OTC: AIEV

Our Company

Thunder Power is a technology
innovator and a prospective manufacturer of premium electric vehicles (“EVs”). The Company has developed several proprietary
technologies which are the building blocks of the Thunder Power family of EVs. Thunder Power’s wholly-owned subsidiary, Thunder
Power New Energy Vehicle Development Company Limited, a company established in accordance with the laws and regulations of the British
Virgin Islands on October 19, 2016 (“TP NEV”), has developed several proprietary technologies which are the building blocks
of the Thunder Power family of EVs. Thunder Power is a holding company with no operations that was incorporated under the laws and regulations
of the British Virgin Islands with limited liability on September 30, 2015.

You can find additional information
on our website at www.aiev.com. The information contained on, or that can be accessed through, our website is not part of, and is not
incorporated into, this Annual Report on Form 10-K.

Our Business Divisions

We envision to structure our
operations into three different divisions: vehicle development, strategic alliance and mergers and acquisitions, and trade and consulting,
each of which intends to address large and fragmented markets.

1

Vehicle Development

Thunder Power is strategically
focused on the development and production of electric vehicles (EVs) that combine timeless Italian design with an emphasis on delivering
a joyful and engaging driving experience at an accessible price point. The Company’s vehicle development efforts are structured
around three core series: Core Products, Niche Offerings, and Collaborative Projects.

Core Product

At the heart of Thunder Power’s
product portfolio is the Compact City Car, which is scheduled for launch in 2028. This model integrates Thunder Power’s proprietary
innovations, developed prior to its public listing, with state-of-the-art technical solutions. The vehicle’s design is led by renown
European designer, ensuring a blend of functionality and aesthetic appeal. We expect to outsource the initial production to facilities
in Italy, with an option for insourced production beginning in 2030.

Key features of our Compact
City Car include:

●Italian Craftsmanship: An affordable, compact sports car that reflects Italian design, quality, and driving
spirit.

●Driver-Focused Experience: Engineered for superior ride and handling, prioritizing driver engagement with
a human-centric design and minimal reliance on screens.

●Integrated Smart AI: Advanced AI software offering personalized features such as maps, driving modes,
and individual settings to enhance the driving experience.

We intend to focus on achieving
symmetry of parts to simplify both manufacturing and assembly processes, adhering to niche manufacturing principles. We also aim to minimize
the number of unique components by promoting design repeatability. The Compact City Car is planned to integrate a combination of internal
and external “off the shelf” parts alongside new development components, enhancing efficiency and reducing complexity in production.

The City Car is designed
to cater to a younger, urban demographic of first-time car buyers who value sustainability and view their car as an extension of their
identity and lifestyle. The initial launch will target Taiwan as a pilot market, with subsequent expansion planned in Asia
and Europe.

2

Niche Offerings

Thunder Power’s niche
vehicle development focuses on creating high-impact, emotionally compelling products that prioritize personalization and unique design.
These offerings are positioned as complementary vehicles for households, rather than primary functional cars.

Leveraging its existing chassis
and technologies, we are well-position to develop and launch the Sports Coupe, a high-performance luxury vehicle that combines European
styling with superior craftsmanship and driving dynamics. Drawing inspiration from other successful benchmarks, this model is designed
to deliver exceptional comfort and performance, with a targeted starting retail price of $100,000. Production will be outsourced to Italy.

We also expect to explore
opportunities in tailor-made retro vehicle development and restomod projects, leveraging its modular in-house chassis as a technological
base. These offerings are aimed at a younger generation of automotive enthusiasts who value vintage aesthetics but seek modern performance,
comfort, and eco-conscious functionality. In particular, we intend to explore the “electromods” trend, which involve converting
classic cars to electric powertrains. This approach provides a unique driving experience while reducing emissions, appealing to both sustainability-minded
and performance-driven customers.

Through these niche offerings,
we aim to establish ourselves as a key player in the luxury and specialty automotive markets, emphasizing the traditional values of driving
pleasure, craftsmanship, and grand touring.

Collaborative Projects

We are actively pursuing joint ventures and collaboration opportunities
to expand its footprint in emerging automotive segments. This includes leveraging its AIEV design framework to enhance third-party platforms
for exclusive markets.

