U Power Limited (NASDAQ: UCAR) entered into a Letter of Intent with FTT Holding Company LLC on December 16 2025 to create a joint venture that will receive up to $50 million from FTT Holding and a private placement of up to $10 million in U Power’s Class A ordinary shares. The combined $60 million is earmarked for the deployment of UOTTA™ battery‑swapping stations and related infrastructure across Southern Europe, positioning U Power to scale its AI‑integrated platform in a high‑growth market.
The financing comes at a time when U Power’s operating margin was –124.09% at the end of 2024, and the company was burning cash at roughly $1.3 million per month. Free‑cash‑flow analysis indicates a runway of only three to four months without additional capital. The new capital infusion is therefore critical to sustaining operations and funding the planned expansion, but it does not eliminate the company’s ongoing losses or liquidity constraints.
Revenue growth has been a key driver of U Power’s recent financial performance. The company reported a 124% year‑over‑year increase in revenue to RMB44.29 million (US$6.16 million) in 2024, and a 34.4% rise in first‑half 2025 revenue to RMB17.7 million. These gains reflect stronger demand for the UOTTA™ platform in commercial fleets and data‑center deployments, but the company remains far from profitability as it continues to invest heavily in technology and network build‑out.
CEO Jonny Lee emphasized that the joint venture will “strengthen our partnership and enhance our combined capabilities.” He added that the capital will “support the execution of key shared programs and enable us to effectively expand our footprint in Europe.” The statement signals management’s confidence that the investment will accelerate deployment, but also acknowledges the need for disciplined execution to convert the capital into operational stations before cash reserves are depleted.
Strategically, the partnership positions U Power against larger battery‑swapping players such as NIO and Gogoro by leveraging FTT Holding’s technology‑investment focus and U Power’s AI‑driven platform. The joint venture also provides a vehicle for future revenue diversification in Southern Europe, where demand for commercial fleet electrification is growing. However, the company’s persistent losses and high burn rate mean that the $60 million raise is a stop‑gap measure; long‑term sustainability will depend on achieving scale and improving margins in the coming years.
In summary, the joint venture and $60 million financing represent a significant liquidity boost for U Power, but the company’s financial trajectory remains challenging. The deal underscores the importance of timely execution and cost discipline as U Power seeks to transform its technology into a profitable, scalable business.
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