The complaint, filed by Wolf Haldenstein Adler Freeman & Herz LLP, asserts that Microvast executives overstated the company's ability to meet margin targets and failed to disclose critical delays in commercial vehicle rollouts and the Huzhou Phase 3.2 expansion. Allegations suggest that inventory management issues and production setbacks were masked by misleading public statements throughout the designated class period.

Market volatility followed a series of disclosures that undermined investor confidence. A June 2025 report from Grizzly Research alleged significant fabrications regarding facility activity and partnership opportunities, triggering a 10.23% drop in stock price. Subsequent departures of key leadership, including CFO Charles Schultz, and revelations that the Huzhou expansion would miss its Q4 2025 deadline further eroded share value. By March 2026, the company reported a sharp decline in gross margins—falling to 1% from 36% the previous year—and quarterly revenue of $96.5 million, missing consensus estimates by nearly $40 million. Following these results, the stock price plummeted 34.2%.