One of the Company’s
primary areas of focus is the rapidly growing microcar segment, which offers a unique opportunity to bridge the gap between motorcycles
and traditional passenger vehicles. Microcars are particularly well-suited for urban environments and have experienced significant growth
in Europe, with strong potential for further expansion in Asia. According to McKinsey’s Future Mobility 2022 survey, the global
microcar market is projected to reach a total addressable value of $340 billion annually by 2030, driven by increased consumer demand
for sustainable and versatile urban mobility solutions.

The first Microcar project
is planned as a low-volume joint venture, leveraging the platform of an existing manufacturer, with production targeted to begin in 2027.
This model will incorporate Thunder Power’s signature Italian design elements. A fully unique Microcar is anticipated to launch
from 2030, subject to achieving market-relevant retail pricing, which is currently under evaluation.

Mergers and Acquisitions (M&A)

We are committed to pursuing
a proactive merger and acquisitions strategy, primarily targeting opportunities within the clean energy sector and related industries.
The focus will be on acquisitions that are immediately revenue-generating, reinforcing the Company’s financial position while creating
synergies with its core business.

On December 19, 2024, we
entered into a share exchange agreement with certain shareholders (the “TW Company Shareholders”) of Electric Power Technology
Limited, a Taiwan corporation (“TW Company”). On January 27, 2025, the Company and TW Shareholders have executed an amendment
to the Agreement and certain subsequent amendments (the “Amendments”, and together with the Agreement, the “Amended
Agreements”). Pursuant to the terms of the Amended Agreement, a portion of the TW Company Shareholders are expected to exchange
a total of 26,783,838 ordinary shares in TW Company for an aggregate of 31,832,768 shares of newly issued Common Stock of the Company
in weeks, with the remaining total of 1,715,000 shares of the TW Company to be transferred to the Company for 2,038,621 shares in a few
months. Upon completion of the transaction, the Company is expected to hold approximately 33.71% of TW Company’s total issued and
outstanding shares. The transaction has been reviewed and approved by the Taiwan government. This transaction is expected to strengthen
Thunder Power’s position in renewable energy while providing immediate revenue streams

3

Trade and Consulting

At the core of our strategy
is to generate revenue during the capital-intensive vehicle development phase. To achieve this, the Company plans to engage in complementary
activities that do not interfere with its core business operations but provide additional revenue streams and cash flow.

Vehicle Trading

As a precursor to building
a dealer network and cultivating sales contacts, we intend to engage in limited prestige vehicle trading. This initiative will focus on
trading new and nearly new vehicles in the European and Asian markets, leveraging the Company’s market expertise and industry relationships.

In addition to the opportunity
to bringing cash flow, we also expect these trading activities to enable us to establish valuable industry connections and insights, laying
the groundwork for a future dealer network and strengthening the Company’s presence in key markets.

Consulting

We also intend to offer design
consulting services and licensing access to its patent portfolio as part of its broader strategy to monetize intellectual property and
technical expertise.

Capitalizing the Company’s
in-house design capabilities and patent portfolio, we plan to unlock additional revenue opportunities while maintaining ensuring cost
efficiency.

Technology

Thunder Power is currently
exploring potential licensing arrangements of intellectual property from its affiliates. These technologies may include, among others,
modular flexible chassis system, wireless charging, multi-link suspension system, light weight engineering, battery management system
(BMS), thermal management systems (TMS), and the use of EV TDPs. No licensing agreements have been finalized, and there can be no assurance
that the Company will obtain rights to any such technologies.

Intellectual Property

Thunder Power, as a holding
company, does not own any patents. Patents are primarily owned by Thunder Power’s wholly owned subsidiary, TP NEV, except for the
EV TDP, the patent for which is owned by Mr. Wellen Sham in his capacity as an individual inventor and patent holder. There is no
licensing agreement in place between Thunder Power and TP NEV or Mr. Sham. These patents are predominantly utility patents, with a number
of design patents.

Intellectual property is
important to our business. Our commercial success depends on our ability to obtain, maintain and protect the intellectual property and
other proprietary technology that we develop or acquire the rights to, to operate without infringing, misappropriating or otherwise violating
the intellectual property and proprietary rights of others, and to prevent others from infringing, misappropriating or violating our intellectual
property and proprietary rights. We expect to rely on a combination of patents, trademarks, trade secrets, know-how, continuing technological
innovation, confidential information and other measures to develop and maintain our proprietary position including through personnel,
contractor, consultant and third-party nondisclosure and invention assignment agreements and other contractual arrangements.

