ECARX Shifts to USD Reporting, Sheds VIE Amid China Regulatory Scrutiny

TL;DR

**ECARX is trying to clean up its act for Western investors by ditching its VIE and reporting in USD, but China's regulatory shadow still looms large.**

AI Summary

ECARX Holdings Inc. (ECX) filed its 20-F for the fiscal year ended December 31, 2025, indicating a strategic shift in its reporting currency from Chinese Renminbi to U.S. dollars to enhance investor clarity and peer comparability amidst international expansion. The company, a Cayman Islands holding company, conducts its primary operations through PRC subsidiaries. A significant business change involved the termination of its Variable Interest Entity (VIE) structure in 2022, specifically Hubei ECARX Technology Co., Ltd., due to increased regulatory scrutiny and the inconsequential nature of the businesses held by the VIE, such as surveying and mapping services and ICP businesses, to ECARX's overall operations. This restructuring aimed to mitigate risks associated with the complex and evolving PRC regulatory environment, particularly concerning foreign investment and overseas listings. The filing highlights ongoing risks related to PRC government oversight, including potential restrictions on its ability to conduct business, accept foreign investments, or maintain its U.S. listing, which could significantly impact the value of its Class A Ordinary Shares. The company also issued US$50 million in 2025 ATW Convertible Notes and US$100 million in 2025 Convertible Notes to institutional investors, with the latter refinancing US$65 million in convertible notes from October 2022.

Why It Matters

ECARX's strategic shift to USD reporting and the termination of its VIE structure are critical for investors, signaling a move towards greater transparency and reduced regulatory risk in China. This could improve comparability with international peers, potentially attracting a broader investor base. For employees and customers, a more stable and transparent corporate structure might foster greater confidence, though the inherent risks of operating primarily in China remain. The broader market will watch how ECARX navigates the evolving PRC regulatory landscape, as its success or failure could set a precedent for other China-based companies listed overseas, especially concerning data security and anti-monopoly regulations.

Risk Assessment

Risk Level: high — The risk level is high due to ECARX's primary operations being in China, subjecting it to 'complex and evolving PRC laws and regulations' and 'significant authority in regulating our operations.' The filing explicitly states that PRC regulatory actions 'could significantly limit or completely hinder our ability to offer or continue to offer securities to investors' and 'cause the value of such securities to significantly decline or become worthless.'

Analyst Insight

Investors should exercise extreme caution and thoroughly evaluate the geopolitical and regulatory risks associated with China-based companies. Monitor any further regulatory developments from the CSRC or CAC that could impact ECARX's ability to operate or maintain its U.S. listing, as these could severely devalue Class A Ordinary Shares.

Key Numbers

• $50M — 2025 ATW Convertible Notes (Aggregate principal amount issued to ATW Mobility SPV LLC)
• $100M — 2025 Convertible Notes (Aggregate principal amount issued to institutional investors, refinancing US$65 million from October 2022)
• 310,505,777 — Class A ordinary shares outstanding (As of December 31, 2025)
• 45,960,916 — Class B ordinary shares outstanding (As of December 31, 2025)
• $0.000005 — Par value per share (For both Class A and Class B ordinary shares)
• $11.50 — Warrant exercise price (For Public Warrants and Sponsor Warrants)

Key Players & Entities

• ECARX Holdings Inc. (company) — Registrant and holding company
• Hubei ECARX Technology Co., Ltd. (company) — Former Variable Interest Entity (VIE)
• Ziyu Shen (person) — Chief Executive Officer of ECARX Holdings Inc.
• ATW Mobility SPV LLC (company) — Investor in 2025 ATW Convertible Notes
• China Securities Regulatory Commission (regulator) — PRC government authority
• Cyberspace Administration of China (regulator) — PRC government authority
• Geely Auto (company) — Manages brands including Geely, Lynk & Co, Geometry, and Zeekr
• Geely Holding (company) — Zhejiang Geely Holding Group Co., Ltd.
• U.S. Bank Trust Company, National Association (company) — Trustee for 2025 ATW Convertible Notes
• Continental Stock Transfer & Trust Company (company) — Warrant agent

FAQ

Risk Factors

• PRC Government Oversight and Restrictions [high — regulatory]: The company faces significant risks from PRC government oversight, including potential restrictions on its ability to conduct business, accept foreign investments, or maintain its U.S. listing. This oversight could materially and adversely affect the value of its Class A Ordinary Shares.
• Termination of VIE Structure [medium — regulatory]: ECARX terminated its VIE structure in 2022 due to increased regulatory scrutiny and the inconsequential nature of the VIE's businesses (surveying and mapping, ICP) to its core operations. This restructuring was a proactive measure to mitigate risks associated with the evolving PRC regulatory environment concerning foreign investment and overseas listings.
• Convertible Notes Issuance and Refinancing [medium — financial]: The company issued US$50 million in 2025 ATW Convertible Notes and US$100 million in 2025 Convertible Notes. The latter refinanced US$65 million in convertible notes from October 2022, indicating ongoing capital raising activities and debt management.

