrans Holdings, incorporated
under the laws of Hong Kong, was renamed as "Hong Kong Hitrans Holdings Company Limited" ("Hong Kong Hitrans")
on March 22, 2024. Hong Kong Hitrans does not have any significant operations as of the date of this report.

 F- 16

 On
July 12, 2023, CBAK Energy Lithium Holdings was established as a wholly owned subsidiary of CBAK, incorporated under the laws of the
Cayman Islands was renamed as "CBAK Energy Lithium Holdings Co. Ltd" on February 29, 2024. CBAK Energy Lithium Holdings does
not have any significant operations as of the date of this report.

 On July 25, 2023, CBAK New Energy (Shangqiu) Co.,
Ltd ("CBAK Shangqiu") was established as a wholly owned subsidiary of CBAK Power with a registered capital of RMB 50 million
(approximately $ 6.9 million). Pursuant to CBAK Shangqiu's articles of association and relevant PRC regulations, CBAK Power was required
to contribute the capital to Shangqiu on or before July 24, 2043. Up to the date of this report, CBAK Power has contributed RMB 17.8 million
($ 2.5 million) to Shangqiu. CBAK Shangqiu principally engaged in manufacture and sales of lithium-ion batteries.

 On
February 26, 2024, CBAK Energy Investments Holdings ("CBAK Energy Investments") was established as a wholly owned subsidiary
of CBAK, under the laws of the Cayman Islands. CBAK Energy Investments does not have any significant operations as of the date of this
report.

 On
October 29, 2024, Shenzhen CBAK Sodium Battery New Energy Co., Ltd ("CBAK Shenzhen") was established as a wholly owned subsidiary
of BAK Investments with a registered capital of $ 2,000,000. Pursuant to CBAK Shenzhen's articles of association and relevant PRC
regulations, BAK Investments was required to contribute the capital to CBAK Shenzhen on or before October 17, 2029. Up to the date of
this report, nil contribution was made by BAK Investments.

 On
January 9, 2025, Anhui Yuanchuang New Energy Materials Co., Ltd. was established as a wholly owned subsidiary of Hitrans with a registered
capital of RMB 50,000,000 (approximately $ 6.8 million). Pursuant to its articles of association and relevant PRC regulations, Hitrans
was required to contribute the capital on or before January 2, 2030. Up to the date of this report, nil contribution was made by Hitrans.

 The
Company's consolidated financial statements have been prepared under US GAAP.

 The
preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. This
basis of accounting differs in certain material respects from that used for the preparation of the books of account of the Company and
its subsidiaries, which are prepared in accordance with the accounting principles and the relevant financial regulations applicable to
enterprises with limited liability established in the PRC or Hong Kong. The accompanying consolidated financial statements reflect necessary
adjustments not recorded in the books of account of the Company's subsidiaries to present them in conformity with US GAAP.

 On
December 8, 2020, the Company entered into a securities purchase agreement with certain institutional investors, pursuant to which the
Company issued in a registered direct offering, an aggregate of 9,489,800 shares of common stock of the Company at a per share purchase
price of $ 5.18, and warrants to purchase an aggregate of 3,795,920 shares of common stock of the Company at an exercise price of $ 6.46
per share exercisable for 36 months from the date of issuance, for gross proceeds of approximately $ 49.16 million, before deducting fees
to the placement agent and other estimated offering expenses of $ 3.81 million payable by the Company. In addition, the placement agent
for this transaction also received warrants ("Placement Agent Warrants") for the purchase of up to 379,592 shares of the
Company's common stock at an exercise price of $ 6.475 per share exercisable for 36 months after 6 months from the issuance.

 F- 17

 On
February 8, 2021, the Company entered into another securities purchase agreement with the same investors, pursuant to which the Company
issued in a registered direct offering, an aggregate of 8,939,976 shares of common stock of the Company at a per share purchase price
of $ 7.83. In addition, the Company issued to the investors (i) in a concurrent private placement, the Series A-1 warrants to purchase
a total of 4,469,988 shares of common stock, at a per share exercise price of $ 7.67 and exercisable for 42 months from the date of issuance;
(ii) in the registered direct offering, the Series B warrants to purchase a total of 4,469,988 shares of common stock, at a per share
exercise price of $ 7.83 and exercisable for 90 days from the date of issuance; and (iii) in the registered direct offering, the Series
A-2 warrants to purchase up to 2,234,992 shares of common stock, at a per share exercise price of $ 7.67 and exercisable for 45 months
from the date of issuance. The Company received gross proceeds of approximately $ 70 million from the registered direct offering and the
concurrent private placement, before deducting fees to the placement agent and other estimated offering expenses of $ 5.0 million payable
by the Company. In addition, the placement agent for this transaction also received warrants ("Placement Agent Warrants")
for the purchase of up to 446,999 shares of the Company's common stock at an exercise price of $ 9.204 per share exercisable for
36 months after 6 months from the issuance.

 On
May 10, 2021, the Company entered into that Amendment No. 1 to the Series B Warrant (the "Series B Warrant Amendment") with
each of the holders of the Company's outstanding Series B warrants. Pursuant to the Series B Warrant Amendment, the term of the
Series B warrants was extended from May 11, 2021 to August 31, 2021.

 As
of August 31, 2021, the Company had not received any notices from the investors to exercise Series B warrants. As of December 31, 2024,
all of the warrants were expired.

 As
of December 31, 2024, the Company had $ 26.1 million bank loans and approximately $ 145.6 million of other current liabilities.

 The
Company is currently expanding its product lines and manufacturing capacity in its Dalian, Nanjing and Zhejiang plant which requires
more funding to finance the expansion. The Company plans to raise additional funds through banks borrowings and equity financing in the
future to meet its daily cash demands, if required.

 Outbreaks
of viruses or other health epidemics and outbreaks

 The
Company business has been and may continue to be adversely affected by the outbreak of a widespread health epidemic, such as COVID-19
avian flu or African swine flu. The Company's manufacturing facilities in Dalian, Nanjing and Shaoxing did not produce at full
capacity when restrictive measures were in force during 2022, which negatively affected our operational and financial results. China
began to modify its zero-COVID policy at the end of 2022, and most of the travel restrictions and quarantine requirements were lifted
in December 2022.

 The
extent of the impact of the outbreaks of viruses or other health epidemics that will continue to have on the Company's business
is highly uncertain and difficult to predict and quantify, as the actions that the Company, other businesses and governments may take
to contain the spread of possible health epidemics and outbreak continue to evolve. Because of the significant uncertainties surrounding,
the extent of the future business interruption and the related financial impact cannot be reasonably estimated at this time.

 As
of the date of issuance of the Company's financial statements, the extent to which the possible health epidemics and outbreaks
may in the future materially impact the Company's financial condition, liquidity or results of operations is uncertain. The Company
is monitoring and assessing the evolving situation closely and evaluating its potential exposure.

 Going
Concern

 The
accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company
has a working capital deficiency, accumulated deficit from recurring net losses incurred for prior years and significant short-term debt
obligations maturing in less than one year as of December 31, 2024. These conditions raise substantial doubt about the Company ability
to continue as a going concern. The Company's plan for continuing as a going concern included improving its profitability, and
obtaining additional debt financing, loans from existing directors and shareholders for additional funding to meet its operating needs.
There can be no assurance that the Company will be successful in the plans described above or in attracting equity or alternative financing
on acceptable terms, or if at all. These consolidated financial statements do not include any adjustments to the recoverability and classification
of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going
concern.

 F- 18

 2.
 Summary
 of Significant Accounting Policies and Practices

 (a)
 Principles of Consolidation

 The
consolidated financial statements include the financial statements of the Company and its subsidiaries up to the date of disposal. All
significant intercompany balances and transactions have been eliminated prior to consolidation.

 (b)
 Cash and Cash Equivalents

 Cash
and cash equivalents consist of cash on hand and demand deposits placed with banks which are unrestricted as to withdrawal or use, and
have original maturities less than three months. The Company considers all highly liquid debt instruments, with initial terms of less
than three months to be cash equivalents.

 As
of December 31, 2023 and 2024, cash held in accounts managed by online payment platforms such as Alipay amounted to $ 10,519 and $ 6,451
respectively, which have been classified as cash and cash equivalents in the consolidated balance sheets.

 (c)
 Pledged deposit

 Pledged
deposit primarily represents bank deposits for bank notes amounted to $ 54.2 million and $ 54.1 million as of December 31, 2023
and 2024, respectively.

 (d)
 Short-term deposit

 Short-term
deposits represent time deposits placed with banks with maturities longer than three months but less than one year. Interest earned is
recorded as finance income in the consolidated financial statement. As of December 31, 2023 and, 2024, substantially all of the Company's
short-term deposits amounting to nil and $ 4,237,090, respectively, had been placed in reputable financial institutions in the PRC.

 (e)
 Trade and Bills Receivable and current expected credit losses

 Trade
and bills receivable are recorded at the invoiced amount, net of allowances for doubtful accounts and sales returns. The allowance for
doubtful accounts is the Company's best estimate of the amount of probable credit losses in the Company's existing trade
accounts receivable.

 In
June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses, which introduces an approach based on expected losses
to estimate credit losses on certain types of financial instruments, including, but not limited to, trade and other receivables and net
investments in leases. The Company assessed that trade receivable and other current assets are within the scope of ASC 326. The Company
has identified the relevant risk characteristics of trade receivables and other current assets which include size, type of the services
or the products the Company provides, or a combination of these characteristics, the historical credit loss experience, current economic
conditions, supportable forecasts of future economic conditions, and any recoveries in assessing the lifetime expected credit losses,
etc. Other key factors that influence the expected credit loss analysis include industry-specific factors that could impact the credit
quality of the Company's receivables. This is assessed at each quarter based on the Company's specific facts and circumstances.
All forward looking statements are, by their nature, subject to risks and uncertainties, many of which are beyond the Company's
control. Additionally, external data and macroeconomic factors are also considered.

 The
Company adopted this ASC 326 and several associated ASUs on January 1, 2023 using a modified retrospective approach. As of January 1,
2023, upon the adoption, the expected credit loss provision for the current assets was $ 2.3 million.

 F- 19

 The Company provides an allowance against trade receivable
based on the expected credit loss approach and writes off trade receivables when they are deemed uncollectible. The Company considers
the historical credit loss experience, customer specific facts and economic conditions in assessing the expected credit losses.
 Other key factors that influence the expected credit loss analysis include customer geographical, payment terms offered in the
normal course of business to customers, and industry-specific factors that could impact the Company's receivables. Additionally,
external data and macroeconomic factors are also considered. This is assessed at each quarter based on the Company's specific facts
and circumstances.

 Outstanding trade receivable balances are reviewed
individually for collectability. Trade receivable balances are charged off against the allowance after all means of collection have been
exhausted and the potential for recovery is considered remote.

 (f)

are stated at the lower of cost or net realizable value. The cost of inventories is determined using the weighted average cost method,
and includes expenditures incurred in acquiring the inventories and bringing them to their existing location and condition. In case of
finished goods and work in progress, the cost includes an appropriate share of production overhead based on normal operating capacity.
Net realizable value is the estimated selling prices

 The
Company records adjustments to its inventory for estimated obsolescence or diminution in net realizable value equal to the difference
between the cost of the inventory and the estimated net realizable value. At the point of loss recognition, a new cost basis for that
inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly
established cost basis.

 (g)
 Property, Plant and Equipment

 Property,
plant and equipment (except construction in progress) are stated at cost less accumulated depreciation and impairment charges. Depreciation
is calculated based on the straight-line method (after taking into account their respective estimated residual values) over the estimated
useful lives of the assets as follows:

 Buildings

 5 – 38 years

 Machinery and equipment

 1 – 15 years

 Leasehold improvement

 Over the shorter of lease term of the estimated useful lives of the assets

 Office equipment

 1 – 5 years

 Motor vehicles

 5 – 12 years

 The
cost and accumulated depreciation of property, plant and equipment sold are removed from the consolidated balance sheets and resulting
gains or losses are recognized in the consolidated statements of operations and comprehensive income (loss).

in progress mainly represents expenditures in respect of the Company's corporate campus, including offices, factories and staff
dormitories, under construction. All direct costs relating to the acquisition or construction of the Company's corporate campus
and equipment, including interest charges on borrowings, are capitalized as construction in progress. No depreciation is provided in
respect of construction in progress.

 A
long-lived asset to be disposed of by abandonment continues to be classified as held and used until it is disposed of.

 (h)
 Lease

 The
Company accounts for leases in accordance with ASC 842, Leases ("ASC 842"), which requires lessees to recognize
leases on the balance sheet and disclose key information about leasing arrangements. The Company elected not to apply the recognition
requirements of ASC 842 to short-term leases. The Company also elected not to separate non-lease components from lease components, therefore,
it will account for lease component and the non-lease components as a single lease component when there is only one vendor in the lease
contract.

 F- 20

 The
Company determines if a contract contains a lease based on whether it has the right to obtain substantially all of the economic benefits
from the use of an identified asset which the Company does not own and whether it has the right to direct the use of an identified asset
in exchange for consideration. Right of use ("ROU") assets represent the Company's right to use an underlying asset
for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. ROU
assets are recognized as the amount of the lease liability, adjusted for lease incentives received. Lease liabilities are recognized
at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value
of the future lease payments is the Company's incremental borrowing rate ("IBR"), because the interest rate implicit
in most of the Company's leases is not readily determinable. The IBR is a hypothetical rate based on the Company's understanding
of what its credit rating would be to borrow and resulting interest the Company would pay to borrow an amount equal to the lease payments
in a similar economic environment over the lease term on a collateralized basis. Lease payments may be fixed or variable, however, only
fixed payments or in-substance fixed payments are included in the Company's lease liability calculation. Variable lease payments
are recognized in operating expenses in the period in which the obligation for those payments are incurred.

 (i)

 Prepaid land use
 rights

 The
land use rights are operating leases with lease terms vary from 36 to 50 years. Land use rights acquired are assessed in accordance with
ASC 842 if they meet the definition of lease.

 (ii)

 Operating lease

 The
lease terms of operating leases vary from more than a year to five years. Operating leases are included in operating lease right of use
assets, and the corresponding operating lease liabilities are included within current and non-current operating lease liabilities on
the Company's consolidated balance sheets. As of December 31, 2023 and 2024, all of the Company's ROU assets were generated
from leased assets in the PRC.

 (iii)

 Finance lease

leases are included in property, plant and equipment, net, current and non-current finance lease liabilities on the Company's consolidated
balance sheets. As of December 31, 2023 and 2024, all of the Company's finance lease assets were generated from leased assets in
the PRC.

 (i)
 Foreign Currency Transactions and Translation

 The
reporting currency of the Company is the United States dollar ("US dollar"). The financial records of the Company's
PRC operating subsidiaries are maintained in their local currency, the Renminbi ("RMB"), which is the functional currency.
The financial records of the Company's subsidiaries established in other countries are maintained in their local currencies. Assets
and liabilities of the subsidiaries are translated into the reporting currency at the exchange rates at the balance sheet date, equity
accounts are translated at historical exchange rates, and income and expense items are translated using the average rate for the period.
The translation adjustments are recorded in accumulated other comprehensive loss under shareholders' equity.

 Monetary
assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional currencies
at the prevailing rates of exchange at the balance sheet date. Nonmonetary assets and liabilities are remeasured into the applicable
functional currencies at historical exchange rates. Transactions in currencies other than the applicable functional currencies during
the period are converted into the functional currencies at the applicable rates of exchange prevailing at the transaction dates. Transaction
gains and losses are recognized in the consolidated statements of operations.

 RMB
is not a fully convertible currency. All foreign exchange transactions involving RMB must take place either through the People's
Bank of China (the "PBOC") or other institutions authorized to buy and sell foreign exchange. The exchange rates adopted
for the foreign exchange transactions are the rates of exchange quoted by the PBOC, which are determined largely by supply and demand.
 Translation of amounts from RMB into US dollars has been made at the following exchange rates for the respective periods:

 Year ended December 31, 2023

 Balance sheet, except for equity
 accounts

 RMB 7.0971 to US$1.00

 Income statement and cash flows

 RMB 7.0719 to US$1.00

 Year ended December 31, 2024

 Balance sheet, except for equity
 accounts

 RMB 7.2994 to US$1.00

 Income statement and cash flows

 RMB 7.1913 to US$1.00

 F- 21

 (j)
 Intangible Assets

 Intangible
assets are stated in the balance sheet at cost less accumulated amortization and impairment, if any. The costs of the intangible assets
are amortized on a straight-line basis over their estimated useful lives. The respective amortization periods for the intangible assets
are as follows:

 Computer software

 – 1 - 10 years

 Sewage discharge permit

 – 5 - 7 years

 (k)
 Impairment of Long-lived Assets (including amortizable intangible assets) other than goodwill

 Long-lived
assets, which include property, plant and equipment, prepaid land use rights, leased assets and intangible assets, are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

 Recoverability
of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted
future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future
cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the
asset. Fair value is generally measured based on either quoted market prices, if available, or discounted cash flow analyses.

 (l)
 Long-term investments

 The
Company's long-term investments include equity investments in entities and non-marketable equity.

 Investments
in entities in which the Company can exercise significant influence and holds an investment in voting common stock or in substance common
stock (or both) of the investee but does not own a majority equity interest or control are accounted for using the equity method of accounting
in accordance with ASC topic 323, Investments — Equity Method and Joint Ventures ("ASC 323"). Under the equity method,
the Company initially records its investments at fair value. The Company subsequently adjusts the carrying amount of the investments
to recognize the Company's proportionate share of each equity investee's net income or loss into earnings after the date
of investment. The Company evaluates the equity method investments for impairment under ASC 323. An impairment loss on the equity method
investments is recognized in earnings when the decline in value is determined to be other-than-temporary.

 Equity
securities with readily determinable fair values and over which the Company has neither significant influence nor control through investments
in common stock or in-substance common stock are measured at fair value, with changes in fair value reported through earnings.

 Equity
securities without readily determinable fair values and over which the Company has neither significant influence nor control through
investments in common stock or in-substance common stock are measured and recorded using a measurement alternative that measures the
securities at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes.

 Available-for-sale
debt security investments are reported at estimated fair value with the aggregate unrealized gains and losses, net of tax, reflected
in accumulated other comprehensive loss in the consolidated balance sheets. Gain or losses are realized when the investments are sold
or when dividends are declared or payments are received or when other than temporarily impaired.