Regardless of the protective
measures that we may implement to safeguard our intellectual property and proprietary technology; there is always a risk that alterations
from our products or processes may provide sufficient basis for a competitor to avoid infringement claims. In addition, the coverage claimed
in a patent application can be significantly reduced before a patent is issued and courts can reinterpret a patent’s scope after
issuance. Many jurisdictions, including the United States, permit third parties to challenge issued patents in administrative proceedings,
which may result in further narrowing or even cancellation of patent claims. We cannot provide any assurance that any patents will be
issued from our pending or any future applications or that any current or future issued patents will adequately protect our intellectual
property. For this and other risks related to our proprietary technology, inventions and improvements, please see the section under the
heading “Risk Factors.”

4

TP NEV currently holds 154
issued U.S. patents. Thunder Power does not currently have a licensing agreement in place with TP NEV with respect to such patents, and
there can be no assurance that such agreement will be entered into.

We may explore potential
licensing arrangements for certain technologies developed by our affiliates. No licensing agreements have been finalized, and there can
be no assurance that the Company will obtain rights to any such technologies. Technologies that we hope to have access to through licensing
agreements and intend to invest in and develop include engineering software, drivetrain systems and controls, infotainment, cybersecurity,
telematics and electrical architecture hardware and software. As we develop our technology, we will continue to build our intellectual
property portfolio, including by pursuing patents and other intellectual property protection when we believe it is possible, cost-effective,
beneficial, and consistent with our overall intellectual property protection strategy.

Generally, the terms of individual
issued patents extend for varying periods depending on the date of filing of the patent application or the date of patent issuance and
the legal term of patents in the countries in which they are obtained. Generally, utility patents issued for applications filed in the
United States are granted a term of 20 years from the earliest effective filing date of a non-provisional patent application,
assuming the patent has not been terminally disclaimed over a commonly-owned patent or a patent naming a common inventor, or over
a patent not commonly owned but that was disqualified as prior art as the result of activities undertaken within the scope of a joint
research agreement. The life of a patent, and the protection it affords, is therefore limited and once the patent lives of our issued
patents have expired, we may face competition, including other competing technologies. The duration of foreign patents varies in accordance
with provisions of applicable local law but typically is also 20 years from the earliest effective filing date. The actual protection
afforded by a patent may vary from country to country and can depend upon many factors, including the type of patent, the scope of its
coverage, the availability of patent term adjustments or extensions, the availability of legal remedies in a particular country and the
validity and enforceability of the patent. As a result, our owned patent portfolio may not provide us with sufficient rights to exclude
others from commercializing products similar or identical to ours.

Furthermore, we rely upon
trade secrets and know-how, confidential information, unpatented technologies, continuing technological innovation and other proprietary
information to develop, protect and maintain our competitive position and aspects of our business that are not amenable to, or that we
do not presently consider appropriate for, patent protection and prevent competitors from reverse engineering or copying our technologies.
However, the foregoing rights, technologies and information are difficult to protect. We seek to protect them by, in part, using confidentiality
agreements with our personnel and consultants and any potential commercial partners and collaborators and invention assignment agreements
with our personnel We also have implemented or intend to implement confidentiality agreements or invention assignment agreements with
our selected consultants and any potential commercial partners. These agreements are designed to protect our proprietary information and,
in the case of the invention assignment agreements, to grant us ownership of technologies that are developed through a relationship with
a third party. These agreements may be breached, and we may not have adequate remedies for any breach. There can be no assurance that
these agreements will be self-executing or otherwise provide meaningful protection for our trade secrets or other intellectual property
or proprietary information. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To
the extent that our commercial partners, collaborators, personnel and consultants use intellectual property owned by others in their work
for us, disputes may arise as to the rights in related or resulting know-how and inventions.

