Aeva Technologies, Inc.: Form 10-Q for the period ended Jun 30, 2025

The following discussion of Aeva’s results of operations and financial condition should be read in conjunction with the information set forth in the condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion may contain forward-looking statements based upon Aeva’s current expectations, estimates, and projections that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements due to, among other considerations, the matters discussed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”) under the heading “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” Unless the context otherwise requires, all references in this section to “we,” “our,” “us” “the Company” or “Aeva” refer to the business of Aeva Technologies, Inc., a Delaware corporation, and its subsidiaries.

On March 18, 2024, we filed a Certificate of Amendment to our Amended and Restated Certificate of Incorporation (the “Amendment”) with the Secretary of State of the State of Delaware to effect a 1-for-5 reverse stock split (the “Reverse Stock Split”) of shares of common stock, $0.0001 par value (the “common stock”). Pursuant to the Reverse Stock Split, every five (5) shares of issued and outstanding shares of common stock were combined into one (1) share of common stock. All share and per share amounts presented herein have been retroactively adjusted to reflect the Reverse Stock Split. There was no change to the shares authorized or in the par value per share of common stock of $0.0001.

The Reverse Stock Split affected all stockholders uniformly and did not alter any stockholder’s percentage interest in the Company’s equity. The Company did not issue fractional shares in connection with the Reverse Stock Split. Stockholders who were otherwise entitled to fractional shares of common stock were instead entitled to receive a proportional cash payment. The number of shares of common stock issuable under our equity incentive plans and exercisable under the outstanding warrants were also proportionately adjusted.

Overview

Our vision is to bring perception to broad applications. Through our Frequency Modulated Continuous Wave ("FMCW") sensing technology, we believe we are introducing the world’s first 4D LiDAR-on-chip that, along with our proprietary software applications, has the potential to enable the adoption of LIDAR across broad applications.

Founded in 2017 by former Apple engineers Soroush Salehian and Mina Rezk and led by a multidisciplinary team of engineers and operators experienced in the field of sensing and perception, Aeva’s mission is to bring the next wave of perception technology to broad applications from automated driving to industrial automation, consumer device applications, and security. Our 4D LiDAR-on-chip combines silicon photonics technology that is proven in the telecom industry with precise instant velocity measurements and long-range performance for commercialization.

As a development stage company, we work closely with our customers on the development and commercialization of their programs and the utilization of our products in such programs. Thus far, our customers have primarily purchased prototype products and engineering services from us for use in their research and development programs. We are expanding our manufacturing capacity through third-party manufacturers to meet our customers’ anticipated demand for the production of our products.

Unlike legacy 3D LiDAR, which relies on Time-of-Flight (“ToF”) technology and measures only depth and reflectivity, Aeva’s solution leverages a proprietary FMCW technology to measure velocity in addition to depth, reflectivity and inertial motion. We believe the ability of Aeva’s solution to measure instant velocity for every pixel is a significant advantage over ToF-based sensing solutions. Furthermore, Aeva’s technology is free from interference from other LiDAR and sunlight, and our core innovations within FMCW are intended to enable autonomous vehicles to see at significantly higher distances of up to 500 meters.

We believe Aeva is uniquely positioned to provide a superior solution with the potential to enable higher level of automation for vehicles. Furthermore, we believe the advantages of our 4D LiDAR-on-chip allow us to provide the first LiDAR solution that is fully integrated onto a chip with superior performance at scale, with the potential to drive new categories of perception across industrial automation, consumer devices, and security markets.

Key Factors Affecting Aeva’s Operating Results

We believe that Aeva's future performance and success depends to a substantial extent on our ability to capitalize opportunities, which in turn is subject to significant risks and challenges, including those discussed in Part I, Item 1A of the 2024 Form 10-K under the heading “Risk Factors.”

Pricing, Product Cost and Margins. Our pricing and margins will depend on the volumes and the features, as well as specific market applications of the solutions we provide to our customers. We have customers with technologies in various stages of development across different market segments. We anticipate that our prices will vary by market and application due to market-specific product and commercial requirements, supply and demand dynamics and product lifecycles.