 F- 22

 Held-to-maturity
debt security investment are reported at amortized cost. The securities are held to collect contractual cash flows, and the Company has
the positive intent and ability to hold those securities to maturity.

 The
Company monitors its investments measured under equity method for other-than-temporary impairment by considering factors including, but
not limited to, current economic and market conditions, the operating performance of the companies including current earnings trends
and other company-specific information.

 (m)
 Revenue Recognition

 The
Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration
which it expects to receive in exchange for those goods. The Company recognizes revenues following the five step model prescribed under
ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine
the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues
when (or as) we satisfy the performance obligation.

from product sales are recognized when the customer obtains control of the Company's product, which occurs at a point in time,
typically upon delivery to the customer. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected
amortization period of the asset that it would have recognized is one year or less or the amount is immaterial.

from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts
with the Company's customers.

revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the categories: discounts and
returns. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions
of accounts receivable as the amount is payable to the Company's customer.

 Practical
expedients and exemption

 The
Company has not occurred any costs to obtain contracts, and does not disclose the value of unsatisfied performance obligations for contracts
with an original expected length of one year or less.

 Contract
liabilities

 The
Company's contract liabilities consist of deferred revenue associated with batteries development, services contracts and deposits
received from customers allocated to the performance obligations that are unsatisfied. Changes in contract liability balances were not
materially impacted by business acquisition, change in estimate of transaction price or any other factors during any of the years presented.
 The table below presents the activity of the deferred batteries development and sales of batteries revenue during the years ended December
31, 2023 and 2024, respectively:

 2023

 2024

 Balance at beginning of year

 $
 1,869,525

 $
 784,000

 Development fees collected/ deposits received

 -

 4,108,620

 Development and sales of batteries revenue
 recognized

 ( 1,060,535
)

 -

 Exchange realignment

 ( 24,990
)

 ( 60,846
)

 Balance at end of year

 $
 784,000

 $
 4,831,774

 F- 23

 (n)
 Cost of Revenues

 Cost
of revenues consists primarily of material costs, employee compensation, depreciation and related expenses, which are directly attributable
to the production of products. Write-down of inventories to lower of cost or market is also recorded in cost of revenues.

 (o)
 Income Taxes

taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases and operating loss and tax credit carry forwards. Deferred tax assets are reduced by a valuation allowance to the extent management
concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted
tax rates applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of operations and comprehensive loss in
the period that includes the enactment date.

 The
impact of an uncertain income tax positions on the income tax return must be recognized at the largest amount that is more likely than
not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less
than a 50 % likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions
for income taxes.

 (p)
 PRC Value-Added Tax ("VAT")

 The
Company has been subject to VAT within the normal course of its restaurant business nationwide since May 1, 2016.

 Entities
that are VAT general taxpayers are permitted to offset qualified input VAT paid to suppliers against their output VAT upon receipt of
appropriate supplier VAT invoices on an entity-by-entity basis. When the output VAT exceeds the input VAT, the difference is remitted
to tax authorities, usually on a monthly basis; whereas when the input VAT exceeds the output VAT, the difference is treated as a VAT
asset which can be carried forward indefinitely to offset future net VAT payables. VAT related to purchases and sales which have not
been settled at the balance sheet date is disclosed separately as an asset and liability, respectively, on the consolidated balance sheets.
VAT assets are classified as Prepayments and other receivables if they are expected to be used within one year. The Company reviews the
outstanding balance of VAT assets for recoverability assessment.

 (q)
 Non-controlling Interests

 For
the Company's non-wholly owned subsidiary, a non-controlling interest is recognized to reflect the portion of equity that is not
attributable, directly or indirectly, to the Company. Non-controlling interests are classified as a separate line item in the equity
section of the Company's consolidated balance sheets and have been separately disclosed in the Company's consolidated statements
of comprehensive loss to distinguish the interests from that of the Company. Cash flows related to transactions with non-controlling
interests are presented under financing activities in the consolidated statements of cash flows.

 (r)
 Research and Development and Advertising Expenses

and development and advertising expenses are expensed as incurred. Research and development expenses consist primarily of remuneration
for research and development staff, depreciation and material costs for research and development. Advertising expenses was $ 1,640,476
and $ 1,706,096 for the years ended December 31, 2023 and 2024.

 (s)
 Bills Payable

 Bills
payable represent bills issued by financial institutions to the Company's vendors. The Company's vendors receive payments
from the financial institutions directly upon maturity of the bills and the Company is obliged to repay the face value of the bills to
the financial institutions.

 F- 24

 (t)
 Warranties

 The
Company provides a manufacturer's warranty on all its products. It accrues a warranty reserve for the products sold, which includes
management's best estimate of the projected costs to repair or replace items under warranty. These estimates are based on actual
claims incurred to date and an estimate of the nature, frequency and costs of future claims. These estimates are inherently uncertain
given the Company's relatively short history of sales of its current products, and changes to its historical or projected warranty
experience may cause material changes to the warranty reserve in the future.

 (u)
 Government Grants

 The
Company's subsidiaries in China receive government subsidies from local Chinese government agencies in accordance with relevant
Chinese government policies. In general, the Company presents the government subsidies received as part of other income unless the subsidies
received are earmarked to compensate a specific expense, which have been accounted for by offsetting the specific expense, such as research
and development expense, interest expenses and removal costs. Unearned government subsidies received are deferred for recognition until
the criteria for such recognition could be met.

 Grants
applicable to land are amortized over the life of the depreciable facilities constructed on it. For research and development expenses,
the Company matches and offsets the government grants with the expenses of the research and development activities as specified in the
grant approval document in the corresponding period when such expenses are incurred.

 (v)
 Share-based Compensation

 The
Company adopted the provisions of ASC Topic 718 which requires the Company to measure and recognize compensation expenses for an award
of an equity instrument based on the grant-date fair value. The cost is recognized over the vesting period (or the requisite service
period). ASC Topic 718 also requires the Company to measure the cost of a liability classified award based on its current fair value.
The fair value of the award will be remeasured subsequently at each reporting date through the settlement date. Changes in fair value
during the requisite service period are recognized as compensation cost over that period. Further, ASC Topic 718 requires the Company
to estimate forfeitures in calculating the expense related to stock-based compensation.

 The
fair value of each option award is estimated on the date of grant using the Black-Scholes Option Valuation Model. The expected volatility
was based on the historical volatilities of the Company's listed common stocks in the United States and other relevant market information.
The Company uses historical data to estimate share option exercises and employee departure behavior used in the valuation model. The
expected terms of share options granted is derived from the output of the option pricing model and represents the period of time that
share options granted are expected to be outstanding. Since the share options once exercised will primarily trade in the U.S. capital
market, the risk-free rate for periods within the contractual term of the share option is based on the U.S. Treasury yield curve in effect
at the time of grant.

 (w)
 Retirement and Other Postretirement Benefits

 Contributions
to retirement schemes (which are defined contribution plans) are charged to cost of revenues, research and development expenses, sales
and marketing expenses and general and administrative expenses in the statement of operations and comprehensive loss as and when the
related employee service is provided.

 Full
time employees of the Company in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension
benefits, medical care, employee housing fund and other welfare benefits are provided to the employees. Chinese labor regulations require
that the PRC subsidiary of the Company make contributions to the government for these benefits based on certain percentages of the employees'
salaries, up to a maximum amount specified by the local government. The Company has no legal obligation for the benefits beyond the contributions
made. Total amounts of such employee benefit expenses, which were expensed as incurred, were approximately $ 2,952,247 (RMB 20,877,994)
and $ 6,524,654 (RMB 46,920,747) for the years ended December 31, 2023 and 2024, respectively.

 F- 25

 (x)
 Income (loss) per Share

 Basic
income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the
period. Diluted income (loss) per share is computed similar to basic net income per share except that the denominator is increased to
include the number of additional common shares that would have been outstanding if all the potential common shares pertaining to warrants,
stock options, and similar instruments had been issued and if the additional common shares were dilutive. Diluted income (loss) per share
is based on the assumption that all dilutive convertible shares and stock options and warrants were converted or exercised. Dilution
is computed by applying the treasury stock method for the outstanding unvested restricted stock, options and warrants, and the if-converted
method for the outstanding convertible instruments. Under the treasury stock method, options and warrants are assumed to be exercised
at the beginning of the period (or at the time of issuance, if later) and as if funds obtained thereby were used to purchase common stock
at the average market price during the period. Under the if-converted method, outstanding convertible instruments are assumed to be converted
into common stock at the beginning of the period (or at the time of issuance, if later).

 (y)
 Use of Estimates

 The
preparation of the consolidated financial statements in accordance with US GAAP requires management of the Company to make a number of
estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual results
could differ from those estimates. Significant items subject to such estimates and assumptions include revenue recognition, the recoverability
of the carrying amount of long-lived assets, depreciable lives of long-lived assets, allowance for current expected credit loss, unrecognized
tax benefits, impairment on inventories, valuation allowance for receivables and deferred tax assets, provision for warranty and sales
returns, valuation of share-based compensation expense and warrants liability. Actual results could differ from those estimates.

 (z)
 Commitments and Contingencies

 Liabilities
for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable
that a liability has been incurred and the amount of the assessment can be reasonably estimated.

 (aa)
 Warrant Liability

 For
warrants that are not indexed to the Company's stock, the Company records the fair value of the issued warrants as a liability
at each balance sheet date and records changes in the estimated fair value as a non-cash gain or loss in the consolidated statement of
operations and comprehensive income. The warrant liability is recognized in the balance sheet at the fair value (level 3). The fair value
of these warrants has been determined using the Binomial model.

 (ab)
 Comprehensive Income (Loss)

 Comprehensive
income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding
transactions resulting from investments from owners and distributions to owners. Accumulated other comprehensive income includes cumulative
foreign currency translation adjustment.

 (ac)
 Recent Accounting Pronouncements

 Recently
Adopted Accounting Standards

 In October 2021, the FASB issued ASU 2021-08, Business
Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires the recognition
and measurement of contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from
Contracts with Customers. This creates an exception to the general recognition and measurement principles in ASC 805. As a smaller reporting
company, ASU 2021-08 will be effective for the Company for interim and annual reporting periods beginning after December 15, 2023, with
early adoption permitted. The amendments in this ASU should be applied prospectively to business combinations occurring on or after the
effective date of the amendments. The Company adopted ASU 2021-08 beginning January 1, 2024. The adoption did not have material impact
on the Company's consolidated financial statement.

 F- 26

 In
March 2023, the FASB issued ASU 2023-01, Lease (Topic 842): Common Control Arrangements, which clarifies the accounting for leasehold
improvements associated with leases between entities under common control (hereinafter referred to as common control lease). ASU 2023-01
requires entities to amortize leasehold improvements associated with common control lease over the useful life to the common control
group (regardless of the lease term) as long as the lessee controls the use of the underlying asset through a lease, and to account for
any remaining leasehold improvements as a transfer between entities under common control through an adjustment to equity when the lessee
no longer controls the underlying asset. This ASU will be effective for fiscal years beginning after December 15, 2023, including interim
periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been
made available for issuance. An entity may apply ASU 2023-01 either prospectively or retrospectively. The Company adopted ASU 2023-01
beginning January 1, 2024. The adoption did not have material impact on the Company's consolidated financial statement.

 In
March 2023, the FASB issued ASU No. 2023-02, Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments
in Tax Credit Structures Using the Proportional Amortization Method, that is intended to improve the accounting and disclosures for investments
in tax credit structures. This ASU allows reporting entities to elect to account for qualifying tax equity investments using the proportional
amortization method, regardless of the program giving rise to the related income tax credits. For public business entities, the amendments
are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. For all other
entities, the amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal
years. Early adoption is permitted for all entities in any interim period. The Company adopted ASU 2023-2 beginning January 1, 2024.
The adoption did not have material impact on the Company's consolidated financial statement.

 In
November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable
segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the
Chief Operating Decision Maker ("CODM") and included within each reported measure of a segment's profit or loss. This
ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses
the reported measures of a segment's profit or loss in assessing segment performance and deciding how to allocate resources. The
ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December
15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption
is also permitted. This ASU will likely result in us including the additional required disclosures when adopted. The Company adopted
ASU 2023-07 beginning January 1, 2024. The adoption did not have material impact on its consolidated financial statement.

 Recently
Issued But Not Yet Adopted Accounting Pronouncements

 In
October 2023, the FASB issued Accounting Standards Update No. 2023-06 to clarify or improve disclosure and presentation requirements
of a variety of topics, which will allow users to more easily compare entities subject to the SEC's existing disclosures with those
entities that were not previously subject to the requirements, and align the requirements in the FASB accounting standard codification
with the SEC's regulations. The Company is currently evaluating the provisions of the amendments and the impact on the Company's
 consolidated financial statement presentations and disclosures.

 In
December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information
about a reporting entity's effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is
effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial
statements that have not yet been issued or made available for issuance. The Company is currently evaluating the provisions of the amendments
and the impact on the Company's consolidated financial statement presentations and disclosures.

 F- 27

 In
November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE), which requires additional disclosure
of the nature of expenses included in the income statement in response to longstanding requests from investors for more information about
an entity's expenses. The new standard requires disclosures about specific types of expenses included in the expense captions presented
on the face of the income statement as well as disclosures about selling expenses. The guidance will be effective for annual reporting
periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The requirements will be applied
prospectively with the option for retrospective application. Early adoption is permitted. The Company is currently evaluating the impact
that the adoption of this guidance will have on the Company's consolidated financial statement presentation and disclosures.

 Other
accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until
a future date are not expected to have a material impact on the Company's consolidated financial statements upon adoption.

 3.
 Pledged
 deposits

 Pledged
deposits as of December 31, 2023 and 2024 consisted of pledged deposits with banks for bills payable (note 15).

 4.
 Short-term
 deposits

 Short-term deposits represent time deposits placed
with banks with maturities longer than three months but less than one year. Interest earned is recorded as finance income in the consolidated
financial statement. As of December 31, 2023 and 2024, substantially all of the Company's short-term deposits amounting to nil and
$ 4,237,090, respectively, had been placed in reputable financial institutions in the PRC.

 5.
 Trade
 and Bills Receivable, net

 Trade
and bills receivable as of December 31, 2023 and 2024:

 2023

 2024

 Trade receivable

 $
 29,368,296

 $
 28,569,823

 Less: Allowance for
 credit losses

 ( 3,198,249
)

 ( 2,841,728
)

 26,170,047

 25,728,095

 Bills receivable

 2,483,000

 7,210,823

 $
 28,653,047

 $
 32,938,918

 Included
in trade and bills receivables are retention receivables of $ 65,162 and $ 71,207 as of December 31, 2023 and 2024. Retention receivables
are interest-free and recoverable either at the end of the retention period of three to five years since the sales of the EV batteries
or 200,000 km since the sales of the motor vehicles (whichever comes first).

 An
analysis of the allowance for the credit losses are as follows:

 Balance as
 at January 1, 2023

 $
 2,274,513

 Current
 period provision, net

 1,012,404

 Reversal
 – recoveries by cash

 ( 10,250
)

 Written-off

 ( 14,661
)

 exchange adjustment

 ( 63,757
)

 Balance as at December
 31, 2023

 $
 3,198,249

 Current
 period provision, net

 512,123

 Reversal
 – recoveries by cash

 ( 653,568
)

 Written-off

 ( 130,465
)

 exchange adjustment

 ( 84,611
)

 as at December 31, 2024

 $
 2,841,728

 F- 28

 6.

as of December 31, 2023 and 2024 consisted of the following:

 2023

 2024

 Raw materials

 $
 3,779,414

 $
 3,538,167

 Work in progress

 9,525,568

 5,034,330

 Finished goods

 20,108,440

 14,278,530

 $
 33,413,422

 $
 22,851,027

the years ended December 31, 2023 and 2024 write-downs of obsolete inventories to lower of cost or net realizable value of $ 3,554,962
and $ 4,927,140, respectively, were charged to cost of revenues.

 7.
 Prepayments
 and Other Receivables

 Prepayments
and other receivables as of December 31, 2023 and 2024 consisted of the following:

 2023

 2024

 VAT recoverable

 $
 5,248,210

 $
 2,444,726

 Prepayments to suppliers

 1,341,596

 7,992,672

 Deposits

 108,492

 83,754

 Staff advances

 113,336

 76,096

 Prepaid operating expenses

 645,390

 501,218

 Interest receivable

 -

 92,515

 Receivables from customers for non-operating agency-based service

 -

 8,845,759

 Other receivables

 292,458

 258,219

 7,749,482

 20,294,959

 Less: Allowance for
 credit losses

 ( 290,228
)

 ( 289,993
)

 $
 7,459,254

 $
 20,004,966

 An
analysis of the allowance for credit losses are as follows:

 Balance as at January 1, 2023

 $
 7,000

 Current period provision, net

 284,238

 ( 1,010
)

 Balance as at December 31, 2023

 290,228

 Current period provision, net

 7,729

 ( 7,964
)

 Balance as at December 31, 2024

 $
 289,993

 8.
 Property,
 Plant and Equipment, net

 Property,
plant and equipment as of December 31, 2023 and 2024 consisted of the following:

 2023

 2024

 Buildings

 $
 45,843,428

 $
 44,590,499

 Leasehold improvements

 7,214,436

 8,058,360

 Machinery and equipment

 83,625,645

 84,267,956

 Office equipment

 1,983,601

 2,235,605

 Motor vehicles

 727,452

 803,560

 139,394,562

 139,955,980

 ( 17,358,096
)

 ( 16,755,682
)

 Accumulated depreciation

 ( 30,407,634
)

 ( 37,713,469
)

 Carrying amount

 $
 91,628,832

 $
 85,486,829

 F- 29

the years ended December 31, 2023 and 2024, the Company incurred depreciation expense of $ 10,422,306 and $ 7,757,226, respectively.

the course of the Company's strategic review of its operations in the years ended December 31, 2023 and 2024, the Company assessed
the recoverability of the carrying value of certain property, plant and equipment which resulted in impairment losses of approximately
$ 7,070,236 and $ 475,220, respectively. The impairment charge represented the excess of carrying amounts of the Company's property,
plant and equipment over the estimated fair value of the Company's production facilities in Hitrans primarily for the production
of materials used in manufacturing of lithium batteries due to underperformance of Hitrans reporting unit. No impairment charge was recorded
on the Company's production facilities in Dalian, Nanjing and Shangqiu in the years ended December 31, 2023 and 2024.