Our commercial success will
also depend in part on not infringing, misappropriating or otherwise violating the intellectual or proprietary rights of third parties.
The issuance of third-party patents could require us to alter our development or commercial strategies, change our products or processes,
obtain licenses to additional third-party patents or other intellectual property or cease certain activities. Our breach of any license
agreements or failure to obtain a license for proprietary rights that we may require to develop or commercialize our future products or
technologies may have an adverse impact on us. Given that patent applications in the United States and certain other jurisdictions
are maintained in secrecy for 18 months or potentially longer, and since publication of discoveries in the scientific or patent literature
often lags behind actual discoveries, we cannot be certain of the patent protection being sought by third parties and/or the priority
of inventions covered by such patent applications. Moreover, we may have to participate in interference, revocation, derivation, re-examination,
post-grant review, inter partes review or opposition proceedings brought by third parties or declared by the U.S. Patent and
Trademark Office or an equivalent foreign body. See “Risk Factors” for additional information regarding these and other
risks related to our intellectual property portfolio and their potential effect on us.

5

Showroom rendering (source from Thunder Power):

Facilities and Production

In alignment with our focus
on efficiency and scalability, we expect to conduct all short- and medium-term vehicle production through outsourcing partnerships with
established manufacturing facilities. This approach enables the Company to leverage the expertise, resources, and infrastructure of its
production partners, ensuring high-quality manufacturing standards while maintaining flexibility to scale operations in response to market
demand.

For the longer term, Thunder
Power retains the option to transition to insourced production. This potential shift will be carefully evaluated based on market conditions,
production volumes, and cost efficiencies, with the goal of enhancing operational control and capturing additional value across the manufacturing
process. This dual approach ensures that the Company remains agile and competitive while maintaining the ability to adapt its production
strategy to evolving business needs and industry dynamics.

6

Funding and Revenue

Thunder Power is a pre-revenue company and has
not generated any revenue from the sales of its vehicles. We expect to generate revenue from the sale of our EV Models, the sale and/or
licensing of our technologies, and from any future research and development services that we may provide.

Go-To-Market Strategy

Thunder Power plans to establish
a comprehensive and well-structured network of dealer partners, designed to provide both sales and after-sales service, ensuring seamless
and reliable customer experience. These dealer partners will serve as key touchpoints for customers, offering personalized support, product
education, and maintenance solutions to uphold the brand’s commitment to quality and customer satisfaction. This traditional dealership
model will be complemented by centrally coordinated marketing initiatives, aimed at driving brand visibility and delivering consistent
messaging across all markets. Furthermore, to cater to evolving consumer preferences and the growing demand for convenience, Thunder Power
will also provide customers with the option to order vehicles directly through its online platform. This dual-channel approach allows
the Company to reach a broader audience, offering the flexibility to engage with the brand in a manner that best suits individual preferences,
whether through in-person interactions at dealerships or the convenience of digital commerce.

Competition

Thunder Power anticipates
that it will face competition from both traditional automotive original equipment manufacturer (“OEMs”) and an increasing
number of newer companies focused on electric and other alternative fuel vehicles. Thunder Power expects this competition to increase,
particularly as the transportation sector continues to shift towards low-emission, zero-emission or carbon neutral solutions.

Any of the Company’s
future vehicles are expected to compete with both traditional luxury internal combustion vehicles from established automotive OEMs and
electric and other alternative fuel vehicles from both new manufacturers and established automotive OEMs, many of which have entered or
have announced plans to enter the alternative fuel and EV market. Many major automobile manufacturers, including luxury automobile manufacturers,
have EVs available today, and other current and prospective automobile manufacturers are also developing EVs. In addition, numerous manufacturers
offer hybrid vehicles, including plug-in versions, with which Thunder Power’s vehicles will also compete.

Thunder Power believes the
primary competitive factors on which it will compete include, but are not limited to:

●
product quality, reliability and safety;

●
range, efficiency and charging speeds;

●
product performance;

●
technological innovation, including with respect to AD/ADAS features;

●
access to charging options;

●
design, styling and luxury;

●
service options and customer experience;

●
management team experience at bringing electric vehicles and other disruptive technologies to market;

●
manufacturing efficiency;

●
brand recognition and prestige; and

●
product price.