Industry Context

ECARX Holdings Inc. operates in the automotive technology sector, focusing on intelligent automotive systems. The industry is characterized by rapid technological advancements, increasing demand for connected and autonomous driving features, and intense competition from established automotive suppliers and new tech entrants. Regulatory landscapes, particularly in China, significantly influence market access and operational strategies.

Regulatory Implications

The termination of the VIE structure addresses direct regulatory risks in China related to foreign investment and overseas listings. However, ongoing PRC government oversight remains a material risk, potentially impacting business operations, foreign investment acceptance, and the company's U.S. listing status.

What Investors Should Do

1. Monitor PRC regulatory developments closely.
2. Analyze the impact of convertible note issuances.
3. Evaluate the strategic rationale behind the VIE termination.

Key Dates

• 2022-12-31: Termination of VIE Structure — Mitigated regulatory risks associated with the PRC environment and complex VIE arrangements, impacting operational structure and risk profile.
• 2025-12-31: Fiscal Year End — Reporting period for the 20-F filing, reflecting the company's financial position and strategic changes, including currency reporting shift.

Glossary

Variable Interest Entity (VIE)

A structure used by Chinese companies to bypass foreign ownership restrictions in certain industries, allowing them to list overseas. It involves contractual arrangements rather than direct ownership. (ECARX terminated its VIE structure in 2022 due to regulatory scrutiny, simplifying its corporate structure and reducing associated risks.)

20-F

An annual report required by the U.S. Securities and Exchange Commission (SEC) for foreign private issuers. It contains comprehensive financial and business information. (This filing provides the latest financial and operational details for ECARX Holdings Inc., including strategic shifts and risk disclosures.)

Convertible Notes

Debt securities that can be converted into a predetermined amount of the issuer's equity at certain times during their life. (ECARX issued US$50 million and US$100 million in convertible notes, impacting its capital structure and potentially diluting existing shareholders upon conversion.)

Year-Over-Year Comparison

The 20-F filing indicates a significant strategic shift with the adoption of U.S. dollars as the reporting currency, aiming for better investor clarity and peer comparability. A key change from prior periods is the termination of the VIE structure in 2022, driven by regulatory scrutiny and the limited impact of VIE-held businesses. The company has also engaged in new debt financing, issuing US$50 million and US$100 million in convertible notes, with the latter refinancing existing debt, suggesting active capital management.

Key Financial Figures

• $0.000005 — red Class A ordinary shares, par value $0.000005 per share ECX The Nasdaq Stock Market L
• $50 million — in the aggregate principal amount of US$50 million as of the date of this annual report pu
• $150 million — p to an aggregate principal amount of US$150 million that will be convertible into Class A O
• $100 million — in the aggregate principal amount of US$100 million as of the date of this annual report pu
• $65 million — onnection with the refinancing of the US$65 million convertible notes issued by Company in
• $11.50 — dinary Shares at an exercise price of US$11.50 per share, which were issued upon the c

Filing Documents

• exc-20251231.htm (20-F) — 3849KB
• ecx-2x251231xex433.htm (EX-4.33) — 441KB
• ecx-20251231xexx81.htm (EX-8.1) — 19KB
• ecx-20251231xexx121.htm (EX-12.1) — 10KB
• ecx-20251231xexx122.htm (EX-12.2) — 10KB
• ecx-20251231xexx131.htm (EX-13.1) — 5KB
• ecx-20251231xexx132.htm (EX-13.2) — 5KB
• ecx-20251231xexx151.htm (EX-15.1) — 6KB
• ecx-20251231xexx152.htm (EX-15.2) — 9KB
• ecx-20251231xexx153.htm (EX-15.3) — 2KB
• exc-20251231_g1.jpg (GRAPHIC) — 209KB
• 0001628280-26-021865.txt ( ) — 20646KB
• exc-20251231.xsd (EX-101.SCH) — 130KB
• exc-20251231_cal.xml (EX-101.CAL) — 166KB
• exc-20251231_def.xml (EX-101.DEF) — 842KB
• exc-20251231_lab.xml (EX-101.LAB) — 1420KB
• exc-20251231_pre.xml (EX-101.PRE) — 1163KB
• exc-20251231_htm.xml (XML) — 3098KB

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 105 Item 12.