 9.
 in Progress

in progress as of December 31, 2023 and 2024 consisted of the following:

 2023

 2024

 Construction in progress

 $

 24,876,463

 $

 29,819,111

 Prepayment for acquisition of property, plant and equipment

 12,921,399

 12,707,748

 Carrying amount

 $

 37,797,862

 $

 42,526,859

in progress as of December 31, 2023 and 2024 mainly comprised capital expenditures for the construction of the facilities and production
lines of CBAK Power, Nanjing CBAK and Hitrans.

 For
the years ended December 31, 2023 and 2024, the Company capitalized interest of $ 870,670 and $ 854,395, respectively, to the cost of construction
in progress.

 10.
 Long-term
 investments, net

 Long-term
investments as of December 31, 2023 and 2024, consisted of the following:

 2023

 31,
 2024

 Investments in equity method investees

 $
 1,926,611

 $
 1,625,793

 Investments in non-marketable
 equity

 638,394

 620,701

 $
 2,565,005

 $
 2,246,494

is the carrying value of the long-term investments:

 2023

 Carrying

 Economic
 Interest

 Carrying

 Economic
 Interest

 Investments in equity method investees

 Guangxi Guiwu CBAK New Energy Technology
 Co., Ltd (a)

 $

 254,475

 %

 $

 -

 -

 Zhejiang Shengyang Renewable Resources Technology Co.,
 Ltd. (b)

 1,672,136

 %

 1,625,793

 %

 $

 1,926,611

 $

 1,625,793

 Investments in non-marketable equity

 Hunan DJY Technology Co., Ltd

 $

 638,394

 $

 620,701

 Nanjing CBAK Education For Industry Technology Co.,
 Ltd

 -

 -

 $

 638,394

 $

 620,701

 F- 30

 (a)
 Investments in Guangxi Guiwu CBAK New Energy Technology Co., Ltd

 Balance as of January 1, 2023

 $
 289,473

 Loss from investment

 ( 27,428
)

 ( 7,570
)

 Balance as of December 31, 2023

 254,475

 Proceeds from disposal of investment

 ( 278,114
)

 Loss from investment

 ( 18,777
)

 Profit from disposal

 45,749

 ( 3,333
)

 Balance as of December 31, 2024

 $
 -

 In
August 2022, Nanjing CBAK, along with two unrelated third parties of the Company, Guangxi Guiwu Recycle Resources Company Limited ("Guangxi
Guiwu") and Mr. Weidong Xu, an unrelated third party entered into an investment agreement to jointly set up a new company - Guangxi
Guiwu CBAK New Energy Technology Co., Ltd ("Guangxi Guiwu CBAK") in which each party holding 20 %, 60 % and 20 % equity interests
and voting rights, respectively. Guangxi Guiwu engages in the business of recycling power batteries. The Company applies the equity method
of accounting to account for the equity investments in common stock, over which it has significant influence but does not own a majority
equity interest or otherwise control. Pursuant to the Company's articles of association and relevant PRC regulations, each party
was required to contribute the capital on or before December 31, 2023.

 On
April 19, 2024, NJ CABK entered into an equity transfer agreement with Chilwee Group Co., Ltd, an unrelated third party to the Company
to disposal its equity interest in Guangxi Guiwu at consideration of RMB 2 million (approximately $ 0.3 million). NJ CBAK recorded a gain
on disposal of $ 45,749 for the year ended December 31, 2024.

 For the year
ended December 31, 2023 and 2024, share of loss from the above equity investment was $ 27,428 and $ 18,777, respectively.

 (b)
 Investments in Zhejiang Shengyang Renewable Resources Technology Co., Ltd.

 Balance as at January 1, 2023

 $

 -

 Investments made

 4,044,175

 Impairment loss from investment

 ( 2,366,080

)

 ( 5,959

)

 Balance as of December 31, 2023

 $

 1,672,136

 Profit (loss) from investment

 -

 ( 46,343

)

 Balance as of December 31, 2024

 $

 1,625,793

 F- 31

 In
September 27, 2023, Hitrans, entered into an Equity Transfer Contract (the "Equity Transfer Contract") with Mr. Shengyang
Xu, pursuant to which Hitrans will initially acquire a 26 % equity interest in Zhejiang Shengyang Renewable Resources Technology Co.,
Ltd. ("Zhejiang Shengyang") from Mr. Xu, an individual who currently holds 97 % of Zhejiang Shengyang, for a price of RMB 28.6
million (approximately $ 3.9 million) (the "Initial Acquisition"). Hitrans shall pay the Initial Acquisition price in two
(2) installments as follows: (i) 50 % of the price due within five business days following the execution of the Equity Transfer Contract
and satisfaction of other conditions precedent set forth in the same; and (ii) the remaining 50 % of the price due within five business
days following Mr. Xu successful transfer to Hitrans of the 26 % equity interest in Zhejiang Shengyang. Within fifteen business days after
Hitrans has paid 50 % of the price, or RMB 14.3 million, the parties shall complete the registration of equity change with the local governmental
authorities. Zhejiang Shengyang is a material suppliers of Hitrans since June 2020. On November 6, 2023, Hitrans completed the registration
of 26 % equity interest of Zhejiang Shengyang. The Company recorded an impairment loss of $ 2.4 million (RMB 16.7 million) from the investment
to Zhejinag Shengyang for the year ended December 31, 2023. No income or loss was shared from the investment to Zhejiang Shengyang for
the year ended December 31, 2024.

 And
within three months following the Initial Acquisition, Mr. Xu, an related third party shall transfer an additional 44 % equity interest
in Zhejiang Shengyang to Hitrans at the same price per share as that of the Initial Acquisition (the "Follow-on Acquisition").
The parties shall enter into another agreement to detail the terms of the Follow-on Acquisition. As of the date of this report, the Follow-on
Acquisition was not completed. The management team of Hitrans is currently in negotiations with Mr. Xu regarding a potential postponement
of the payment and equity transfer.

 Investments
in non-marketable equity

 2023

 31,
 2024

 Cost

 $
 1,268,124

 $
 1,232,978

 ( 629,730
)

 ( 612,277
)

 Carrying amount

 $
 638,394

 $
 620,701

 On
April 21, 2021, CBAK Power, along with Shenzhen BAK Power Battery Co., Ltd (BAK Shenzhen), Shenzhen Asian Plastics Technology Co., Ltd
(SZ Asian Plastics) and Xiaoxia Liu (collectively the "Investors"), entered into an investment agreement with Junxiu Li,
Hunan Xintao New Energy Technology Partnership, Xingyu Zhu, and Jiangsu Saideli Pharmaceutical Machinery Manufacturing Co., Ltd for an
investment in Hunan DJY Technology Co., Ltd ("DJY"), a privately held company. CBAK Power has paid $ 1.40 million (RMB 9,000,000)
to acquire 9.74 % of the equity interests of DJY. CBAK Power along with other three new investors has appointed one director on behalf
of the Investors to the Board of Directors of DJY. DJY is unrelated third party of the Company engaging in in research and development,
production and sales of products and services to lithium battery positive cathode materials producers, including the raw materials, fine
ceramics, equipment and industrial engineering.

 On
April 2023, DJY board declared dividend of $ 0.8 million (approximately RMB 6 million). The dividend was distributed in May 2023 and based
on the paid up capital of each shareholders, the dividend income shared by CBAK Power was $ 82,637 (approximately RMB 0.6 million) which
was included in other income (expense) for the year ended December 31, 2023. No dividend was declared in 2024.

 On
November 28, 2022, Nanjing CBAK along with Shenzhen Education for Industry Investment Co., Ltd. and Wenyuan Liu, an individual investor,
set up Nanjing CBAK Education For Industry Technology Co., Ltd ("CBAK Education") with a registered capital of RMB 5 million
(approximately $ 0.7 million), in which each party holding 10 %, 60 % and 30 % equity interests of CBAK Education, respectively. The investment
is for training skillful workforce for Nanjing CBAK. CBAK Education commenced its operation in 2023, nil capital contribution was
made by Nanjing CBAK as of the report date.

 F- 32

 Non-marketable
equity securities are investments in privately held companies without readily determinable market value. The Company measures investments
in non-marketable equity securities without a readily determinable fair value using a measurement alternative that measures these securities
at the cost method minus impairment, if any, plus or minus changes resulting from observable price changes on a non-recurring basis.
The fair value of non-marketable equity securities that have been remeasured due to impairment are classified within Level 3. The Company
adjusts the carrying value of non-marketable equity securities which have been remeasured during the period and recognize resulting gains
or losses as a component of other operating income (expense), net. No impairment was recorded on the non-marketable equity securities
for the years ended December 31, 2023 and 2024.

 11.
 Lease

 (a)
 Prepaid land use rights

 Prepaid
 land

 lease payments

 Balance as of January 1, 2023

 $
 12,361,163

 Amortization charge for the year

 ( 322,160
)

 ( 326,299
)

 Balance as of December 31, 2023

 11,712,704

 Amortization charge for the period

 ( 316,811
)

 ( 319,920
)

 Balance as of December 31, 2024

 $
 11,075,973

 In
August 2014 and November 2021, the Company acquired land use rights to build a factory of the Company in Dalian and Zhejiang, PRC.

 Lump
sum payments were made upfront to acquire the leased land from the owners with lease periods of 36 to 50 years, and no ongoing payments
will be made under the terms of these land leases.

 No
impairment loss was made to the carrying amounts of the prepaid land use right for the years ended December 31, 2023 and 2024.

 (b)

 Operating lease

 In
April 2018, Hitrans entered into a lease agreement for staff quarters spaces in Zhejiang with a five year term, commencing on May 1,
2018 and expiring on April 30, 2023. The monthly rental payment is approximately RMB 18,000 ($ 2,605) per month. In 2018, lump sum payments
were made to landlord for the rental of staff quarter spaces and no ongoing payments will be made under the terms of these leases.

 On April
6, 2021, Nanjing CBAK entered into a lease agreement for warehouse space in Nanjing with a three year term, commencing on April 15, 2021
and expiring on April 14, 2024. The monthly rental payment is approximately RMB 97,743 ($ 14,146) per month. The lease was renewed
for one year with a monthly rental of RMB 86,913 (approximately $ 11,907) to May 14, 2025.

 On
June 1, 2021, Hitrans entered into a lease agreement with liquid gas supplier for a five year term for supplying liquid nitrogen and
oxygen, commencing on July 1, 2021. The monthly rental payment is approximately RMB 5,310 ($ 773) per month.

 On
December 9, 2021, Hitrans entered into a lease agreement for extra staff quarters spaces in Zhejiang with a three year term, commencing
on December 10, 2021 and expiring on December 9, 2024. The monthly rental payment is approximately RMB 10,400 ($ 1,514) per month for the
first year, RMB 10,608 ($ 1,544) and RMB 10,820 ($ 1,575) per month from the second year and third year, respectively.

 On
March 1, 2022, Hitrans entered into a lease agreement for extra staff quarters spaces in Zhejiang with a three year term, commencing
on March 1, 2022 and expiring on February 28, 2027. The monthly rental payment is approximately RMB 15,840 ($ 2,306) per month for the
first year, with 2 % increase per year.

 F- 33

 On
August 1, 2022, Hitrans entered into a lease agreement for warehouse spaces in Zhejiang with a one and half years term, commencing on
August 1, 2022 and expiring on January 31, 2024. The monthly rental payment is RMB 60,394 ($ 8,792) per month.

 On
October 20, 2022, CBAK Power entered into a lease agreement for staff quarters spaces in Dalian with a five year term, commencing on
October 20, 2022 and expiring on October 19, 2025. The monthly rental payment is RMB 61,905 ($ 9,012) per month.

 On
December 20, 2022, Hitrans entered into a lease agreement for extra staff quarters spaces in Zhejiang with a five year term commencing
on December 20, 2022 and expiring on December 19, 2027. The monthly rental payment is RMB 52,000 ($ 7,570) per month for the first year,
with 2 % increase per year.

 On
December 30, 2022, Hitrans entered into a lease agreement with liquid gas supplier for a five year term for supplying liquid nitrogen
and oxygen to December 29, 2027. The monthly rental payment is approximately RMB 7,265 ($ 1,058) per month.

 On
April 20, 2023, Hitrans entered into another lease agreement for extra staff quarters spaces in Zhejiang with a three year term commencing
on May 1, 2023 and expiring on April 30, 2026. The monthly rental payment is RMB 28,000 ($ 3,860) per month. On July 1, 2024, Hitrans entered
into an amendment to early terminate the lease and entered into a new lease for a period of two years from July 1, 2024 to June 30, 2026.
The monthly rental payment is RMB 14,000 ($ 1,995) per month.

 Nanjing
CBAK entered into a lease agreement for office and factory spaces in Nanjing for a period of one year, commencing on August 1, 2023 and
expiring on July 31, 2024. The monthly rental payment is approximately RMB 160,743 ($ 22,649) per month. The lease was renewed for three
years to August 31, 2027 with the same monthly rental.

 Shangqiu
enteted into a lease agreement for staff quarters spaces in Shangqiu with a six-year term commencing on October 1, 2023 and expiring
on September 30, 2029. The monthly rental payment is approximately RMB 11,400 ($ 1,584) per month.

 The
Company entered into a lease agreement for manufacturing and factory spaces in Shangqiu with a terms of six years, commencing on January
1, 2024 to December 31, 2029. The monthly rental payment is RMB 265,487 ($ 36,769) per month.

 On
March 1, 2024, Hitrans entered into a lease agreement with liquid gas supplier for forty-five months for supplying liquid nitrogen until
December 11, 2027. The monthly rental payment is approximately RMB 19,309 ($ 2,674) per month.

 On
April 26, 2024, Hitrans entered into a lease agreement with liquid gas supplier for a five-year term for supplying liquid argon to April
25, 2029. The monthly rental payment is approximately RMB 1,062 ($ 146) per month.

 The
Company entered into a lease agreement for staff quarters spaces in Nanjing from March 1, 2024 to February 28, 2026. The monthly rental
is RMB 22,155 ($ 3,081) per month.

 The
Company has entered into a lease agreement for staff quarters spaces in Shangqiu from May 16, 2024 to December 31, 2029 for a monthly
rental of RMB 19,404 ($ 2,765).

 The
Company entered into another lease for staff quarters spaces in Nanjing from June 1, 2024 to May 31, 2025. The monthly rental payment
is RMB 39,633 ($ 5,511) per month. The Company have the intention to extend the lease on its expiration.

 F- 34

lease expenses for the years ended December 31, 2023 and 2024 for the capitation agreement was as follows:

 2023

 2024

 lease cost – straight line

 $
 680,076

 $
 1,270,656

 (c)
 Company as lessee - Finance lease

 2023

 2024

 Property, plant and equipment, at cost

 $
 4,598,426

 $
 -

 Accumulated depreciation

 ( 828,351
)

 -

 ( 3,770,075
)

 -

 Property, plant and equipment, net under finance lease

 -

 -

 Finance lease liabilities, current

 1,643,864

 -

 Finance lease liabilities, non-current

 -

 -

 Total finance lease liabilities

 $
 1,643,864

 $
 -

 The components
of finance lease expenses for the years ended December 31, 2023 and 2024 were as follows:

 2023

 2024

 Finance lease cost:

 Depreciation of assets

 $

 114,123

 $

 -

 Interest of lease liabilities

 12,915

 79,309

 Total lease expenses

 $

 127,038

 $

 79,309

is a schedule, by years, of maturities of lease liabilities as of December 31, 2024:

 leases

 leases

 2025

 $
 1,407,127

 $
 -

 2026

 886,941

 -

 2027

 489,898

 -

 2028

 460,800

 -

 2029

 455,169

 -

 Thereafter

 436,452

 -

 Total undiscounted cash flows

 4,136,387

 -

 Less: imputed interest

 ( 418,926
)

 -

 Present value of lease liabilities

 $
 3,717,461

 $
 -

 Lease term
and discount rate:

 2023

 2024

 Weighted-average remaining lease term (years)

 Land use rights

 36.9

 35.9

 Operating leases

 2.71

 4.16

 Finance lease

 0.96

 -

 Weighted-average discount rate

 Land use rights

 Nil

 Nil

 Operating lease

 4.69
 %

 4.33
 %

 Finance lease

 1.37

 2.9
 %

 F- 35

 Supplemental
cash flow information related to leases where the Company was the lessee for the year ended December 31, 2023 and 2024 was as follows:

 2023

 2024

 cash outflows from operating assets

 $
 369,608

 $
 866,001

 12.
 Intangible
 Assets, net

 Intangible
assets as of December 31, 2023 and 2024 consisted of the followings:

 2023

 2024

 Computer software at cost

 $
 139,732

 $
 169,054

 Sewage discharge permit

 1,715,450

 1,667,907

 1,855,182

 1,836,961

 Accumulated amortization

 ( 1,013,822
)

 ( 1,453,999
)

 $
 841,360

 $
 382,962

 Amortization
expenses were $ 472,980 and $ 470,219 for the years ended December 31, 2023 and 2024, respectively.

 Total
future amortization expenses for finite-lived intangible assets were estimated as follows:

 2025

 $
 314,081

 2026

 16,191

 2027

 11,323

 2028

 8,231

 2029

 8,187

 Thereafter

 24,949

 Total

 $
 382,962

 No impairment loss was made to the carrying amounts
of the intangible assets for the years ended December 31, 2023 and 2024.

 13.
 Acquisition
 of subsidiaries

 On
July 20, 2021, CBAK Power entered into a framework agreement relating to CBAK Power's investment in Hitrans, pursuant to which
CBAK Power acquires 81.56 % of registered equity interests (or representing 75.57 % of paid-up capital) of Hitrans (the "Acquisition
Agreement"). The transfer of 81.56 % registered equity interests (representing 75.57 % of paid-up capital) of Zhejiang Hitrans to
CBAK Power has been registered with the local government and acquisition was completed on November 26, 2021.

 Upon
the closing of the Acquisition, CBAK Power became the largest shareholder of Hitrans holding 81.56 % of the Company's registered
equity interests (representing 75.57 % of paid-up capital of the Company). As required by applicable Chinese laws, CBAK Power and Management
Shareholders are obliged to make capital contributions of RMB 11.1 million ($ 1.7 million) and RMB 0.4 million ($ 0.06 million), respectively,
for the unpaid portion of Hitrans's registered capital in accordance with the articles of association of Hitrans.