7

Thunder Power believes that
it is favorably positioned to compete on the basis of these factors. However, many of Thunder Power’s current and potential competitors
have substantially greater financial, technical, manufacturing, marketing and other resources than Thunder Power. Thunder Power’s
competitors may be able to deploy greater resources to the design, development, manufacturing, distribution, promotion, sales, marketing
and support of their products. Additionally, many of Thunder Power’s competitors also have greater name recognition, longer operating
histories, larger sales forces, broader customer and industry relationships and other tangible and intangible resources that exceed Thunder
Power’s. Furthermore, many of Thunder Power’s competitors operate with a traditional sales and dealer distribution model for
vehicles that may be viewed more favorably by potential customers. These competitors also compete with Thunder Power in recruiting and
retaining qualified research and development, sales, marketing and management personnel, as well as in acquiring technologies complementary
to, or necessary for, Thunder Power’s products. Additional mergers and acquisitions in the EV and luxury automotive markets may
result in even more resources being concentrated on Thunder Power’s competitors.

Government Regulations and Credits

Environmental Regulations

(i)
At the U.S. Federal level:

In 2012, the Environmental
Protection Agency (“EPA”) adopted greenhouse gas emissions (GHG) standards for light duty vehicles produced in model years
2017 – 2025 (Control of Air Pollution from Motor Vehicles: Tier 3 Motor Vehicle Emission and Fuel Standards, 79 FR 23414
(Apr. 28, 2014)). In 2020 (The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger
Cars and Light Vehicles, 85 FR 24174 (Apr. 30, 2020)) and 2021 (Revised 2023 and Later Model Year Light-Duty Vehicle Greenhouse
Gas Emissions Standards, 86 FR 74434 (Dec. 30, 2021), the EPA revised and made more stringent its GHG standards and proposed and
finalized a rulemaking (the “2021 rulemaking”), respectively, for model years 2023 – 2026 light-duty passenger
cars. Thunder Power’s production schedule starting in 2025 and covering 2026 will be subjected to these more stringent GHG standards.

On April 22, 2021, the
Biden-Harris Administration announced a 50 to 52 percent target reduction from 2005 levels in GHGs by 2030, representing the U.S. Nationally
Determined Contribution (NDC) under the Paris Agreement. This announcement was followed by Executive Order 14037 on August 5, 2021
(“Strengthening American Leadership in Clean Cars and Trucks”) reinforcing the goal of at least a 50 percent GHG reductions
from new zero-emission vehicles sales by 2030. In addition, in 2021 and 2022, respectively, Congress passed the Infrastructure Investment
and Jobs Act (Pub. Law 117-58, Bipartisan Infrastructure Law) and the Inflation Reduction Act (Pub. Law 117-169) providing significant
government-wide funding and support for GHG reductions, including funding for component technology and infrastructure for the manufacture,
sales and use of electric vehicles.

In 2023, the EPA under its
Clean Air Act (CAA) authority proposed new rules for light-duty vehicles with model years 2027 – 2032, specifically
“off-cycle and air conditioning credits, treatment of upstream emissions associated with zero-emission vehicles and plug-in hybrid
electric vehicles in compliance calculations, medium-duty vehicle incentive multipliers, vehicle certification and compliance, new
standards to control refueling emissions from incomplete medium-duty vehicles, battery durability and warranty requirements for light-duty and
medium-duty plug-in vehicles and minor amendments to requirements for aftermarket fuel conversions, importing vehicles and engines,
evaporative emission test procedures, and test fuel specifications for measuring fuel economy.” (Multi-Pollutant Emissions
Standards for Model Years 2027 and Later Light-Duty and Medium-Duty Vehicles, 88 Fed. Reg. 29184, Proposed Rule (May 5,
2023)) Any EVs Thunder Power, as a light-duty vehicle manufacturer (manufacturing vehicles between 8,501 and 14,000 pounds gross
vehicle weight rating (GVWR)), produces in 2027 to 2032 would be subjected to any final rules.

8

In addition, during production
periods from 2025 to 2032, Thunder Power would have to comply with two separate EPA rules on GHG reduction standards.

(ii)
At the U.S. state level:

California: The
2022 Advanced Clean Cars II rule requires all new light-duty vehicles sold in the state of California to be zero-emission vehicles
by 2035. (Id. at 29188, note 14, citing to the California Air Resources Board “California moves to accelerate to 100%
new zero-emission vehicle sales by 2035.” Also, Id. note 15, citing the State of California Office of the
Governor, “Governor Newsom Announces California Will Phase Out Gasoline-Powered Cars & Drastically Reduce Demand for Fossil
Fuel in California’s Fight Against Climate Change”).