Aeva’s future performance will depend on our ability to deliver on economies of scale. Our customers will require that our perception solutions be manufactured and sold at per-unit prices that are competitive. Our ability to compete in key markets will depend on the success of our efforts to efficiently and reliably produce cost-effective perception solutions that are competitively priced and affordable for our commercial-stage customers.

Additionally, the macroeconomic conditions in the industry, the growing emergence of competition in advanced assisted driving sensing and software technologies globally can negatively impact pricing, margins and market share. Our business is impacted by various macroeconomic factors, including inflation, interest rates, levels of consumer confidence and consumer debt, fuel and energy costs, and other economic conditions. In addition, we are susceptible to supply chain disruptions, which may be exacerbated by changes to tariffs and trade policies. Given the nature of these macroeconomic factors, we cannot predict whether or for how long certain trends will continue, nor can we predict to what degree these trends will impact us in the future. If we do not generate the margins we expect upon commercialization of our perception solutions, we may be required to raise additional debt or equity capital, which may not be available or may only be available on terms that are onerous to Aeva’s stockholders.

Commercialization of LiDAR-based Applications. We expect that our results of operations, including revenue and gross margins, will fluctuate on a quarterly basis for the foreseeable future as our customers continue on research and development projects and begin to commercialize advanced driver assist, autonomous and industrial automation solutions that rely on LiDAR technology. The development cycles of our products with new customers varies widely depending on the application, market, customer and the complexity of the product, and can vary from several months to seven or more years depending on the industry. These development cycles result in us investing our resources prior to realizing any revenue from the commercialization or obtaining any firm commitments of pricing, volume or timing of purchases of our products by our customers. As customers reach the commercialization phase and as the market for LiDAR solutions matures, these fluctuations in our operating results may become less pronounced.

Sales Volume. Each product program will have an expected range of sales volumes, depending on the end market demand for our customers’ products as well as market application. This can depend on several factors, including market penetration, product capabilities, size of the end market that the product addresses and our end customers’ ability to sell their products. In addition to end market demand, sales volumes also depend on whether our customer is in the development or production phase. In certain cases, we may provide volume discounts or strategic customer pricing on sales of our solutions, which may or may not be offset by lower manufacturing costs related to higher volumes which in turn could adversely impact our gross margins. Our ability to ultimately achieve profitability is dependent upon progression of existing relationships to production and our ability to meet required volumes and required cost targets and gross margins. The protracted development cycle required for customers to reach the commercialization phase, as well as any delays of our current and future customers’ programs could result in us being unable to achieve our revenue targets and profitability in the time frame we anticipate. This could result in Aeva requiring to raise additional debt or equity capital, which may not be available or may only be available on terms that are onerous or highly dilutive to our stockholders.

Basis of Presentation

Our condensed consolidated financial statements include the accounts of our wholly owned subsidiaries. We have eliminated intercompany accounts and transactions.

Components of Results of Operations

Revenue

Revenue consists of sales of perception solutions or sensing systems and non-recurring engineering services.

Aeva is engaged in design, manufacturing and sale of LiDAR sensing systems and related perception and autonomy-enabling software solutions serving customers in automotive, industrial, and other markets. Under our customer agreements, Aeva delivers a specified number of sensing systems at a fixed price under customary terms and conditions. The sensing system units sold under these agreements are typically prototypes that are used by the customer for its research, development, evaluation, pilot, or testing purposes. We also enter into non-recurring engineering service arrangements with certain of our customers to customize Aeva’s perception solution to meet customer specific requirements.

Cost of revenue and gross profit

Cost of revenue principally includes direct material, direct labor and allocation of overhead associated with manufacturing operations, including inbound freight charges and depreciation expense. Cost of revenue also includes the direct cost and appropriate allocation of overhead involved in execution of non-recurring engineering services. Aeva’s gross profit equals total revenue less total cost of revenue.

Operating expenses

Research and development expenses

Aeva’s research and development efforts are focused on enhancing and developing additional functionality for our existing products and on new product development. Research and development expenses consist primarily of:

• Personnel-related expenses, including salaries, benefits, and stock-based compensation expense, for personnel in Aeva’s research and engineering functions; and
• Expenses related to materials, software licenses, supplies, and third-party services.