 The
Company completed the valuations necessary to assess the fair values of the tangible and intangible assets acquired and liabilities assumed,
resulting from which the amount of goodwill was determined and recognized as of the respective acquisition date. The following table
summarizes the estimated aggregate fair values of the assets acquired and liabilities assumed as of the closing date, November 26, 2021.

 F- 36

 Cash and bank

 $
 7,323,654

 Debts product

 3,144

 Trade and bills receivable, net

 37,759,688

 13,616,922

 Prepayments and other receivables

 1,384,029

 Income tax recoverable

 47,138

 Amount due from trustee

 11,788,931

 Property, plant and equipment, net

 21,190,890

 Construction in progress

 2,502,757

 Intangible assets, net

 1,957,187

 Prepaid land use rights, noncurrent

 6,276,898

 Leased assets, net

 48,394

 Deferred tax assets

 1,715,998

 Short term bank loan

 ( 8,802,402
)

 Other short term loans – CBAK Power

 ( 20,597,522
)

 Trade accounts and bills payable

 ( 38,044,776
)

 Accrued expenses and other payables

 ( 7,439,338
)

 Deferred government grants

 ( 290,794
)

 Land appreciation tax

 ( 464,162
)

 Deferred tax liabilities

 ( 333,824
)

 Net assets

 29,642,812

 Less:
 Waiver of dividend payable

 1,250,181

 Total net assets acquired

 30,892,993

 Non-controlling interest ( 24.43 %)

 ( 7,547,158
)

 Goodwill

 1,606,518

 Total identifiable net

 24,952,353

 The components
of the consideration transferred to effect the Acquisition are as follows:

 RMB

 USD

 Cash consideration for 60 % registered equity interest (representing 54.39 % of paid-up capital) of Hitrans from Meidu Graphene

 118,000,000

 18,547,918

 Cash consideration for 21.56 % registered equity interest (representing 21.18 % of paid-up capital) of Hitrans from Hitrans management

 40,744,376

 6,404,435

 Total
 Purchase Consideration

 158,744,376

 24,952,353

 The
transaction resulted in a purchase price allocation of $ 1,606,518 to goodwill, representing the financial, strategic and operational
value of the transaction to the Company. Goodwill is attributed to the premium that the Company paid to obtain the value of the business
of Hitrans and the synergies expected from the combined operations of Hitrans and the Company, the assembled workforce and their knowledge
and experience in provision of raw materials used in manufacturing of lithium batteries. The total amount of the goodwill acquired is
not deductible for tax purposes and was fully impaired as of December 31, 2023 and 2024.

 14.
 Deposit
 paid for acquisition of long-term investments

 Deposit
paid for acquisition of long-term investments as of December 31, 2023 and 2024 consisted of the following:

 31,

 2023

 2024

 Investments
 in non-marketable equity

 $
 7,101,492

 $
 15,864,318

 F- 37

 On
September 27, 2023, Nanjing CBAK New Energy Technology Co., Ltd. ("Nanjing CBAK") entered into an Equity Transfer Agreement
(the "Equity Transfer Agreement") with Shenzhen BAK Battery Co., Ltd. ("SZ BAK"), under which SZ BAK shall sell
a five percent ( 5 %) equity interest in Shenzhen BAK Power Battery Co., Ltd. ("BAK SZ") to Nanjing CBAK for a purchase price
of RMB 260 million (approximately $ 35.7 million) (the "Target Equity"). Pursuant to the terms of the Equity Transfer Agreement,
Nanjing CBAK will pay the Target Equity in three (3) installments as follows: (i) RMB40 million (approximately $5.5 million) due prior
to December 31, 2023; (ii) RMB90 million (approximately $12.4 million) due prior to September 30, 2024, and (iii) the remaining Target
Equity balance of RMB130 million (approximately $17.8 million) due following SZ BAK's successful transfer to Nanjing CBAK of the
five percent (5%) equity interest in BAK SZ. Upon Nanjing CBAK having paid RMB130 million of the Target Equity, the parties shall work
together to complete the registration of equity change with the local governmental authorities. The Company has contributed RMB 115.8
million (approximately $ 15.9 million) as of December 31, 2024 and up to the date of this report. The Equity Transfer Agreement may be
terminated in writing through negotiation by all parties and the deposit paid was refundable on demand. The equity transfer process take
longer than expected. Nanjing CBAK and SZ BAK have entered into supplemental agreement on March 7, 2025 to extend the transaction period.

 SZ
BAK and BAK SZ were the Company's former subsidiary up to June 30, 2014. Mr, Xiangqian Li, the Company's former CEO, is the
director of SZ BAK and BAK SZ.

 The
Company will measure the investments in BAK SZ as non-marketable equity securities without a readily determinable fair value using a
measurement alternative that measures these securities at the cost method minus impairment, if any, plus or minus changes resulting from
observable price changes on a non-recurring basis upon the completion. The fair value of non-marketable equity securities that have been
remeasured due to impairment are classified within Level 3.

 15.
 Trade
 and Bills Payable

 Trade
and bills payable as of December 31, 2023 and 2024 consisted of the followings:

 2023

 2024

 Trade payable

 $
 26,764,807

 $
 26,317,312

 Bills payable

 – Bank acceptance bills

 55,664,768

 57,297,394

 – Letter of credit

 -

 1,109,680

 $
 82,429,575

 $
 84,724,386

 All the bills
payable are of trading nature and will mature within one year from the issue date.

 The bank
acceptance bills were pledged by:

 (i)

 the Company's bank
 deposits (Note 3);

 (ii)
 $ 0.3 million and $ 1.4 million of the Company's bills receivable as of December 31, 2023 and 2024, respectively (Note 5).

 (iii)

 the Company's prepaid land use rights (Note 11)

 F- 38

 16.
 Loans

 Bank
loans:

 Bank
borrowings as of December 31, 2023 and 2024 consisted of the followings:

 2023

 2024

 Short-term bank borrowings

 $

 32,587,676

 $

 26,087,350

 On November 16, 2021, the Company obtained banking
facilities from Shaoxing Branch of Bank of Communications Co., Ltd with a maximum amount of RMB 120.1 million (approximately $ 16.6 million)
with the term from November 18, 2021 to November 18, 2026. The facility was secured by the Company's land use rights and buildings.
In January 2023, the Company renewed the banking facilities with Shaoxing Branch of Bank of Communications Co., Ltd with a maximum amount
of RMB 160.0 million (approximately $ 22.1 million) with the term from January 2023 to December 2027. The facility was secured by the Company's
land use rights and buildings. Under the facility, the Company has borrowed RMB 142.8 million (approximately $ 20.1 million) and RMB 159.9
million (approximately $ 21.9 million) as of December 31, 2023 and 2024, respectively, bearing interest at 3.45 % to 3.65 % per annum expiring
through February to Decemeber 2025.

 On
January 17, 2022, the Company obtained a one-year term facility from Agricultural Bank of China with a maximum amount of RMB 10 million
(approximately $ 1.4 million) bearing interest at 105 % of benchmark rate of the People's Bank of China ("PBOC") for
short-term loans, which is 3.85 % per annum. The facility was guaranteed by the Company's former CEO, Mr. Yunfei Li and Mr. Yunfei
Li's wife Ms. Qinghui Yuan and secured by an unrelated third party, Jiangsu Credits Financing Guarantee Co., Ltd. The Company borrowed
RMB 10 million (approximately $ 1.4 million) on January 20, 2022 for a term until January 16, 2023. The Company repaid RMB 10 million (approximately
$ 1.4 million) early on January 5, 2023. On January 6, 2023, the Company borrowed a one -year term loan of RMB 10 million (approximately
$ 1.4 million) for a period of one year to January 4, 2024, bearing interest at 120 % of benchmark rate of the PBOC for short-term loans,
which is 3.85 % per annum, while other terms and guarantee remain the same. The Company repaid the loan on January 4, 2024.

 On
February 9, 2022, the Company obtained a one-year term facility from Jiangsu Gaochun Rural Commercial Bank with a maximum amount of RMB 10
million (approximately $ 1.4 million) bearing interest at 124 % of benchmark rate of the People's Bank of China ("PBOC")
for short-term loans, which is 4.94 % per annum. The facility was guaranteed by the Company's former CEO, Mr. Yunfei Li and Mr.
Yunfei Li's wife Ms. Qinghui Yuan. The Company borrowed RMB 10 million (approximately $ 1.4 million) on February 17, 2022 for a term
until January 28, 2023. The Company repaid RMB 10 million (approximately $ 1.4 million) on January 16, 2023. On January 17, 2023, the Company
borrowed a one-year loan of RMB 10 million (approximately $ 1.4 million) bearing interest at 129 % of benchmark rate of PBOC for short-term
loans, which is 4.70 % per annum for a term until January 13, 2024. The Company repaid the loan on January 13, 2024.

 On
April 28, 2022, the Company obtained a three-year term facility from Industrial and Commercial Bank of China Nanjing Gaochun branch,
with a maximum amount of RMB 12 million (approximately $ 1.7 million) with the term from April 21, 2022 to April 21, 2025. The facility
was guaranteed by the Company's former CEO, Mr. Yunfei Li and Mr. Yunfei Li's wife Ms. Qinghui Yuan. Under the facility,
the Company borrowed RMB 10 million (approximately $ 1.5 million) on April 29, 2022, bearing interest at 3.95 % per annum for a term until
April 29, 2023. The Company repaid RMB 10 million (approximately $ 1.4 million) on April 19, 2023. On April 20, 2023, the Company borrowed
another one-year loan of RMB 10 million (approximately $ 1.4 million) bearing interest at 102.5 % of benchmark rate of PBOC for short-term
loans, which is 3.90 % per annum for a term until April 19, 2024. The Company repaid the loan on April 19, 2024.

 On
September 25, 2022, the Company entered into another one-year term facility with Jiangsu Gaochun Rural Commercial Bank with a maximum
amount of RMB 9 million (approximately $ 1.3 million) bearing interest rate at 4.81 % per annum. The facility was guaranteed by 100 % equity
in CBAK Nanjing held by BAK Investment and the Company's former CEO, Mr. Yunfei Li and Mr. Yunfei Li's wife Ms. Qinghui Yuan.
The Company borrowed RMB 9 million (approximately $ 1.3 million) on September 27, 2022 for a term until September 24, 2023. The Company
repaid the loan on September 24, 2023.

 The
Company entered into another one-year term facility with Jiangsu Gaochun Rural Commercial Bank with a maximum amount of RMB 9 million
(approximately $ 1.2 million) bearing interest rate at 4.6 % per annum for a period from September 27, 2023 to August 31, 2024. The facility
was guaranteed by 100 % equity in CBAK Nanjing held by BAK Investment and the Company's former CEO, Mr. Yunfei Li and Mr. Yunfei
Li's wife Ms. Qinghui Yuan. The Company borrowed RMB 9 million (approximately $ 1.3 million) on September 27, 2023 for a term until
August 31, 2024. The Company repaid the loan on August 31, 2024.

 F- 39

 On
November 8, 2022, the Company entered into a short-term loan agreement with China CITIC Bank Shaoxing Branch to August 9, 2023 with a
maximum amount of RMB 10 million (approximately $ 1.4 million) bearing interest rate at 4.35 % per annum. The Company borrowed RMB 10 million
(approximately $ 1.4 million) on the same date. The Company has repaid RMB 5 million (approximately $ 0.7 million), RMB 0.2 million (approximately
$ 0.1 million) and RMB 4.8, million (approximately $ 0.7 million) on November 16, 2022, December 27, 2022 and August 9, 2023, respectively.
The Company entered into another short-term loan agreement with China CITIC Bank Shaoxing Branch for a one-year short-term loan agreement
with a maximum amount of RMB 0.2 million (approximately $ 0.1 million) for December 27, 2022 to December 27, 2023, bearing interest rate
at 4.20 % per annum. The Company entered into another loan agreement with China CITIC Bank Shaoxing Branch for a short-term loan of RMB 4.8
million (approximately $ 0.7 million) from August 10, 2023 to May 2, 2024, bearing interest rate at 4.3 % per annum. The Company repaid
the loan on May 2, 2024.

 On
December 9, 2022, the Company obtained a RMB 5 million (approximately $ 0.7 million) letter of credit from China CITIC Bank for a period
to October 30, 2023 for settlement of Hitrans purchase. The Company utilized RMB 1.5 million (approximately $ 0.2 million) letter of credit
at an interest rate of 2.7 % for a period of one year to January 5, 2023.

 On
January 7, 2023, the Company obtained a two-year term facility from Postal Savings Bank of China, Nanjing Gaochun Branch with a maximum
amount of RMB 10 million (approximately $ 1.4 million) for a period from January 7, 2023 to January 6, 2025. The facility was guaranteed
by the Company's former CEO, Mr. Yunfei Li, Mr. Yunfei Li's wife Ms. Qinghui Yuan and CBAK New Energy (Nanjing) Co., Ltd.
The Company borrowed RMB 5 million (approximately $ 0.7 million) on January 12, 2023 for a term of one year until January 11, 2024, bearing
interest at 3.65 % per annum. The Company repaid the above early on June 15, 2023. On June 27, 2023, the Company entered into another
loan agreement for one year from June 27, 2023 to June 26, 2024 under the two-year term facility for a maximum loan amount of RMB 10 million
(approximately $ 1.4 million) bearing interest rate at 3.65 % pr annum. The Company borrowed RMB 10 million (approximately $ 1.4 million)
on the same date. The loan was guaranteed by the Company's former CEO, Mr. Yunfei Li, Mr. Yunfei Li's wife Ms. Qinghui Yuan
and CBAK New Energy (Nanjing) Co., Ltd. The Company repaid the loan on June 26, 2024.

 On
March 29, 2023, the Company and Bank of China Limited entered into a short-term loan agreement for one year from March 29, 2023 to
March 28, 2024 for a maximum loan amount to RMB 5 million (approximately $ 0.7 million) bearing interest rate at 3.65 % per annum. The
Company borrowed RMB 5 million (approximately $ 0.7 million) on the same date. The loan was secured by the Company's buildings
in Dalian. The Company repaid RMB 5 million (approximately $ 0.7 million) on March 27, 2024. On March 28, 2024, the Company borrowed
another one-year loan of RMB 5 million (approximately $ 0.7 million) bearing interest rate at 3.45 % per annum. The Company early
repaid the loan on August 21, 2024.

 On
April 19, 2023, the Company and Bank of Nanjing Gaochun Branch entered into a short-term loan agreement for one year from April 10, 2023
to April 9, 2024 for RMB 10 million (approximately $ 1.4 million) bearing interest rate at 3.7 % per annum. The Company borrowed RMB 10 million
(approximately $ 1.4 million) on April 23, 2023. The loan was guaranteed by the Company's former CEO, Mr. Yunfei Li and Mr. Yunfei
Li's wife Ms. Qinghui Yuan. The Company repaid the loan on April 9, 2024.

 On
June 9, 2023, the Company and China Zheshang Bank Co., Ltd Shangyu Branch entered into a short-term loan agreement for one year from
June 9, 2023 to June 7, 2024 for a maximum loan amount to RMB 4 million (approximately $ 0.6 million) bearing interest rate at 4.55 % per
annum. The Company borrowed RMB 4 million (approximately $ 0.6 million) on the same date. The Company early repaid the loan principal and
related loan interests on December 22, 2023.

 On
July 31, 2023, the Company obtained a three-year term facility from Bank of China Gaochun Branch, with a maximum amount of RMB 10 million
(approximately $ 1.4 million) with the term from July 31, 2023 to July 30, 2026. The facility was guaranteed by the Company's former
CEO, Mr, Yunfei Li and Mr. Yunfei Li's wife Ms. Qinghui Yuan. Under the facility, the Company borrowed RMB 10 million (approximately
$ 1.4 million) on July 31, 2023, bearing interest rate at 3.15 % per annum. The Company repaid the loan on July 22, 2024

 On
August 3, 2023, the Company and Bank of China entered into a short term loan agreement for one year from August 3, 2023 to August 2,
2024 for a maximum amount of RMB 10 million (approximately $ 1.4 million) bearing interest rate at 3.55 % per annum. The Company borrowed
RMB 10 million (approximately $ 1.4 million) on September 27, 2023. The loan was secured by the Company's buildings in Dalian. The
Company repaid the loan on August 2, 2024.

 On
January 24, 2024, the Company entered into a short-term credit-guaranteed loan agreement with Zhejiang Shangyu Rural Commercial Bank
for one year to January 17, 2025 with an amount of RMB 5 million (approximately $ 0.7 million) bearing interest at 4.1 % per annum. The
Company borrowed RMB 5 million (approximately $ 0.7 million) on the same date. The Company early repaid the loan on September 27, 2024.

 F- 40

 On
March 26, 2024, the Company entered into a short-term credit-guaranteed loan agreement with Zhejiang Shangyu Rural Commercial Bank for
one year to March 25, 2025 with an amount of RMB 5 million (approximately $ 0.7 million) bearing interest at 4.1 % per annum. The Company
borrowed RMB 5 million (approximately $ 0.7 million) on the same date. The Company early repaid the loan on September 27, 2024.

 On
April 9, 2024, the Company and China Zheshang Bank Co., Ltd Shangyu Branch entered into a short-term loan agreement for one year from
April 9, 2024 to April 7, 2025 for a maximum loan amount to RMB 5.5 million (approximately $ 0.8 million) bearing interest rate at 4.05 %
per annum. The Company borrowed RMB 5.5 million (approximately $ 0.8 million) on the same date.

 On
June 24, 2024, the Company and Bank of China entered into a short-term loan agreement, with a maximum amount of RMB 10 million (approximately
$ 1.4 million) with the term from June 24, 2024 to June 20, 2025. The facility was guaranteed by the Company's former CEO, Mr, Yunfei
Li and Mr. Yunfei Li's wife Ms. Qinghui Yuan. Under the facility, the Company borrowed RMB 10 million (approximately $ 1.4 million)
on June 24, 2024, bearing interest rate at 3.0 % per annum. The Company early repaid the loan on August 23, 2024.

 On
September 29, 2024, the Company and Zhejiang Shangyu Rural Commercial Bank entered into a short-term credit-guaranteed loan agreement
for RMB 15 million (approximately $ 2.0 million) with the term of one year from September 29, 2024 to September 26, 2025 bearing 4.00 %
interest rate. The Company borrowed RMB 15 million (approximately $ 2.1 million) on the same date.