New York: In
2021, in advance of Climate Week 2021, New York Governor Hochul signed Legislation (A.4302/A.2758) requiring all new light-duty vehicles
sold in the state of New York to be zero-emission vehicles by 2035. (Id. note 17, citing Governor of New York Press
Office, “In Advance of Climate Week 2021, Governor Hochul Announces New Actions to Make New York’s Transportation Sector Greener,
Reduce Climate-Altering Emissions”).

Massachusetts: Though
not finalized, in 2022, the state of Massachusetts announced that it may ban sale of all new gas-powered vehicles by 2035. (Id.
note 18, citing Boston.com, “Following California’s lead, state will likely ban all sales of new gas-powered cars
by 2035.”).

Washington: Also
in 2022, the Department of Ecology in the State of Washington issued a press release regarding its plan to require 100% of new passenger
cars and trucks to run on zero-emission technology by 2035. (Id. note 20, citing Washington Department of Ecology “Washington
sets path to phase out gas vehicles by 2035.”).

Other States: In
2022, the Associated Press (“AP”) reported that 17 states may follow California’s rule to require all new cars, pickups
and SUVs to be electric or hydrogen powered by 2035. According to the AP article “under the EPA’s Clean Air Act, states must
abide by the federal governments standard vehicle emissions standards unless they at least partially opt to follow California’s
stricter requirements.” (Id. note 21, citing Associated Press, “17 states weigh adopting California’s electric
car mandate”). States such as Virginia, Minnesota, Colorado and Pennsylvania are unsure to follow California’s new laws citing
climate differences and wanting to give consumers options.

(iii)
Globally:

International Zero-Emission Vehicle
Alliance: In November 2021, ZEV announced that by 2035 its members will move to all ZEV sales. (Id.) ZEV members are
Baden-Württemberg, British Columbia, California, Canada, Chile, Connecticut, Costa Rica, Germany, Maryland, Massachusetts, Netherlands,
New Jersey, New York, Norway, Oregon, Québec, Rhode Island, United Kingdom, Vermont, and Washington.

According to the EPA, “at
least 20 countries, as well as numerous local jurisdictions, have announced targets for shifting all new passenger car sales to zero-emission vehicles
in the coming years, including Norway (2025); Austria, the Netherlands, Denmark, Iceland, India, Ireland, Israel, Scotland, Singapore,
Sweden, and Slovenia (2030); Canada, Chile, Germany, Thailand, and the United Kingdom (2035); and France, Spain, and Sri Lanka (2040).”
(Id. note 23, citing Environmental and Climate Change Canada, “Achieving a Zero-Emission Future for Light-Duty Vehicles:
Stakeholder Engagement Discussion Document December 17”).

Emissions Credits

In January 2023, Tesla
reported sales of carbon offset credits or carbon allowances to other manufacturers who failed to meet the emissions standards set by
the California Air Resources board (CARB) of USD 1.78 billion. (Carbon Credits, Jennifer L., Tesla Carbon Credit Sales
Reach Record $1.78 Billion in 2022, Jan. 27, 2023, available at https://carboncredits.com/tesla-carbon-credit-sales-reach-record-1-78-billion-in-2022).

Thunder Power expects to
earn carbon offset credits and other regulatory credits that it will sell to other manufacturers from its manufacture, sale, and/or registration
of Zero Emission Vehicles (“ZEVs”). In addition, Thunder Power anticipated that it will be able to sell ZEV credits in up
to 12 Section 177 States such as California, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon,
Pennsylvania, Rhode Island, Vermont, and Washington. Thunder Power may also expect to earn and sell U.S. Department of Transportation’s
Corporate Average Fuel Economy (“CAFÉ”) credits, EPA’s greenhouse gas credits and credits earned or saleable
in other North American regions, UK, Europe, and Asia.

9

EPA Emissions and Certificate of Conformity

The U.S. Clean Air Act
requires that Thunder Power obtain a Certificate of Conformity issued by the EPA and a California Executive Order issued by the California
Air Resources Board (“CARB”) certifying that its vehicles comply with applicable emissions requirements. A Certificate
of Conformity is required for vehicles sold in the United States, and an Executive Order from the CARB is required for vehicles sold
in states that have adopted California standards. CARB sets California standards for emissions control for certain regulated pollutants
for new vehicles and engines sold in California. States that have adopted the California standards as approved by EPA also recognize the
CARB Executive Order for sales of vehicles. In addition to California, there are 13 other states that have either adopted or are in the
process of adopting the stricter California standards, including New York, Massachusetts, Vermont, Maine, Pennsylvania, Connecticut,
Rhode Island, Washington, Oregon, New Jersey, Maryland, Delaware and Colorado.

