The proposed Hong Kong-based entity, tentatively named Huahu International New Energy Technology, requires a $3.5 million initial investment. Highway Holdings will contribute $2 million in cash for a 57% stake, while Huahu provides $1.5 million in technology and product assets for the remaining 43%. The venture grants exclusive rights for SKD manufacturing and distribution in Germany, Italy, the U.S., and parts of South America.

For Highway Holdings, the move addresses persistent underutilization at its manufacturing sites, specifically its facility in Myanmar. The agreement includes a multi-year incentive program where Highway Holdings may issue up to 1 million restricted shares to Huahu, contingent upon hitting specific performance milestones and component business volumes. Roland Kohl, CEO of Highway Holdings, described the partnership as a calculated pivot to reduce reliance on cyclical OEM demand by capturing a share of the global battery storage market, which is projected to reach $198 billion within five years.

While the companies aim to finalize definitive agreements within a month, the transaction remains subject to due diligence, regulatory approvals, and standard closing conditions. Both parties intend to collaborate on research, development, and production efficiency, leveraging Highway Holdings’ established European commercial relationships to scale Huahu’s current international reach.