 On
December 31, 2024, the Company and China Everbright Bank Co., Ltd Shaoxing Branch entered into a short-term loan agreement for RMB 10
million (approximately $ 1.4 million) with the term of one year from December 31, 2024 to December 30, 2025 bearing 2.9 % interest rate.
The Company borrowed RMB 10 million (approximately $ 1.4 million) on the same date.

 The
Company obtained banking facilities from China Zheshang Bank Co., Ltd. Shenyang Branch with a maximum amount of RMB 390 million (approximately
$ 53.4 million) with the term from June 28, 2023 to April 29, 2025. The Company borrowed a series of acceptance bills totaling RMB 210.8
million (approximately $ 28.9 million) for various terms expiring through January to June 2025, which was secured by the Company's
pledged deposit of RMB 194.1 million (approximately $ 26.5 million (note 3), term deposit of RMB 14.6 million (approximately $ 2.0 million)
(note 4) and the Company's bills receivables of RMB 2.5 million (approximately $ 0.4 million) (Note 5).

 The
Company obtained another banking facilities from China Zheshang Bank Co., Ltd. Shenyang Branch with a maximum amount of RMB 300 million
(approximately $ 41.4 million) with the term from December 14, 2023 to April 29, 2025. The Company borrowed a series of acceptance bills
totaling RMB 55.6 million (approximately $ 7.6 million) for various terms expiring through April to June 2025, which was secured by the
Company's pledged deposit of RMB 55.6 million (approximately $ 7.6 million (note 3).

 The
Company borrowed a series of acceptance bills from Bank of Nanjing totaling RMB 37.2 million (approximately $ 5.1 million) for various
terms expiring through May to June 2025, which was secured by the Company's cash totaling RMB 37.2 million (approximately $ 5.1 million)
(note 3).

 F- 41

 The
Company borrowed a series of acceptance bills from China Zheshang Bank Co. Ltd Shangyu Branch totaling RMB 67.0 million (approximately
$ 9.2 million) for various terms expiring through January to May 2025, which was secured by the Company's pledged deposit of RMB 59.7
million (approximately $ 8.2 million) (note 3) and the Company's bills receivables of RMB 7.7 million (approximately $ 1.0 million)
(Note 5).

 The
Company borrowed a series of acceptance bills from Bank of Communications Co., Ltd. Shangyu Branch totaling RMB 47.7 million (approximately
$ 6.5 million) expiring through March to May 2025, which was secured by the Company's pledged deposit of RMB 47.7 million (approximately
$ 6.5 million) (note 3).

 The
facilities were also secured by the Company's assets with the following carrying amounts:

 2023

 2024

 Pledged deposits (note 3)

 $
 54,167,834

 $
 54,061,642

 Short-term deposits (note 4)

 -

 2,000,000

 Bills receivables (note 5)

 281,805

 1,395,874

 Right-of-use assets (note 11)

 5,287,708

 4,982,972

 Buildings

 9,707,862

 3,818,112

 $
 69,445,209

 $
 66,258,600

 As
of December 31, 2024, the Company had no unutilized committed banking facilities.

the years ended December 31, 2023 and 2024, interest of $ 1,027,351 and $ 1,115,354 were incurred on the Company's bank borrowings,
respectively.

 Other
short-term loans:

 Other
short-term loans as of December 31, 2023 and 2024 consisted of the following:

 Note

 2023

 2024

 Advance from related parties

 – Mr. Xiangqian Li, the Company's
 Former CEO

 (a)

 $

 100,000

 $

 100,000

 – Mr. Yunfei Li, the Company's Former CEO

 (b)

 160,536

 158,889

 260,536

 258,889

 Advances from unrelated third party

 – Mr. Wenwu Yu

 (c)

 1,385

 1,347

 – Ms. Longqian Peng

 (c)

 7,179

 6,980

 – Suzhou Zhengyuanwei Needle Ce Co., Ltd

 (d)

 70,452

 68,499

 79,016

 76,826

 $

 339,552

 $

 335,715

 (a)
 Advances from Mr. Xiangqian Li, the Company's former CEO, was unsecured, non-interest bearing and repayable on demand.

 (b)
 Advances from Mr. Yunfei Li, the Company's former CEO, was unsecured, non-interest bearing and repayable on demand.

 (c)
 Advances from unrelated third parties were unsecured, non-interest bearing and repayable on demand.

 (d)
 In 2019, the Company entered into a short term loan agreement with Suzhou Zhengyuanwei Needle Ce Co., Ltd, an unrelated party to loan RMB 0.6 million (approximately $ 0.1 million), bearing annual interest rate of 12 %. As of December 31, 2024, loan amount of RMB 0.5 million ($ 68,499) remained outstanding.

the years ended December 31, 2023 and 2024, interest of $ 8,062 and $ 8,343 were incurred on the Company's borrowings from unrelated
parties, respectively.

 F- 42

 17.
 Accrued
 Expenses and Other Payables

 Accrued
expenses and other payables as of December 31, 2023 and 2024 consisted of the following:

 2023

 2024

 Construction costs payable

 $
 15,571,808

 $
 11,570,384

 Equipment purchase payable

 13,665,499

 10,871,081

 Liquidated damages*

 1,210,119

 1,210,119

 Accrued staff costs

 3,386,142

 6,253,168

 Customer deposits

 2,875,131

 6,856,137

 Deferred revenue (note 2m)

 784,000

 4,831,774

 Accrued expenses

 2,118,121

 2,059,252

 Interest payables

 59,524

 69,927

 Other tax payables

 775,754

 1,175,339

 Dividend payable to non-controlling interest
 to Hitrans

 1,256,745

 1,221,915

 Payables to suppliers for non-operating agency-based service

 -

 11,981,065

 Other payable

 289,697

 185,474

 $
 41,992,540

 $
 58,285,635

 *
 On August 15, 2006, the SEC declared effective a post-effective amendment that the Company had filed on August 4, 2006, terminating the effectiveness of a resale registration statement on Form SB-2 that had been filed pursuant to a registration rights agreement with certain shareholders to register the resale of shares held by those shareholders. The Company subsequently filed Form S-1 for these shareholders. On December 8, 2006, the Company filed its Annual Report on Form 10-K for the year ended September 30, 2006 (the "2006 Form 10-K"). After the filing of the 2006 Form 10-K, the Company's previously filed registration statement on Form S-1 was no longer available for resale by the selling shareholders whose shares were included in such Form S-1. Under the registration rights agreement, those selling shareholders became eligible for liquidated damages from the Company relating to the above two events totaling approximately $ 1,051,000. As of December 31, 2023 and 2024, no liquidated damages relating to both events have been paid.

 On
November 9, 2007, the Company completed a private placement for the gross proceeds to the Company of $ 13,650,000 by selling 3,500,000
shares of common stock at the price of $ 3.90 per share. Roth Capital Partners, LLC acted as the Company's exclusive financial advisor
and placement agent in connection with the private placement and received a cash fee of $ 819,000. The Company may have become liable
for liquidated damages to certain shareholders whose shares were included in a resale registration statement on Form S-3 that the Company
filed pursuant to a registration rights agreement that the Company entered into with such shareholders in November 2007. Under the registration
rights agreement, among other things, if a registration statement filed pursuant thereto was not declared effective by the SEC by the
100th calendar day after the closing of the Company's private placement on November 9, 2007, or the "Effectiveness Deadline",
then the Company would be liable to pay partial liquidated damages to each such investor of (a) 1.5% of the aggregate purchase price
paid by such investor for the shares it purchased on the one month anniversary of the Effectiveness Deadline; (b) an additional 1.5%
of the aggregate purchase price paid by such investor every thirtieth day thereafter (pro rated for periods totaling less than thirty
days) until the earliest of the effectiveness of the registration statement, the ten-month anniversary of the Effectiveness Deadline
and the time that the Company is no longer required to keep such resale registration statement effective because either such shareholders
have sold all of their shares or such shareholders may sell their shares pursuant to Rule 144 without volume limitations; and (c) 0.5%
of the aggregate purchase price paid by such investor for the shares it purchased in the Company's November 2007 private placement
on each of the following dates: the ten-month anniversary of the Effectiveness Deadline and every thirtieth day thereafter (prorated
for periods totaling less than thirty days), until the earlier of the effectiveness of the registration statement and the time that the
Company no longer is required to keep such resale registration statement effective because either such shareholders have sold all of
their shares or such shareholders may sell their shares pursuant to Rule 144 without volume limitations. Such liquidated damages would
bear interest at the rate of 1% per month (prorated for partial months) until paid in full.

 F- 43

 On
December 21, 2007, pursuant to the registration rights agreement, the Company filed a registration statement on Form S-3, which was declared
effective by the SEC on May 7, 2008. As a result, the Company estimated liquidated damages amounting to $ 561,174 for the November 2007
registration rights agreement. As of December 31, 2023 and 2024, the Company had settled the liquidated damages with all the investors
and the remaining provision of approximately $ 159,000 was included in other payables and accruals.

 18.
 Balances
 and Transactions with Related Parties

 The
principal related parties with which the Company had transactions during the years presented are as follows:

 Name of Entity or Individual

 Relationship with the Company

 New Era Group Zhejiang New Energy Materials Co., Ltd.

 Shareholder of company's subsidiary

 Zhengzhou BAK Battery Co., Ltd

 Note a

 Shenzhen BAK Battery Co., Ltd ("SZ BAK")

 Former subsidiary and refer to Note b

 Shenzhen BAK Power Battery Co., Ltd ("BAK SZ")

 Former subsidiary and refer to Note b

 Zhejiang Shengyang Renewable Resources Technology Co., Ltd.

 Note c

 Fuzhou BAK Battery Co., Ltd

 Note d

 Zhengzhou BAK Electronics Co., Ltd

 Note e

 Zhengzhou BAK New Energy Vehicle Co., Ltd

 Note f

 (a)
 Mr. Xiangqian Li, the Company's former CEO, is a director of Zhengzhou BAK Battery Co., Ltd. Zhengzhou BAK Battery Co., Ltd is a wholly owned subsidiary of BAK SZ.

 (b)
 Mr. Xiangqian Li, the Company's former CEO, is a director of Shenzhen BAK Battery Co., Ltd and Shenzhen BAK Power Battery Co., Ltd. On September 27, 2023, Nanjing CBAK New Energy Technology Co., Ltd. ("Nanjing CBAK") entered into an Equity Transfer Agreement (the "Equity Transfer Agreement") with Shenzhen BAK Battery Co., Ltd. ("SZ BAK"), under which SZ BAK shall sell a five percent ( 5 %) equity interest in Shenzhen BAK Power Battery Co., Ltd. ("BAK SZ") to Nanjing CBAK for a purchase price of RMB 260 million (approximately $ 35.7 million) (note 14).

 (c)
 On September 27, 2023, Hitrans entered into an Equity Transfer Contract (the "Equity Transfer Contract") with Mr. Shengyang Xu, pursuant to which Hitrans will initially acquire a 26 % equity interest in Zhejiang Shengyang Renewable Resources Technology Co., Ltd. ("Zhejiang Shengyang") from Mr. Xu, an individual who currently holds 97 % of Zhejiang Shengyang, for a price of RMB 28.6 million (approximately $ 3.9 million) (the "Initial Acquisition"). Neither Mr. Xu, nor Zhejiang Shengyang is related to the Company.

 (d)
 Zhengzhou BAK Battery Co., Ltd has 51 % equity interest in Fuzhou BAK Battery Co., Ltd. Zhengzhou BAK Battery Co., Ltd is a wholly owned subsidiary of BAK SZ.

 (e)
 Mr. Xiangqian Li, the Company's former CEO, is a director of BAK SZ, which has 95 % equity interests in Zhengzhou BAK Electronics Co., Ltd.

 (f)
 Shenzhen BAK Battery Co., Ltd was the former shareholder of Zhengzhou BAK New Energy Vehicle Co., Ltd to April 10, 2023.

 F- 44

 Related
party transactions

 The Company
entered into the following significant related party transactions:

 For
 the
 year ended
 2023

 For
 the
 year ended
 2024

 Purchase
 of batteries from Zhengzhou BAK Battery Co., Ltd

 $
 10,999,732

 $
 7,049,867

 Purchase
 of batteries from Fuzhou BAK Battery Co., Ltd

 -

 69,133

 Purchase
 of materials from Zhejiang Shengyang

 12,725,193

 4,352,197

 Purchase
 of materials from Zhejiang Shengyang in relation to non-operating agency-based service

 -

 1,794,581

 Sales
 of cathode raw materials to Zhengzhou BAK Battery Co., Ltd

 27,872,002

 18,661,537

 Sales
 of cathode raw materials to BAK SZ

 66,560

 31,783

 Sales
 of cathode raw materials to Zhengzhou BAK Electronics Co., Ltd

 590,834

 388,430

 Sales
 of batteries to Fuzhou BAK Battery Co., Ltd

 105,010

 76,090

 Sales
 of batteries to Zhengzhou BAK Battery Co., Ltd

 -

 12,232

 Related
party balances

 Apart
from the above, the Company recorded the following significant related party balances as of December 31, 2023 and 2024:

 Receivables
from former subsidiary

 2023

 2024

 Receivables
 from BAK SZ

 $
 74,946

 $
 12,399

as of December 31, 2023 and 2024 represented trade receivable for sales of cathode raw materials to BAK SZ.

 Other
balances due from/ (to) related parties

 2023

 2024

 Trade receivable,
 net – Zhengzhou BAK Battery Co., Ltd (i)

 $
 12,441,715

 $
 5,970,184

 Trade receivable, net
 – Zhengzhou BAK Electronics Co., Ltd. (ii)

 $
 226,143

 $
 135,012

 Bills receivable –
 Issued by Zhengzhou BAK Battery Co., Ltd (iii)

 $
 -

 $
 459,905

 Prepayment to supplier
 – Zhengzhou BAK Battery Co., Ltd (iv)

 $
 -

 $
 3,738,228

 Prepayment to supplier
 – Zhengzhou BAK New Energy Vehicle Co., Ltd (v)

 $

 $
 205,496

 Trade payable, net –
 Zhengzhou BAK Battery Co., Ltd (vi)

 $
 803,685

 $
 66,084

 Trade payable, net –
 Zhejiang Shengyang (vii)

 $
 3,489,324

 $
 1,486,765

 Payable for non-operating
 agency-based service – Zhejiang Shengyang (viii)

 $
 -

 $
 1,338,794

 Deposit paid for acquisition
 of long-term investments – BAK SZ (note 14)

 $
 7,101,492

 $
 15,864,318

 Dividend payable to non-controlling
 interest of Hitrans (note 17)

 $
 1,256,745

 $
 1,221,915

 (i)
 Representing trade receivable from sales of cathode raw materials to Zhengzhou BAK Battery Co., Ltd. Up to the date of this report, Zhengzhou BAK Battery Co., Ltd. repaid $ 4.5 million to the Company.

 (ii)
 Representing trade receivables from sales of cathode raw materials to Zhengzhou
BAK Electronics Co., Ltd. Up to the date of this report, Zhengzhou BAK Electronics Co., Ltd repaid $ 107,064 to the Company.

 (iii)
 Representing bills receivable issued by Zhengzhou BAK Battery Co., Ltd.as of December 31, 2024 were pledged to bank as security for issuance of bills payable (note 16).

 F- 45

 (iv)
 Representing the prepayments to Zhengzhou BAK Battery Co., Ltd for purchase of batteries. The balance was not utilized up to the date of this report.

 (v)
 Representing the prepayments for purchase of raw materials for manufacturing. The contract was cancelled and up to the date of this report, the prepayment was refunded to the Company.

 (vi)
 Representing trade payables on purchase of batteries. Up to the date of this report, the Company settled nil to Zhengzhou BAK Battery Co., Ltd.

 (vii)
 Representing trade payables on purchase of materials for manufacturing from Zhejiang Shengyang. Up to the date of this report, the Company settled in full to Zhejiang Shengyang.

 (viii)
 Representing payables on
purchase of materials from Zhejiang Shengyang in relation to non-operating agency-based service. Up to the date of this report, the Company
settled $ 0.7 million to Zhejiang Shengyang.

 Payables
to a former subsidiary

 Payables
to a former subsidiary as of December 31, 2023 and 2024 consisted of the following:

 2023

 2024

 Payables to Shenzhen BAK Power
 Battery Co., Ltd

 $
 ( 411,111
)

 $
 ( 419,849
)

as of December 31, 2023 and 2024 consisted of payables for purchase of inventories from Shenzhen BAK Power Battery Co., Ltd.

 19.
 Government Grants

government grants as of December 31, 2023 and 2024 consist of the following:

 2023

 2024

 Total government grants

 $
 6,578,863

 $
 8,136,469

 Less: Current portion

 ( 375,375
)

 ( 556,214
)

 Non-current portion

 $
 6,203,488

 $
 7,580,255

 Government
grants that are received in advance are deferred and recognized in the consolidated statements of operations over the period necessary
to match them with the costs that they are intended to compensate. Government grants in relation to the achievement of stages of research
and development projects are recognized in the consolidated statements of operations when amounts have been received and all attached
conditions have been met. Non-refundable grants received without any further obligations or conditions attached are recognized immediately
in the consolidated statements of operations.

 On
October 17, 2014, the Company received a subsidy of RMB 46,150,000 pursuant to an agreement with the Management Committee dated July 2,
2013 for costs of land use rights and to be used to construct the new manufacturing site in Dalian. Part of the facilities had been completed
and was operated in July 2015 and the Company has initiated amortization on a straight-line basis over the estimated useful lives of
the depreciable facilities constructed thereon.

 On
June 23, 2020, BAK Asia, the Company wholly-owned Hong Kong subsidiary, entered into a framework investment agreement with Jiangsu Gaochun
Economic Development Zone Development Group Company ("Gaochun EDZ"), pursuant to which the Company intended to develop certain
lithium battery projects that aim to have a production capacity of 8Gwh. Gaochun EDZ agreed to provide various support to facilitate
the development and operation of the projects. As of the date of this report, the Company received RMB 47.1 million (approximately $ 6.82
million) subsidy from Gaochun EDZ. The Company will recognize the government subsidies as income or offsets them against the related
expenditures when there are no present or future obligations for the subsidized projects.

 F- 46

 For
the year ended December 31, 2021, the Company recognized RMB 10 million ($ 1.6 million) as other income after moving of the Company facilities
to Nanjing. Remaining subsidy of RMB 37.1 million (approximately $ 5.9 million) was granted to facilities the construction works and equipment
in Nanjing. The construction works have been completed in November 2021 and the production line was fully operated in January 2022. The
Company has initiated amortization on a straight-line basis over the estimated useful lives of the depreciable facilities constructed
thereon.