Although the Thunder Power
vehicles will have zero emissions, Thunder Power is required to seek an EPA Certificate of Conformity and, for vehicles sold in California
or any of the other 13 states that have adopted the stricter California standards, a CARB Executive Order.

Vehicle Safety and Testing

Thunder Power’s vehicles
will be subject to, and will be required to comply with, numerous regulatory requirements established by the National Highway Traffic
Safety Administration (“NHTSA”), including applicable U.S. Federal Motor Vehicle Safety Standards (“FMVSS”).
Thunder Power intends that its family of EVs will fully comply with all applicable FMVSSs without the need for any exemptions, and we
expect future Thunder Power’s EVs to either fully comply or comply with limited exemptions related to new technologies. Additionally,
there are regulatory changes being considered for several FMVSSs, and while Thunder Power anticipates compliance, there is no assurance
that Thunder Power will comply with such changes under the final versions as enacted.

As a U.S.-based manufacturer,
Thunder Power must self-certify that its EVs meet all applicable FMVSS, as well as the NHTSA bumper standard, or otherwise are exempt,
before its EVs can be sold in the United States. Numerous FMVSS will apply to Thunder Power’s EVs, such as crash-worthiness
requirements, crash avoidance requirements and EV-specific requirements. Thunder Power will also be required to comply with other
federal laws and regulations administered by NHTSA, including, among other things, ensuring its EVs do not contain defects related to
motor vehicle safety, recall requirements, the Corporate Average Fuel (CAFE) standards, Theft Prevention Act requirements, consumer information
labeling requirements, reporting required notices, bulletins and other communications, Early Warning Information reporting, foreign recall
reporting and owner’s manual requirements.

The Automobile Information
and Disclosure Act requires manufacturers of motor vehicles to disclose certain information regarding the manufacturer’s suggested
retail price, optional equipment and pricing. In addition, this law allows inclusion of city and highway fuel economy ratings, as determined
by the U.S. Environmental Protection Agency (EPA), as well as crash test ratings as determined by NHTSA if such tests are conducted.

Thunder Power intends to
bring production in Europe and then expand its offerings within the U.S. and outside of the U.S., and in connection with such expansion
its EVs will be subject to foreign safety, environmental and other regulations. Many of those regulations are different from those applicable
in the U.S. and may require redesign and/or retesting. For example, the European Union (“E.U.”) has established
new approval and oversight rules requiring that a national authority certify compliance with heightened safety rules, emissions limits
and production requirements before vehicles can be sold in each E.U. member state, the initial of which rules were rolled out on September 1,
2020. There is also regulatory uncertainty regarding how these rules will impact sales in the United Kingdom given its withdrawal from
the E.U. These changes could impact the rollout of new vehicle features in Europe.

10

In addition to the various
territorial legal requirements Thunder Power is obligated to meet, Thunder Power’s family of EVs is engineered with the expectation
that it will deliver overall five-star performance in the two main voluntary vehicle safety performance assessment programs, the
U.S. New Car Assessment Program (“NCAP”) and the European New Car Assessment Programme (“Euro NCAP”).
Five-star score is the maximum attainable score. These independent organizations have introduced a number of additional safety related
tests aimed at improving the safety of passenger vehicles, both for occupants and pedestrians involved in collisions with vehicles. Some
of these tests are derived from legal requirements, such as side impact, but have higher performance requirements. Others are unique to
the programs. Areas covered by these tests in 2020 included:

●
Mobile Progressive Deformable Barrier;

●
Full Width Rigid Barrier;

●
Mobile Side Impact Barrier;

●
Side Pole;

●
Far Side Impact;

●
Whiplash;

●
Vulnerable Road Users (Pedestrians and Cyclists);

●
Safety Assist; and

●
Rescue and Extrication

Automobile Manufacturer and Dealer Regulation

In the United States,
state laws regulate the manufacture, distribution, sale and service of automobiles, and generally require motor vehicle manufacturers
and dealers to be licensed in order to sell vehicles directly to residents. Certain states do not permit automobile manufacturers to be
licensed as dealers or to act in the capacity of a dealer, or otherwise restrict a manufacturer’s ability to deliver or service
vehicles. To sell vehicles to residents of states where Thunder Power is not licensed as a dealer, Thunder Power expects to conduct the
transfer of title out of the state. In certain such states, Thunder Power expects to open studios that serve an educational purpose and
where the title transfer may not occur.