Description of Securities Other than Equity Securities

Description of Securities Other than Equity Securities 106 PART II 106 Item 13. Defaults, Dividend Arrearages and Delinquencies 106 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds 106 Item 15.

Controls and Procedures

Controls and Procedures 106 Item 16A. Audit Committee Financial Expert 107 Item 16B. Code of Ethics 107 Item 16C. Principal Accountant Fees and Services 108 Item 16D. Exemptions from the Listing Standards for Audit Committees 108 Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers 108 Item 16F. Change in Registrant's Certifying Accountant 108 Item 16G. Corporate Governance 108 Item 16H. Mine Safety Disclosure 109 Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 109 Item 16J. Insider Trading Policies 109 Item 16K. Cybersecurity 109 PART III 111 Item 17.

Financial Statements

Financial Statements 111 Item 18.

Financial Statements

Financial Statements 111 Item 19. Exhibits 111

SIGNATURES

SIGNATURES 115 i Table of Contents INTRODUCTION In this annual report, unless otherwise indicated or unless the context otherwise requires: "2025 ATW Convertible Notes" means the convertible notes issued by ECARX Holdings to ATW Mobility SPV LLC in the aggregate principal amount of US$50 million as of the date of this annual report pursuant to the 2025 ATW Convertible Note Purchase Agreement; "2025 ATW Convertible Note Purchase Agreement" means the securities purchase agreement dated October 30, 2025 between ECARX Holdings and ATW Mobility SPV LLC under which we agree to issue and sell pursuant to our Indenture, dated October 30, 2025 between us and U.S. Bank Trust Company, National Association, as trustee, and a First Supplemental Indenture entered into between us and the trustee, in one or more registered direct offerings by us directly to ATW Mobility SPV LLC, convertible notes for up to an aggregate principal amount of US$150 million that will be convertible into Class A Ordinary Shares; "2025 Convertible Notes" means the convertible notes issued by ECARX Holdings to certain institutional investors in the aggregate principal amount of US$100 million as of the date of this annual report pursuant to the 2025 Convertible Note Purchase Agreement; "2025 Convertible Note Purchase Agreement" means the convertible note purchase agreement dated November 3, 2025 between ECARX Holdings, a certain institutional investor and such other parties that may accede to such agreement from time to time, which was entered into in connection with the refinancing of the US$65 million convertible notes issued by Company in October 2022 and contemplates the issuance and sale by us of up to US$100 million of convertible notes; "ADAS" means advanced driver assistance system; "Business Combination" means the transactions contemplated by the Agreement and Plan of Merger, dated as of May 26, 2022 by and among COVA, ECARX Holdings, Ecarx Temp Limited, and Ecarx&Co Limited;

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS Not applicable.

OFFER STATISTICS AND EXPECTED TIMETABLE

Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE Not applicable.

KEY INFORMATION

Item 3. KEY INFORMATION Our Holding Company Structure and China Operations The following diagram illustrates our corporate structure as of the date of this annual report. ECARX Holdings is not an operating company but a Cayman Islands holding company. We conduct operations through our subsidiaries, with our operations in China currently being conducted by our PRC subsidiaries. Investors in the Class A Ordinary Shares or in ECARX Holdings are not acquiring equity interest in any operating company but instead are acquiring interest in a Cayman Islands holding company. This holding company structure involves unique risks to investors. As a holding company, ECARX Holdings may rely on dividends from its subsidiaries for cash requirements, including any payment of dividends to its shareholders. The ability of our subsidiaries to pay dividends or make distributions to ECARX Holdings may be restricted by laws and regulations applicable to them or the debt they incur on their own behalf or the instruments governing their debt. In addition, PRC regulatory authorities could disallow this holding company structure and limit or hinder our ability to conduct our business through, receive dividends or distributions from, or transfer funds to, the operating companies or list on a U.S. or other foreign exchange, which could cause the value of our securities to significantly decline or become worthless. Prior to 2022, we conducted our operations in China through our PRC subsidiaries and through Hubei ECARX Technology Co., Ltd., the former VIE, with which we, our subsidiary, and the nominee shareholders of the former VIE entered into certain contractual arrangement. PRC laws, regulations, and rules restrict and impose conditions on foreign investment in certain types of businesses, and we operated certain businesses, including businesses that were subject to such restrictions and conditions in China such as surveying and mapping services and ICP businesses, through the former 5

View Full Filing

View this 20-F filing on SEC EDGAR