 On
November 2, 2023, the Company received a subsidiary of RMB 8.4 million ($ 1.2 million) for its development of new production line. The
Company has initiated amortization on a straight-line basis over the estimated useful lives of the depreciable facilities constructed
thereon.

 On
December 12, 2024, Hitrans received RMB 11.42 million ($ 1.6 million) from Development and Reform Bureau of Shangyu District, Shaoxing
for the purpose to facilitate the development of new production line. The Company will recognize the subsidies as income or offsets them
against the related expenditures when there are no present or future obligations for the subsidized projects.

 Government
grants were recognized in the consolidated statements of operations as follows:

 2023

 2024

 Cost of revenues

 $

 1,253,899

 $

 535,405

 Research and development

 16,710

 16,433

 General and administrative

 38,261

 37,626

 Other income (expenses),
 net

 153,153

 672,802

 $

 1,462,023

 $

 1,262,266

 20.
 Warranty Provisions

 The
Company maintains a policy of providing after sales support for certain of its new EV and LEV battery products introduced since October
1, 2015 by way of a warranty program. The limited cover covers a period of six to twenty four months for battery cells, a period of twelve
to twenty seven months for battery modules for light electric vehicles (LEV) such as electric bicycles, and a period of three years to
eight years (or 120,000 or 200,000 km if reached sooner) for battery modules for electric vehicles (EV). The Company accrues an estimate
of its exposure to warranty claims based on both current and historical product sales data and warranty costs incurred. The Company assesses
the adequacy of its recorded warranty liability at least annually and adjusts the amounts as necessary.

 Warranty
expense is recorded as a component of sales and marketing expenses. Accrued warranty activity consisted of the following:

 2023

 2024

 Balance at beginning of year

 $
 476,828

 $
 546,444

 Warranty costs incurred

 ( 16,359
)

 ( 245,328
)

 Provision (reversal) for the year

 66,182

 156,832

 19,793

 ( 13,834
)

 Balance at end of year

 546,444

 444,114

 Less: Current portion

 ( 23,870
)

 ( 23,426
)

 Non-current portion

 $
 522,574

 $
 420,688

 F- 47

 21.
 Taxes, Deferred Tax Assets and Deferred Tax Liabilities

 (a)

 Income taxes in the
 consolidated statements of comprehensive loss(income)

 The
Company's provision for income taxes expenses consisted of:

 2023

 2024

 PRC income tax

 $

 $

 Current income tax expenses, net

 -

 1,558,613

 Deferred income tax

 2,486,145

 -

 $
 2,486,145

 $
 1,558,613

 United
States Tax

 CBAK
is a Nevada corporation that is subject to U.S. federal tax and state tax. On December 31, 2017 the U.S. government enacted comprehensive
tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act"). The Tax Act makes broad and complex changes
to the U.S. tax code, including, but not limited to, (1) reducing the U.S. federal corporate income tax rate from 35 percent to 21 percent;
(2) requiring companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries; (3) generally eliminating
U.S. federal corporate income taxes on dividends from foreign subsidiaries; (4) providing modification to subpart F provisions and new
taxes on certain foreign earnings such as Global Intangible Low-Taxed Income (GILTI). Except for the one-time transition tax, most of
these provisions go into effect starting January 1, 2018.

 The
Global Intangible Low-taxed Income (GILTI) is a new provision introduced by the Tax Cuts and Jobs Act. U.S. shareholders, who are domestic
corporations, of controlled foreign corporations (CFCs) are eligible for up to an 80 % deemed paid foreign tax credit (FTC) and a 50 %
deduction of the current year inclusion with the full amount of the Section 78 gross-up subject to limitation. This new provision is
effective for tax years of foreign corporations beginning after December 31, 2017. The Company has evaluated whether it has additional
provision amount resulted by the GILTI inclusion on current earnings and profits of its foreign controlled corporations. The Company
has made an accounting policy choice of treating taxes due on future U.S. inclusions in taxable amount related to GILTI as a current
period expense when incurred. As of December 31, 2023 and 2024, the Company does not have any aggregated positive tested income; and
as such, does not have additional provision amount recorded for GILTI tax.

 No
provision for income taxes in the United States has been made as CBAK had no taxable income for the years ended December 31, 2023 and
2024.

 Hong
Kong Tax

 The
Company's subsidiaries in Hong Kong are subject to Hong Kong profits tax rate of 16.5 % and did not have any assessable profits
arising in or derived from Hong Kong for the years ended December 31, 2023 and 2024 and accordingly no provision for Hong Kong profits
tax was made in these periods.

 PRC
Tax

 The
CIT Law in China applies an income tax rate of 25 % to all enterprises but grants preferential tax treatment to High-New Technology Enterprises.
CBAK Power was regarded as a "High-new technology enterprise" pursuant to a certificate jointly issued by the relevant Dalian
Government authorities. Under the preferential tax treatment, CBAK Power was entitled to enjoy a tax rate of 15 % for the years from 2021
to 2024 provided that the qualifying conditions as a High-new technology enterprise were met. Hitrans was regarded as a "High-new
technology enterprise" pursuant to a certificate jointly issued by the relevant Zhejiang Government authorities. Under the preferential
tax treatment, Hitrans was entitled to enjoy a tax rate of 15 % for the years from 2021 to 2024 provided that the qualifying conditions
as a High-new technology enterprise were met. Nanjing CBAK was regarded as a "High-new technology enterprise" pursuant to
a certificate jointly issued by the relevant Nanjing Government authorities. Under the preferential tax treatment, Nanjing CBAK was entitled
to enjoy a tax rate of 15 % for the years from 2023 to 2025 provided that the qualifying conditions as a High-new technology enterprise
were met.

 F- 48

 A
reconciliation of the provision for income taxes determined at the statutory income tax rate to the Company's income taxes is as
follows:

 Year
 ended
 2023

 Year
 ended
 2024

 Income (loss) before income taxes

 $
 ( 6,053,182
)

 $
 11,143,763

 United States federal
 corporate income tax rate

 %

 %

 Income tax credit computed at United States
 statutory corporate income tax rate

 ( 1,271,168
)

 2,340,190

 Reconciling items:

 Over provision of deferred taxation in prior
 year

 Rate differential for PRC earnings

 ( 160,672
)

 524,791

 Tax effect of entity at preferential tax rate

 1,918,084

 ( 1,751,421
)

 Non-deductible (income) expenses

 171,936

 ( 108,841
)

 Share based payments

 257,407

 79,096

 Utilization of tax loss

 -

 ( 1,640,692
)

 Tax effect of utilization of tax losses previously
 not recognised

 ( 222,354
)

 ( 274,323
)

 Valuation allowance on deferred tax assets

 1,792,912

 3,156,312

 Decrease in opening
 deferred tax assets resulting from a decrease in applicable tax rate

 -

 ( 766,499
)

 Income tax expenses

 $
 2,486,145

 $
 1,558,613

 (b)

 Deferred tax assets
 and deferred tax liabilities

 The
tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of December
31, 2023 and 2024 are presented below:

 2023

 2024

 Deferred tax assets

 Trade receivable

 $
 1,156,095

 723,916

 2,942,702

 591,678

 Property, plant and equipment

 2,398,035

 1,992,540

 Non-marketable equity securities

 157,432

 91,842

 Equity method investment

 380,982

 343,850

 Intangible assets

 31,601

 133,684

 Accrued expenses, payroll and others

 541,665

 614,417

 Provision for product warranty

 136,611

 66,617

 Net operating loss carried forward

 36,103,945

 38,116,873

 Valuation allowance

 ( 43,645,828
)

 ( 42,522,990
)

 tax assets, non-current

 $
 203,240

 152,427

 Deferred tax liabilities,
 non-current

 Long-lived assets arising
 from acquisitions

 $
 203,240

 $
 152,427

 As
of December 31, 2024, the Company's U.S. entity had net operating loss carry forwards of $ 103,580,741, of which $ 102,293 available
to reduce future taxable income which will expire in various years through 2035 and $ 103,478,448 available to offset capital gains recognized
in the succeeding 5 tax years. As of December 31, 2024, the Company's PRC subsidiaries had net operating loss carry forwards of
$ 57,318,310, which will expire in various years through 2024 to 2033. Management believes it is more likely than not that the Company
will not realize these potential tax benefits as these operations will not generate any operating profits in the foreseeable future.
As a result, a valuation allowance was provided against the full amount of the potential tax benefits.

to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational
errors made by the taxpayer or its withholding agent. The statute of limitations extends to five years under special circumstances, which
are not clearly defined. In the case of a related party transaction, the statute of limitations is ten years. There is no statute of
limitations in the case of tax evasion.

 The
impact of an uncertain income tax positions on the income tax return must be recognized at the largest amount that is more likely than
not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less
than a 50 % likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions
for income taxes.

 F- 49

 22.
 Statutory
 reserves

 As
stipulated by the relevant laws and regulations in the PRC, company established in the PRC (the "PRC subsidiary") is required
to maintain a statutory reserve made out of profit for the year based on the PRC subsidiary' statutory financial statements which
are prepared in accordance with the accounting principles generally accepted in the PRC. The amount and allocation basis are decided
by the director of the PRC subsidiary annually and is not to be less than 10 % of the profit for the year of the PRC subsidiary. The aggregate
amount allocated to the reserves will be limited to 50 % of registered capital for certain subsidiaries. Statutory reserve can be used
for expanding the capital base of the PRC subsidiary by means of capitalization issue.

 In
addition, as a result of the relevant PRC laws and regulations which impose restriction on distribution or transfer of assets out of
the PRC statutory reserve, $ 1,230,511 and $ 1,230,511 representing the PRC statutory reserve of the subsidiary as of December 31, 2023
and 2024, are also considered under restriction for distribution.

 23.
 Fair
 Value of Financial Instruments

 ASC
Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset
or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly
transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy, which requires classification
based on observable and unobservable inputs when measuring fair value. Certain current assets and current liabilities are financial instruments.
Management believes their carrying amounts are a reasonable estimate of fair value because of the short period of time between the origination
of such instruments and their expected realization and, if applicable, their current interest rates are equivalent to interest rates
currently available. The three levels of valuation hierarchy are defined as follows:

 Level 1 inputs to the valuation
 methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

 Level 2 inputs to the valuation
 methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets
 or liability, either directly or indirectly, for substantially the full term of the financial instruments.

 Level 3 inputs to the valuation
 methodology are unobservable and significant to the fair value measurement.

 The
fair value of warrants was determined using the Binomial Model, with level 3 inputs (Note 27).

 The
fair value of share options was determined using the Binomial Model, with level 3 inputs (Note 25).

 The
carrying amounts of financial assets and liabilities, such as cash and cash equivalents, pledged deposits, trade accounts and bills receivable,
other receivables, balances with former subsidiaries, notes payable, other short-term loans, short-term and long-term bank loans and
other payables approximate their fair values because of the short maturity of these instruments or the rate of interest of these instruments
approximate the market rate of interest.

 24.
 Employee
 Benefit Plan

 Full
time employees of the Company in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension
benefits, medical care, employee housing fund and other welfare benefits are provided to the employees. The Company accrues for these
benefits based on certain percentages of the employees' salaries, up to a maximum amount specified by the local government. The
total employee benefits expensed as incurred were $ 2,952,247 (RMB 20,877,994) and $ 6,524,654 (RMB 46,920,747) for the years ended December
31, 2023 and 2024, respectively.

 F- 50

 25.
 Share-based
 Compensation

Shares and Restricted Share Units

shares granted on June 30, 2015

 On
June 12, 2015, the Board of Director approved the CBAK Energy Technology, Inc. 2015 Equity Incentive Plan (the "2015 Plan")
for Employees, Directors and Consultants of the Company and its Affiliates. The maximum aggregate number of Shares that may be issued
under the Plan is ten million ( 10,000,000) Shares.

 On
June 30, 2015, pursuant to the 2015 Plan, the Compensation Committee of the Company's Board of Directors granted an aggregate of
 690,000 restricted shares of the Company's common stock, par value $ 0.001, to certain employees, officers and directors of the
Company with a fair value of $ 3.24 per share on June 30, 2015. In accordance with the vesting schedule of the grant, the restricted shares
will vest in twelve equal quarterly installments on the last day of each fiscal quarter beginning on June 30, 2015 (i.e. last vesting
period: quarter ended March 31, 2018). The Company recognizes the share-based compensation expenses on a graded-vesting method.

 All
the restricted shares granted in respect of the restricted shares granted on June 30, 2015 have been vested on March 31, 2018.

 As
of December 31, 2024, there was no unrecognized stock-based compensation associated with the above restricted shares. As of December
31, 2024, 1,667 vested shares were to be issued.

shares granted on April 19, 2016

 On
April 19, 2016, pursuant to the Company's 2015 Plan, the Compensation Committee of the Board of Directors of the Company granted
an aggregate of 500,000 restricted shares of the Company's common stock, par value $ 0.001, to certain employees, officers and directors
of the Company, of which 220,000 restricted shares were granted to the Company's executive officers and directors. There are three
types of vesting schedules. First, if the number of restricted shares granted is below 3,000, the shares will vest annually in 2 equal
installments over a two-year period with the first vesting on June 30, 2017. Second, if the number of restricted shares granted is larger
than or equal to 3,000 and is below 10,000, the shares will vest annually in 3 equal installments over a three year period with the first
vesting on June 30, 2017. Third, if the number of restricted shares granted is above or equal to 10,000, the shares will vest semi-annually
in 6 equal installments over a three year period with the first vesting on December 31, 2016. The fair value of these restricted shares
was $ 2.68 per share on April 19, 2016. The Company recognizes the share-based compensation expenses over the vesting period (or the requisite
service period) on a graded-vesting method.

 All
the restricted shares granted in respect of the restricted shares granted on April 16, 2016 had been vested on June 30, 2019.

 As
of December 31, 2024, there was no unrecognized stock-based compensation associated with the above restricted shares and 4,167 vested
shares were to be issued.

share units granted on October 23, 2020

 On
October 23, 2020, pursuant to the Company's 2015 Plan, the Compensation Committee granted an aggregate of 100,000 restricted share
units of the Company's common stock to an employee of the Company. In accordance with the vesting schedule of the grant, the restricted
shares will vest semi-annually in 6 equal installments over a three year period with the first vesting on October 30, 2020. The fair
value of these restricted shares was $ 3 per share on October 23, 2020. The Company recognizes the share-based compensation expenses over
the vesting period (or the requisite service period) on a graded-vesting method.

 F- 51

 The
Company recorded non-cash share-based compensation expense of $ 6,529 and nil for the years ended December 31, 2023 and 2024, in respect
of the restricted shares granted on October 23, 2020 of which allocated to research and development expenses.

 All
the restricted share units granted on October 23, 2020 had been vested on April 30, 2023. As of December 31, 2024, there was no unrecognized
stock-based compensation with the above restricted share units.

 Employees
Stock Ownership Program on November 29, 2021

 On
November 29, 2021, pursuant to the Company's 2015 Plan, the Compensation Committee granted options to obtain an aggregate of 2,750,002
share units of the Company's common stock to certain employees, officers and directors of the Company, of which options to obtain
 350,000 share units were given to the Company's executive officers and directors with an option exercise price of $ 1.96 based on
fair market value. The vesting of shares each year is subject to certain financial performance indicators. The shares will be vested
semi-annually in 10 equal installments over a five year period with the first vesting on May 30, 2022. The options will expire
on the 70-month anniversary of the grant date.

 The fair value of the stock options granted to directors
of the Company is estimated on the date of the grant using the Binomial Model. The fair value of the options was calculated using the
following assumptions: estimated life of six months to five years, volatility of 106.41 %, risk free interest rate of 1.26 %, and dividend
yield of 0 %. The fair value of 350,000 stock options to directors of the Company was $ 479,599 at the grant date. During the year
ended December 31, 2023 and 2024, the Company recorded nil as stock compensation expenses, respectively.

 The
fair value of the stock options granted to certain employees and officers of the Company is estimated on the date of the grant using
the Binomial Model. The fair value of the options was calculated using the following assumptions: estimated life of six months to five
years, volatility of 106.41 %, risk-free interest rate of 1.26 % and dividend yield of 0 %. The fair value of 2,400,002 stock options to
certain employees and officers of the Company was $ 2,805,624 at the grant date. During the years ended December 31, 2023 and 2024, the
Company recorded nil as stock compensation expenses, respectively.

 As
of December 31, 2024, there was unrecognized stock-based compensation $ 662,116 associated with the above options granted.

share units granted and stock ownership program on April 11, 2023

 On
April 11, 2023, pursuant to the Company's 2015 Plan, the Compensation Committee granted an aggregate of 894,000 restricted share
units and 2,124,000 options to certain employees, officers and directors of the Company, of which 230,000 restricted share units and
 460,000 options were granted to the Company's executive officers and directors. The restricted share units will vest semi-annually
on June 30, 2023 and December 31, 2023. The fair value of these restricted shares units was $ 0.95 per share on April 11, 2023. The Company
recognizes the share-based compensation expenses over the vesting period (or the requisite service period) on a graded-vesting method.
The option exercise price was $ 0.9780. The shares will be vested semi-annually in 4 equal installments over a 2 year period with the
first vesting on June 30, 2024. The options will expire on the 70-month anniversary of the grant date.

 The
Company recorded non-cash share-based compensation expense of $ 831,250 and nil for the years ended December 31, 2023 and 2024, respectively,
in respect of the restricted share units granted on April 11, 2023.

 The
fair value of the stock options granted to directors and certain employees and officers of the Company is estimated on the date of the
grant using the Binomial Model. The fair value of the options was calculated using the following assumptions: estimate life of 5.83 years,
volatility of 106.59 %, risk free interest rate of 3.51 % and dividend yield of 0 %. The fair value of options of the Company was $ 838,190
at the grant date. The Company recorded $ 343,960 and $ 341,054 as share-based compensation expenses in respect of the stock options granted
on April 11, 2023 for the years ended December 31, 2023 and 2024, respectively.