Some automobile dealer trade
associations may challenge the legality of Thunder Power’s operations and direct selling operations by OEMs in court and may use
administrative and legislative processes to attempt to prohibit or limit such OEMs’ ability to operate existing stores or expand
to new locations. Certain dealer associations may also actively lobbied state licensing agencies and legislators to interpret existing
laws or enact new laws in ways not favorable to Thunder Power’s planned direct sales and service model. Thunder Power expects dealer
trade associations to continue to lobby state licensing agencies and legislators to interpret existing laws or enact new laws in ways
not favorable to its business model; however, Thunder Power intends to oppose such efforts to limit its ability to operate and intends
to proactively support legislation that enables its business model.

Should Thunder Power not
be allowed to develop relationships with the largest multi-brand and high-end brand dealers in the U.S. it would be difficult
for it as a newcomer to the U.S. EV market to gain a foothold in the U.S. Thunder Power recognizes that its best strategy for
market penetration is to align itself with a U.S. dealership network, especially for sale of the Coupe, and the eventual servicing
of its family of EVs.

11

Battery Safety and Testing Regulation

Thunder Power’s battery
packs are designed to conform to mandatory regulations that govern transport of “dangerous goods,” defined to include lithium-ion batteries,
which may present a risk in transportation. The governing regulations, which are issued by the Pipeline and Hazardous Materials Safety
Administration, are based on the United Nation (“U.N.”) Recommendations on the Safe Transport of Dangerous Goods Model
Regulations and related U.N. Manual Tests and Criteria. The regulations vary by mode of shipping transportation, such as by ocean
vessel, rail, truck or air. Prior to launch, Thunder Power plans to complete all applicable transportation tests for its battery packs,
demonstrating its compliance with applicable regulations. Thunder Power intends to use lithium-ion cells in the high voltage battery
packs in its EVs. The use, storage and disposal of battery packs is regulated under federal law. Thunder Power’s battery packs are
intended to meet the applicable compliance requirements of the UN Manual of Tests and Criteria demonstrating its ability to ship battery
packs by any method. These tests include:

●
Altitude simulation — simulating air transport;

●
Thermal cycling — assessing cell and battery seal integrity;

●
Vibration — simulating vibration during transport;

●
Shock — simulating possible impacts during transport;

●
External short circuit — simulating an external short circuit; and

●
Overcharge — evaluating the ability of a rechargeable battery to withstand overcharging.

Data Privacy and Security Laws

Numerous state, federal and
foreign laws, regulations and standards govern the collection, use, access to, confidentiality and security of health-related and other
personal information and could apply now or in the future to our operations or the operations of our partners. In the United States, numerous
federal and state laws and regulations, including data breach notification laws, health information privacy and security laws and consumer
protection laws and regulations govern the collection, use, disclosure, and protection of health-related and other personal information.
In addition, certain foreign laws govern the privacy and security of personal data, including health-related data. Privacy and security
laws, regulations, and other obligations are constantly evolving, may conflict with each other to complicate compliance efforts, and can
result in investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on data processing.

Employees and Human Capital Resources

As of December 31, 2025,
we had 2 full-time employees. None of our employees are represented by a labor union or party to a collective bargaining agreement.

Our human capital objectives
include retaining and incentivizing existing employees and recruiting and integrating new employees. The principal purposes of our compensation
program, including our equity incentive plans, are to attract, retain and appropriately motivate employees, consultants and directors
through the granting of stock-based compensation awards and cash-based bonus awards.

Corporate Information

Our corporate office
is located at 221 W 9th St #848, Wilmington, DE 19801 and its telephone number is (909) 214-2482. Our telephone number is (909) 214-2482.
Information contained on, or that can be accessed through, our website is not incorporated by reference into this Annual Report on Form
10-K, and you should not consider information on our website to be part of this Annual Report on Form 10-K.

12