 F- 52

 All the restricted share units granted on April 11,
2023 had been vested on December 31, 2023. As of December 31, 2024, there was unrecognized stock-based compensation of $ 50,155 associated
with the above option granted.

share units granted and stock ownership program on August 22, 2023

 On
August 22, 2023, pursuant to the Company's 2015 Plan, the Compensation Committee granted an aggregate of 40,000 restricted share
units and 160,000 options to employees of the Company. The restricted share units will vest semi-annually on October 15, 2023 and April
15, 2023. The fair value of these restricted shares units was $ 0.88 per share on August 22, 2023. The Company recognizes the share-based
compensation expenses over the vesting period (or the requisite service period) on a graded-vesting method. The option exercise price
was $ 0.8681. The shares will be vested semi-annually in 4 equal instalments over a two year period with the first vesting on February
15, 2025. The options will expire on the 70-month anniversary of the grant date.

 The
Company recorded non-cash share-based compensation expense of $ 34,086 and $ 7,872 for the years ended December 31, 2023 and 2024, respectively,
in respect of the restricted share units granted on August 22, 2023.

 The
fair value of the stock options granted to directors and certain employees and officers of the Company is estimated on the date of the
grant using the Binomial Model. The fair value of the options was calculated using the following assumptions: estimate life of 5.83 years,
volatility of 106.34 %, risk free interest rate of 4.47 % and dividend yield of 0 %. The fair value of options of the Company was $ 56,521
at the grant date. For the years ended December 31, 2023 and 2024, the Company recorded $ 9,922 and $ 27,722, respectively, as share-based
compensation expenses in respect of the stock options granted on August 22, 2023.

 As
of December 31, 2024, non-vested restricted share units granted on August 22, 2023 are as follows:

 Non-vested share units as of August 22, 2023

 Granted

 40,000

 Vested

 ( 20,000
)

 Forfeited

 -

 Non-vested share units as of December 31, 2023

 20,000

 Vested

 ( 20,000
)

 Non-vested share units as of December 31,
 2024

 -

 As
of December 31, 2024, there was unrecognized stock-based compensation $ 20,153 associated with the above options granted.

 Stock
option activity under the Company's stock-based compensation plans is shown below:

 Number of
 Shares

 Average
 Exercise Price
 per Share

 Aggregate
 Intrinsic
 Value*

 Weighted
 Average
 Remaining
 Contractual
 Term in
 Years

 Outstanding at January 1, 2024

 3,314,128

 1.30

 -

 4.3

 Exercisable at January 1, 2024

 546,338

 1.96

 $
 -

 4.7

 Granted

 -

 -

 -

 -

 Exercised

 -

 -

 -

 -

 Forfeited

 ( 973,958
)

 1.72

 -

 -

 Outstanding at December 31, 2024

 1,455,170

 $
 1.31

 $
 -

 3.4

 Exercisable at December 31, 2024

 1,434,958

 $
 1.35

 $
 -

 3.4

 *
 The intrinsic value of the stock options at December 31, 2024 is the amount by which the market value of the Company's common stock of $ 0.94 as of December 31, 2024 exceeds the average exercise price of the option. As of December 31, 2024, the intrinsic value of the outstanding and exercisable stock options was $ nil.

 As
the Company itself is an investment holding company which is not expected to generate operating profits to realize the tax benefits arising
from its net operating loss carried forward, no income tax benefits were recognized for such stock-based compensation cost under the
stock option plan for the year ended December 31, 2023 and 2024.

 F- 53

 26.
 (Loss) Per Share

 Basic
EPS is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS is computed
similar to basic net income per share except that the denominator is increased to include the number of additional common shares that
would have been outstanding if all the potential common shares pertaining to warrants, stock options, and similar instruments had been
issued and if the additional common shares were dilutive. Diluted earnings per share are based on the assumption that all dilutive convertible
shares and stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method for the
outstanding unvested restricted stock, options and warrants, and the if-converted method for the outstanding convertible instruments.
Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance,
if later) and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the
if-converted method, outstanding convertible instruments are assumed to be converted into common stock at the beginning of the period
(or at the time of issuance, if later).

 The
following is the calculation of income (loss) per share:

 Year ended
 2023

 Year ended
 2024

 $
)

 $

 Less: Net loss attributable to non-controlling interests

 6,090,270

 2,204,882

 Net (loss) income attributable to shareholders of CBAK Energy Technology, Inc.

)

 Weighted average shares outstanding -basic (note)

 89,252,085

 89,928,357

 Dilutive unvested shares unit

 -

 229,955

 Weighted average shares outstanding–- diluted

 89,252,085

 90,158,312

 (Loss) income per share

 - Basic

 $
 ( 0.03
)

 $
 0.13

 - Diluted

 $
 ( 0.03
)

 $
 0.13

 Note:
 Including 5,384 vested restricted shares granted pursuant to the 2015 Plan that were not yet issued

 For
the year ended December 31, 2023, 20,000 unvested restricted shares units, 3,224,128 unvested options and all the outstanding warrants
were anti-dilutive and excluded from shares used in the diluted computation.

 For
the year ended December 31, 2024, unvested options were anti-dilutive and excluded from shares used in the diluted computation.

 27.

 On
December 8, 2020, the Company entered in a securities purchase agreement with certain institutional investors, pursuant to which the
Company issued in a registered direct offering, an aggregate of 9,489,800 shares of its common stock at a price of $ 5.18 per share, for
aggregate gross proceeds to the Company of approximately $ 49 million, before deducting fees to the placement agent and other estimated
offering expenses payable by the Company. As part of the transaction, the institutional investors also received warrants ("Investor
Warrants") for the purchase of up to 3,795,920 shares of the Company's common stock at an exercise price of $ 6.46 per share
exercisable for 36 months from the date of issuance. The options were expired as of the report date. In addition, the placement agent
for this transaction also received warrants ("Placement Agent Warrants") for the purchase of up to 379,592 shares of the
Company's common stock at an exercise price of $ 6.475 per share exercisable for 36 months after 6 months from the issuance. The
Company has performed a thorough reassessment of the terms of its warrants with reference to the provisions of ASC Topic 815-40-15-7I,
regarding its exposure to changes in currency exchange rates. This reassessment has led to the management's conclusion that the
Company's warrants issued to the investors should not be considered indexed to the Company's own stock because the warrants
are denominated in U.S. dollar, which is different from the Company's functional currency, Renminbi. Warrants are remeasured at
fair value with changes in fair value recorded in earnings in each reporting period.

 F- 54

 On
February 8, 2021, the Company entered into another securities purchase agreement with the same investors, pursuant to which the Company
issued in a registered direct offering, an aggregate of 8,939,976 shares of common stock of the Company at a per share purchase price
of $ 7.83. In addition, the Company issued to the investors (i) in a concurrent private placement, the Series A-1 warrants to purchase
a total of 4,469,988 shares of common stock, at a per share exercise price of $ 7.67 and exercisable for 42 months from the date of issuance;
(ii) in the registered direct offering, the Series B warrants to purchase a total of 4,469,988 shares of common stock, at a per share
exercise price of $ 7.83 and exercisable for 90 days from the date of issuance; and (iii) in the registered direct offering, the Series
A-2 warrants to purchase up to 2,234,992 shares of common stock, at a per share exercise price of $ 7.67 and exercisable for 45 months
from the date of issuance. The Company received gross proceeds of approximately $ 70 million from the registered direct offering and the
concurrent private placement, before deducting fees to the placement agent and other estimated offering expenses of $ 5.0 million payable
by the Company. In addition, the placement agent for this transaction also received warrants ("Placement Agent Warrants")
for the purchase of up to 446,999 shares of the Company's common stock at an exercise price of $ 9.204 per share exercisable for
36 months after 6 months from the issuance.

 On
May 10, 2021, the Company entered into that Amendment No. 1 to the Series B Warrant (the "Series B Warrant Amendment") with
each of the holders of the Company's outstanding Series B warrants. Pursuant to the Series B Warrant Amendment, the term of the
Series B warrants was extended from May 11, 2021 to August 31, 2021.

 As of the
date of this report, Series B warrant, along with Series A-2 warrants, had both expired. All of the above warrants were expired as of
December 31, 2024.

 The
fair value of the outstanding warrants was calculated using Binomial Model based on backward induction with the following assumptions:

issued in the 2020 Financing

 holder

 Investor

 Placement

 Agent

 Appraisal
 Date

 2023

 2023

 Market price per share (USD/share)

 $

 n/a

 $

 1.05

 Exercise price (USD/price)

 n/a

 6.475

 Risk free rate

 n/a

 5.3

 %

 Dividend yield

 n/a

 %

 Expected term/ Contractual life (years)

 n/a

 0.4 year

 Expected volatility

 n/a

 53.90

 %

 F- 55

issued in the 2021 Financing

 holder

 Investor

 Placement

 Agent

 Appraisal
 Date

 2023

 2023

 Market price per share (USD/share)

 1.05

 1.05

 Exercise price (USD/price)

 7.67

 9.204

 Risk free rate

 5.1

 %

 5.1

 %

 Dividend yield

 %

 %

 Expected term/ Contractual life (years)

 0.6 year

 0.6 year

 Expected volatility

 63.00

 %

 63.00

 %

 The
following is a reconciliation of the beginning and ending balances of warrants liability measured at fair value on a recurring basis
using Level 3 inputs:

 Year
 ended

 2023

 Year
 ended

 2024

 Balance at the beginning of the
 year

 $

 136,000

 $

 -

 Warrants issued to institution investors

 -

 -

 Warrants issued to placement agent

 -

 -

 Warrants redeemed

 -

 -

 Fair value change of the issued warrants included in
 earnings

 ( 136,000

)

 -

 Balance at end of year

 -

 -

 The
following is a summary of the warrant activity:

 Number of

 Average
 Exercise
 Price

 Weighted
 Average
 Remaining
 Contractual Term in
 Years

 Outstanding at January 1, 2024

 5,296,579

 $
 7.71

 0.60

 Exercisable at January 1, 2024

 5,296,579

 $
 7.71

 0.60

 Granted

 -

 -

 -

 Exercised / surrendered

 -

 -

 -

 Expired

 ( 5,296,579
)

 7.71

 -

 Outstanding at December 31, 2024

 -

 -

 -

 Exercisable at December 31, 2024

 -

 -

 -

 F- 56

 28.
 Commitments
 and Contingencies

 (i)

 Capital Commitments

 As
of December 31, 2023 and 2024, the Company had the following contracted capital commitments:

 2023

 2024

 For construction of buildings

 $

 1,104,571

 $

 1,677,191

 For purchases of equipment

 31,437,525

 53,300,030

 Capital injection

 267,557,243

 254,204,390

 $

 300,099,339

 $

 309,181,611

 (ii)

 Litigation

its normal course of business, the Company may become involved in various lawsuits and legal proceedings. However, litigation is subject
to inherent uncertainties, and an adverse result may arise from time to time will affect its operation. Other than the legal proceedings
set forth below, the Company is currently not aware of any such legal proceedings or claims that the Company believe will have an adverse
effect on the Company's operation, financial condition or operating results.

 In
December 2020, CBAK Power received notice from Court of Dalian Economic and Technology Development Zone that Haoneng filed another lawsuit
against CBAK Power for failure to pay pursuant to the terms of the purchase contract. Haoneng sought a total amount of $ 1.5 million (RMB 10,257,030),
including equipment cost of $ 1.3 million (RMB 9,072,000) and interest amount of $ 0.2 million (RMB 1,185,030). In August 2021, CBAK Power
and Haoneng reached an agreement that the term of the purchase contract will be extended to December 31, 2023 under which CBAK Power
and its related parties shall execute the purchase of equipment in an amount not lower than $ 2.4 million (RMB 15,120,000) from Haoneng,
or CBAK Power has to pay 15 % of the amount equal to RMB 15,120,000 ($ 2.2 million) net of the purchased amount to Haoneng. Haoneng withdrew
the filed lawsuit after the agreement. As of December 31, 2024, the equipment was not received by CBAK Power, CBAK Power has included
the equipment cost of $ 2.2 million (RMB 15,120,000) under capital commitments.

 F- 57

 29.
 Concentrations
 and Credit Risk

 (a)

 Concentrations

 The
Company had the following customers that individually comprised 10% or more of net revenue for the years ended December 31, 2023 and
2024 as follows:

 Year
 ended

 Year
 ended

 Sales of finished goods and
 raw materials

 31, 2023

 Customer A

 $
 *

 *

 27,752,479

 15.7
 %

 Customer B

 66,881,853

 32.7
 %

 57,563,897

 32.6
 %

 Zhengzhou BAK Battery Co., Ltd (note 18)

 27,872,002

 13.6
 %

 18,661,537

 10.6
 %

 *
 Comprised less than 10% of net revenue for the respective period.

 The
Company had the following customers that individually comprised 10% or more of net trade receivable (included VAT) as of December 31,
2023 and 2024 as follows:

 31, 2023

 Customer A

 $
 7,239,247

 27.7
 %

 $
 10,676,044

 41.5
 %

 Zhengzhou BAK Battery Co., Ltd (note 18)

 12,441,715

 47.5
 %

 5,970,184

 23.2
 %

 *

 Comprised less than 10%
 of net accounts receivable for the respective period.

 The
Company had the following suppliers that individually comprised 10% or more of net purchase for the years ended December 31, 2023 and
2024 as follows:

 Year
 ended

 2023

 Year
 ended

 2024

 Supplier A

 $

 18,786,335

 13.7

 %

 $

 10,171,281

 10.1

 %

 Supplier B

 *

 *

 11,864,125

 11.7

 %

 *
 Comprised less than 10% of net purchase for the respective period.

 The
Company had the following suppliers that individually comprised 10% or more of trade payable as of December 31, 2023 and 2024 as follows:

 2023

 Supplier
 A

 $
 2,689,740

 10.2
 %

 $
 *

 *

 Supplier
 B

 *

 *

 3,263,562

 12.4
 %

 Zhejiang
 Shengyang Renewable Resources Technology Co., Ltd.

 3,498,324

 13.3
 %

 *

 *

 F- 58

 (b)

 Credit Risk

 Financial
instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash and cash equivalents
and pledged deposits. As of December 31, 2023 and 2024 substantially all of the Company's cash and cash equivalents were held by
major financial institutions and online payment platforms located in the PRC, which management believes are of high credit quality. The
Company has not experienced any losses on cash and cash equivalents to date. The Company does not require collateral or other securities
to support financial instruments that are subject to credit risk.

 For
the credit risk related to trade accounts receivable, the Company performs ongoing credit evaluations of its customers and, if necessary,
maintains reserves for potential credit losses.

 30.
 Segment
 Information

 The
Company's chief operating decision maker has been identified as the Chief Executive Officer ("CEO") who reviews financial
information of operating segments based on US GAAP amounts when making decisions about allocating resources and assessing performance
of the Company.

 The
Company determined that for the year ended December 31, 2023 and 2024, it operated in two operating segments namely CBAK
and Hitrans. CBAK's segment mainly includes the manufacture, commercialization and distribution of a wide variety of standard and
customized lithium-ion rechargeable batteries for use in a wide array of applications. Hitrans' segment mainly includes the development
and manufacturing of NCM precursor and cathode materials.

 The
Company primarily operates in the PRC and substantially all of the Company's long-lived assets are located in the PRC.

 The
Company's chief operating decision maker evaluates performance based on each reporting segment's net revenue, cost of revenues,
operating expenses, operating income (loss), finance income (expense), other income and net income. Net revenue, cost of revenues,
operating expenses, operating income, finance income (expense), other income (expenses) and net income (loss) by segment for the years
ended December 31, 2023 and 2024 were as follows:

 For
 the year ended December 31, 2023

 CBAT

 Hitrans

 Corporate

 unallocated
 (note)

 Net revenues

 $
 132,993,518

 $
 71,444,847

 $
 -

 $

 Cost of revenues

 ( 101,413,350
)

 ( 71,300,692
)

 -

 ( 172,714,042
)

 Gross profit

 31,580,168

 144,155

 -

 31,724,323

 Total operating expenses

 ( 20,861,844
)

 ( 17,159,677
)

 ( 954,614
)

 ( 38,976,135
)

 Operating income (loss)

 10,718,324

 ( 17,015,522
)

 ( 954,614
)

 ( 7,251,812
)

 Finance income (expenses), net

 337,243

 95,816

 ( 159
)

 432,900

 Other income (expenses), net

 2,906,648

 ( 2,276,918
)

 136,000

 765,730

 Income tax expenses

 -

 ( 2,486,145
)

 -

 ( 2,486,145
)

 Net income (loss)

 13,962,215

 ( 21,682,769
)

 ( 818,773
)

)

 For
 the year ended December 31, 2024

 CBAT

 Hitrans

 Corporate

 unallocated
 (note)

 Net revenues

 $
 136,588,803

 $
 40,025,806

 $
 -

 $

 Cost of revenues

 ( 93,535,812
)

 ( 41,303,552
)

 -

 ( 134,839,364
)

 Gross profit (loss)

 43,052,991

 ( 1,277,746
)

 -

 41,775,245

 Total operating expenses

 ( 22,848,626
)

 ( 8,539,324
)

 ( 1,599,146
)

 ( 32,987,096
)

 Operating income (loss)

 20,204,365

 ( 9,817,070
)

 ( 1,599,146
)

 8,788,149

 Finance income (expenses), net

 1,275,246

 7,954

 ( 110
)

 1,283,090

 Other income (expenses), net

 ( 490,229
)

 1,562,753

 -

 1,072,524

 Income tax expenses

 ( 1,558,613
)

 -

 -

 ( 1,558,613
)

 Net income (loss)

 19,430,769

 ( 8,246,363
)

 ( 1,599,256
)

 As of December 31, 2024

 Identifiable long-lived assets

 98,429,723

 44,280,749

 -

 142,710,472

 Total assets

 211,880,435

 90,295,480

 42,229

 302,218,144

 Note:
The Company does not allocate its assets located and expenses incurred outside China to its reportable segments because these assets
and activities are managed at a corporate level.

 F- 59

 Net
revenues by product:

 The
Company's products can be categorized into high power lithium batteries and materials used in manufacturing of lithium batteries.
For the product sales of high power lithium batteries, the Company manufactured high-power cylindrical lithium battery cell and battery
packs. The Company's battery products are sold to end users in electric vehicles, light electric vehicles and energy storage sectors.
For the product sales of materials used in manufacturing of lithium batteries, the Company, via its subsidiary, Hitrans, manufactured
cathode materials and Precursor for use in manufacturing of cathode. Revenue from these products is as follows:

 Year
 ended
 2023

 Year
 ended
 2024

 High power lithium batteries used in:

 Electric vehicles

 $
 2,883,385

 $
 1,681,651

 Light electric vehicles

 5,607,435

 10,319,176

 Residential energy supply & uninterruptable
 supplies

 124,502,698

 124,587,976

 132,993,518

 136,588,803

 Materials used in manufacturing of lithium
 batteries

 Cathode

 39,845,626

 34,228,998

 Precursor

 31,599,221

 5,796,808

 71,444,847

 40,025,806

 Total consolidated revenue

 $

 $

 Net
revenues by geographic area:

 The
Company's operations are located in the PRC. The following table provides an analysis of the Company's sales by geographical
markets based on locations of customers:

 Year
 ended
 2023

 Year
 ended
 2024

 Mainland China

 $
 119,307,085

 $
 98,925,752

 Europe

 78,575,290

 65,746,989

 Others

 6,555,990

 11,941,868

 Total

 $

 $

 Substantially
all of the Company's long-lived assets are located in the PRC.

 31.
 CBAK
 Energy Technology, Inc. (Parent Company)

 Under
PRC regulations, subsidiaries in PRC ("the PRC subsidiaries") may pay dividends only out of their accumulated profits, if
any, determined in accordance with PRC GAAP. In addition, the PRC subsidiaries are required to set aside at least 10 % of their after
tax net profits each year, if any, to fund the statutory general reserve until the balance of the reserves reaches 50 % of their registered
capital. The statutory general reserves are not distributable in the form of cash dividends to the Company and can be used to make up
cumulative prior year losses, if any, and may be converted into share capital by the issue of new shares to shareholders in proportion
to their existing shareholdings, or by increasing the par value of the shares currently held by them, provided that the reserve balance
after such issue is not less than 25 % of the registered capital. As of December 31, 2023 and 2024, additional transfers of $ 219,322,375
and $ 215,827,099 were required before the statutory general reserve reached 50 % of the registered capital of the PRC subsidiaries. As
of December 31, 2023 and 2024 there was $ 1,230,511 appropriation from retained earnings and set aside for statutory general reserves
by the PRC subsidiaries.

 Schedule
I of Article 504 of Regulation SX requires the condensed financial information of the registrant (Parent Company) to be filed when the
restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed
fiscal year. For purposes of this test, restricted net assets of consolidated subsidiaries shall mean that amount of the registrant's
proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent
fiscal year may not be transferred to the parent company by subsidiaries in the form of loans, advances or cash dividends without the
consent of a third party (i.e., lender, regulatory agency, foreign government, etc.).

 F- 60

 SCHEDULE
I – CONDENSED FINANCIAL INFORMATION OF REGISTRANT

 CBAK

 PARENT
COMPANY STATEMENTS OF OPERATIONS

 For

 (Unaudited)

 Year
 ended
 2023

 Year
 ended
 2024

 REVENUE, net

 $
 -

 $
 -

 OPERATING EXPENSES:

 Salaries and
 consulting expenses

 1,386,099

 522,236

 General
 and administrative

 794,262

 1,076,909

 Total
 operating expenses

 ( 2,180,361
)

 ( 1,599,145
)

 LOSS FROM OPERATIONS

 ( 2,180,361
)

 ( 1,599,145
)

 Changes in fair value
 of warrants liability

 136,000

 -

 LOSS ATTRIBUTABLE TO PARENT COMPANY

 ( 2,044,361
)

 ( 1,599,145
)

 EQUITY IN (LOSS) INCOME
 OF SUBSIDIARIES

 ( 404,696
)

 13,389,177

 NET (LOSS) INCOME ATTRIBUTABLE
 TO SHAREHOLDERS

 $
)

 $

 F- 61

 CBAK

 PARENT
COMPANY BALANCE SHEETS

 As
of December 31, 2023 and 2024

 (Unaudited)

 2023

 2024

 ASSETS

 Interests in subsidiaries

 $
 114,257,553

 $
 123,176,663

 Cash and cash equivalents

 26,922

 30,956

 Total

 $
 114,284,475

 $
 123,207,619

 LIABILITIES AND SHAREHOLDERS' EQUITY

 CURRENT LIABILITIES:

 Accrued expenses and other
 payables

 1,586,745

 1,534,576

 Total
 current liabilities

 1,586,745

 1,534,576

 SHAREHOLDERS'
 EQUITY

 112,697,730

 121,673,043

 Total
 liabilities and shareholders' equity

 $
 114,284,475

 $
 123,207,619

 F- 62

 CBAK

 PARENT
COMPANY STATEMENTS OF CASH FLOWS

 For

 (Unaudited)

 Year
 ended
 2023

 Year
 ended
 2024

 CASH FLOWS FROM OPERATING ACTIVITIES:

 $
)

 $

 Adjustments to reconcile
 net loss to net cash used in operating activities:

 Equity in loss (income)
 of subsidiaries

 404,696

 ( 13,389,177
)

 Share based compensation

 1,225,747

 376,648

 Changes in fair value
 of warrants liability

 ( 136,000
)

 -

 Change in operating assets
 and liabilities

 Accrued
 expenses and other payable

 ( 21,357
)

 ( 52,169
)

 Net
 cash used in operating activities

 ( 975,971
)

 ( 1,274,666
)

 CASH FLOWS FROM INVESTING ACTIVITIES:

 Increase
 in interest in subsidiaries

 884,334

 1,278,700

 Net
 cash used in investing activities

 884,334

 1,278,700

 CHANGE IN CASH AND CASH EQUIVALENTS

 ( 91,637
)

 4,034

 CASH AND CASH EQUIVALENTS,
 beginning of year

 118,559

 26,922

 CASH AND CASH EQUIVALENTS,
 end of year

 $
 26,922

 $
 30,956

 The
condensed parent company financial statements have been prepared using the equity method to account for its subsidiaries. Refer to the
consolidated financial statements and notes presented above for additional information and disclosures with respect to these financial
statements.

 F- 63

 32.
 Subsequent
 events

 The
Company has evaluated subsequent events through the date of the issuance of the consolidated financial statements and the following subsequent
event has been identified.

 The
Company repaid RMB 64 million (approximately $ 8.8 million) borrowed from Shaoxing Branch of Bank of Communications Co., Ltd bearing interest
rate of 3.65 % per annum as of the date of this report and borrowed RMB 58 million (approximately $ 8 million) for one year from the same
facility, bearing interest rate of 3.45 % and expiring through January to February 2026.

 On January 17, 2025, the Company entered into
a long-term Maximum Pledge Agreement with Zhejiang Shangyu Rural Commercial Bank, for the period from January 17, 2025 to September 25,
2027, with a maximum facility amount of RMB 76.56 million (approximately $ 10.49 million). The facility was secured by the land use right
and buildings of the Company. The Company has borrowed RMB 40 million (approximately $ 5.5 million) as of the date of this report bearing
interest rate at 2.85 %- 3.6 % and repayable on September 25, 2027.

 On January 20, 2025, NJ CBAK entered into an unsecured
revolving loan agreement with Bank of Ningbo Co., Ltd. Gaochun Branch bearing interest at 2.8 % per annum (LPR interest rate -30 bp),
with a one -year loan period ending on January 20, 2026. Up to the date of this report, NJ CBAK has borrowed RMB 7.1 million (approximately
$ 1 million) under this loan agreement.

 On
February 19, 2025, NJ CBAK obtained a RMB 30 million facility (approximately $ 4.1 million) from Jiangsu Gaochun Rural Commercial Bank,
with the term from February 19, 2025 to September 23, 2027. The facility was guaranteed by 100 % equity in CBAK Nanjing held by BAK Investment.
NJ CBAK borrowed RMB 4 million (approximately $ 0.6 million) on February 20, 2025 for a term until February 19, 2026, bearing interest
rate at 2.98 %.

 F- 64

 ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

 None.

 ITEM
9A. CONTROLS AND PROCEDURES.

 Evaluation
of Disclosure Controls and Procedures

 As
required by Rule 13a-15 under the Exchange Act, our management has carried out an evaluation, with the participation and under the supervision
of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls
and procedures as of December 31, 2024. Disclosure controls and procedures refer to controls and other procedures designed to ensure
that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated
to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding
required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and
procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives,
and management is required to apply its judgment in evaluating and implementing possible controls and procedures.

 Management
conducted its evaluation of disclosure controls and procedures under the supervision of our Chief Executive Officer and our Chief Financial
Officer. Based upon, and as of the date of this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures were ineffective as of December 31, 2024.

 Management's
Annual Report on Internal Control over Financial Reporting

 Management
is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control
over financial reporting refers to the process designed by, or under the supervision of, our Chief Executive Officer and our Chief Financial
Officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability
of our financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP, and includes
those policies and procedures that:

 pertain to the maintenance
 of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

 provide reasonable assurance
 that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that
 our receipts and expenditures are being made only in accordance with the authorization of our management and directors; and

 provide reasonable assurance
 regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material
 effect on the financial statements.

 Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.

 Management
assessed the effectiveness of our internal control over financial reporting as of December 31, 2024. In making this assessment, management
used the framework set forth in the report entitled Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission, or COSO. The COSO framework summarizes each of the components of a company's internal
control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication,
and (v) monitoring.

 Based
on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that the Company's internal control over
financial reporting as of December 31, 2024 were not effective because of the following material weaknesses in our internal control over
financial reporting has been identified:

 –

 We did not have appropriate
 policies and procedures in place to evaluate the proper accounting and disclosures of key documents and agreements.

 –

 We do not have sufficient
 and skilled accounting personnel with an appropriate level of technical accounting knowledge and experience in the application of
 accounting principles generally accepted in the United States commensurate with our financial reporting requirements.

 In order
to cure the foregoing material weaknesses, we have taken or are taking the following remediation measures:

 –

 We were in the process
 of hiring a permanent chief financial officer with significant U.S. GAAP and SEC reporting experience. Ms. Xiangyu Pei was appointed
 by the Board of Directors of the Company as the Interim Chief Financial Officer on August 23, 2019. Ms. Xiangyu Pei resigned as our
 Interim Chief Financial Officer on August 22, 2023 but has continued to serve in the Company's finance department and on the
 board of director. Mr. Jiewei Li was appointed as the Company's Chief Financial Officer on August 22, 2023.

 –

 We have regularly offered
 our financial personnel trainings on internal control and risk management. We have regularly provided trainings to our financial
 personnel on U.S. GAAP accounting guidelines. We plan to continue to provide trainings to our financial team and our other relevant
 personnel on the U.S. GAAP accounting guidelines applicable to our financial reporting requirements.

 We
intend to complete the remediation of the material weaknesses discussed above as soon as practicable but we can give no assurance that
we will be able to do so. Designing and implementing an effective disclosure controls and procedures is a continuous effort that requires
us to anticipate and react to changes in our business and the economic and regulatory environments and to devote significant resources
to maintain a financial reporting system that adequately satisfies our reporting obligations. The remedial measures that we have taken
and intend to take may not fully address the material weaknesses that we have identified.

 Changes
in internal control over financial reporting

 Except
for the matters described above, there were no changes in our internal controls over financial reporting during the fourth quarter of
our fiscal year ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

 Report
of Independent Registered Public Accounting Firm

 ARK
Pro CPA & Co, our independent registered public accounting firm has issued an attestation report regarding the effectiveness of our
internal controls over financial reporting which is included under Item 8 above.

 ITEM
9B. OTHER INFORMATION.

 We
have no information to disclose that was required to be disclosed in a report on Form 8-K during the fourth quarter of fiscal year 2024,
but was not reported.

the fiscal quarter ended December 31, 2024, none of the Company's directors or executive officers adopted or terminated any contract,
instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions
of Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement.

 ITEM
9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

 Not applicable.

 PART
III

 ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

 The
information concerning our directors, executive officers, compliance with Section 16(a) of the Exchange Act, and corporate governance
required by this Item 10 of Form 10-K is incorporated by reference from the information contained in the Definitive Proxy Statement for
the Annual Meeting of Stockholders, which is expected to be filed within 120 days after our fiscal year ended December 31, 2024.

 ITEM
11. EXECUTIVE COMPENSATION.

 The
information required by Item 11 of Form 10-K is incorporated herein by reference from the information contained in the Definitive Proxy
Statement for the Annual Meeting of Stockholders, which is expected to be filed within 120 days after our fiscal year ended December
31, 2024.

 ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

 The
information required by Item 12 of Form 10-K is incorporated herein by reference from the information contained in the Definitive Proxy
Statement for the Annual Meeting of Stockholders, which is expected to be filed within 120 days after our fiscal year ended December
31, 2024.

 ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

 The
information required by Item 13 of Form 10-K is incorporated herein by reference from the information contained in the Definitive Proxy
Statement for the Annual Meeting of Stockholders, which is expected to be filed within 120 days after our fiscal year ended December
31, 2024.

 ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

 The
information required by Item 14 of Form 10-K is incorporated herein by reference from the information contained in the Definitive Proxy
Statement for the Annual Meeting of Stockholders, which is expected to be filed within 120 days after our fiscal year ended December
31, 2024.

 PART
IV

 ITEM
15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

 (a)

 List of Documents Filed
 as a Part of This Report:

 (1)

 Consolidated Financial
 Statements:

 The financial
statements are set forth under Item 8 of this annual report on Form 10-K.

 (2)

 Financial Statement Schedules:

 Financial
statement schedules have been omitted since they are either not required, not applicable, or the information is otherwise included in
the consolidated financial statements or notes thereto.

 (3)

 Index to Exhibits

 See exhibits
listed under Item 15(b) below.

 (b)

 Exhibits:

 Exhibit
 No.

 Description

 2.1

 Articles
 of Merger (incorporated by reference to Exhibit 2.1 to the registrant's Current Report on Form 8- K filed on January 17, 2017)

 3.1

 Articles
 of Incorporation of the registrant (incorporated by reference to Exhibit 3.1 to the registrant's Annual Report on Form 10-K
 filed on December 8, 2006)

 3.2

 By-laws
 of the registrant (incorporated by reference to Exhibit 3.2 to the registrant's Annual Report on Form 10-K filed on December
 19, 2007)

 3.3

 Certificate
 of Change Pursuant to NRS 78.209 filed by the Company on October 22, 2012 (incorporated by reference to Exhibit 3.1 to the registrant's
 Current Report on Form 8-K filed on October 26, 2012)

 3.4

 Certificate
 of Amendment to Articles of Incorporation filed by the Company on June 23, 2015 (incorporated by reference to Exhibit 3.1 to the
 registrant's Current Report on Form 8-K filed on June 26, 2015)

 3.5

 Certificate
 of Amendment to Articles of Incorporation filed by the Company on December 9, 2021 (incorporated by reference to Exhibit 3.1 to the
 registrant's Current Report on Form 8-K filed on December 13, 2021)Form of Restricted Stock Award Agreement (incorporated by
 reference to Exhibit 99.1 to the registrant's

 4.1

 Description
 of Securities Registered Pursuant to Section 12 of the Exchange Act

 10.1

 Form
 of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the registrant's Current Report
 on Form8-K filed on January 3, 2011)

 10.2

 CBAK
 Energy Technology, Inc. 2015 Equity Incentive Plan (incorporated by reference to Appendix D to the registrant's Definitive
 Proxy Statement on Schedule 14A filed April 24, 2015).

 10.3

 Form
 of Restricted Share Units Award Agreement Under 2015 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the registrant's
 Current Report on Form 8-K filed on August 29, 2019)

 10.4

 Form
 of Restricted Stock Award Agreement (incorporated by reference to Exhibit 99.1 to the registrant's Current Report on Form 8-K
 filed on July 6, 2015)

 10.5

 English
 translation of Framework Agreement Relating to Dalian CBAK Power Battery Co., Ltd.'s Investment in Zhejiang Meidu Hitrans Lithium
 Battery Technology Co., Ltd., dated July 20, 2021 (incorporated by reference to Exhibit 10.1 to the registrant's Current Report
 on Form 8-K filed on July 26, 2021)

 10.6

 CBAK
 Energy Technology, Inc. 2023 Equity Incentive Plan (incorporated by reference to Appendix A to the registrant's Definitive
 Proxy Statement on Schedule 14A filed on October 20, 2023)

 10.7

 Form
 of Restricted Share Award Agreement under the 2023 Equity Incentive Plan (incorporated by reference to Exhibit 10.10 to the registrant's
 Annual Report on Form 10-K filed on March 15, 2024)

 10.8

 Form
 of Restricted Stock Unit Award Agreement under the 2023 Equity Incentive Plan (incorporated by reference to Exhibit 10.11 to the
 registrant's Annual Report on Form 10-K filed on March 15, 2024)

 10.9

 Form
 of Share Option Agreement under the 2023 Equity Incentive Plan (incorporated by reference to Exhibit 10.12 to the registrant's
 Annual Report on Form 10-K filed on March 15, 2024)

 14.1

 Code
 of Business Conduct and Ethics of the registrant (incorporated by reference to Exhibit 14.1 to the registrant's Quarterly Report
 on Form 10-Q filed on August 22, 2006)

 Insider
 Trading Policy of the registrant

 21.1

 List
 of subsidiaries of the registrant.

 23.1

 Consent of ARK Pro CPA & Co

 31.1

 Certifications
 of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 31.2

 Certifications
 of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 32.1

 Certifications
 of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 32.2

 Certifications
 of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 97.1

 Clawback
 Policy (incorporated by reference to Exhibit 97.1 to the registrant's Annual Report on Form 10-K filed on March 15, 2024)

 101.INS

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 Cover

 (c) Financial
Statement Schedule

 See Item
15(a) above.

 ITEM
16. FORM 10-K SUMMARY

 None.

 SIGNATURES

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

 Date: March
17, 2025

 CBAK ENERGY TECHNOLOGY, INC.

 By:

 /s/
 Zhiguang Hu

 Zhiguang Hu

 Chief Executive Officer

 In
accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.

 Signature

 Title

 Date

 /s/ Zhiguang
 Hu

 Chief Executive Officer

 Zhiguang Hu

 (Principal Executive Officer)

 /s/ Jiewei
 Li

 Chief Financial Officer

 Jiewei Li

 (Principal Financial and Accounting Officer)

 /s/ Yunfei
 Li

 Chairman of the Board of Directors

 Yunfei Li

 /s/ J. Simon Xue

 Director

 J. Simon Xue

 /s/ Martha
 C. Agee

 Director

 Martha C. Agee

 /s/ Jianjun
 He

 Director

 Jianjun He

 /s/ Xiangyu
 Pei

 Director

 Xiangyu Pei

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