Aeva recognizes research and development expenses as incurred.

General and administrative expenses

General and administrative expenses consist of personnel and personnel-related expenses, including salaries, benefits, and stock-based compensation expense of Aeva’s executive, finance, information systems, human resources, and legal teams, as well as legal and accounting fees for professional and contract services.

Selling and marketing expenses

Selling and marketing expenses consist of personnel and personnel-related expenses, including salaries, benefits, and stock-based compensation expense of Aeva’s business development team as well as advertising and marketing expenses. These include the cost of trade shows, promotional materials, and public relations.

Interest income and interest expense

Interest income consists primarily of income earned on Aeva’s cash equivalents and investments in marketable securities. Interest income varies based on Aeva’s cash equivalents and marketable securities balance and changes in the interest rates.

Change in fair value of warrant liability

The change in fair value of the warrant liability consists of increases or decreases in the fair value of the Series A warrants issued in connection with the Facility Agreement (as defined in Note 10 to our condensed consolidated financial statements), as well as the private placement warrants.

Fair value loss on share subscription liability

Fair value loss on share subscription liability consist of increase or decrease in the fair value of the instrument under the LG Subscription Agreement (as defined in Note 10 to our condensed consolidated financial statements), which is classified as a liability because the instrument was not considered indexed to our common stock as the total number of shares to be issued is not fixed.

Other income and expense

Other income and expense primarily consist of foreign currency transaction gains and losses, as well as realized gains and losses on marketable securities.

Results of Operations

The results of operations presented below should be reviewed in conjunction with the condensed consolidated financial statements and notes included elsewhere in this Quarterly Report on Form 10-Q.

Comparison of the Three Months Ended June 30, 2025, and 2024

The following table sets forth our results of operations data for the periods presented:

(in thousands, except percentages)

Revenue

Revenue increased by $3.5 million, or 174% during the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The increase was primarily due to an increase in the total number of units sold and an increase in non-recurring engineering revenue recognized during the current period, which is dependent upon the timing of the work performed for our customers.

Cost of revenue

Cost of revenue increased by $5.4 million, or 188%, during the three months ended June 30, 2025, from the three months ended June 30, 2024. The increase was primarily due to a $3.8 million loss recognized on a joint development agreement and also due to an increase in the production cost related to units sold during the current period as compared to the prior period.

Operating expenses

Research and development expenses

Research and development expenses decreased by $3.4 million, or 13%, to $22.8 million for the three months ended June 30, 2025, from $26.2 million for the three months ended June 30, 2024. The decrease was primarily due to a $2.4 million decrease in payroll related expense, a $1.4 million decrease in research and development material expense, a $0.8 million decrease in stock based compensation expense, a $0.3 million decrease in consulting expense, a $0.4 million decrease in software license expense and a $0.3 million decrease in facility expense, partially offset by a $2.2 million increase in research and development services.

General and administrative expenses

General and administrative expenses decreased by $0.7 million, or 8%, to $8.0 million for the three months ended June 30, 2025, from $8.7 million for the three months ended June 30, 2024. The decrease was primarily due to a $1.3 million decrease in legal fees, a $0.3 million decrease in payroll related expense, a $0.5 million decrease in professional fee expense, a $0.2 million decrease in other employee related expense and a $0.1 million decrease in travel expense, partially offset by a $1.4 million increase in stock based compensation expense, a $0.2 million increase in software license expense and a $0.1 increase in recruiting expense.

Selling and marketing expenses

Selling and marketing expenses decreased by $0.3 million, or 18%, to $1.4 million for the three months ended June 30, 2025, from $1.7 million for the three months ended June 30, 2024. The decrease was primarily due to a $0.3 million decrease in payroll related expense.

Interest income

Interest income decreased by $1.5 million, or 71%, during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The decrease was due to a decrease in the overall balance of interest-bearing cash equivalents and marketable securities for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024.

Change in fair value of warrant liability

The change during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, is due to a $91.3 million increase in the fair value of the Series A warrants issued in connection with the Facility Agreement and a $0.6 million increase in fair value to private placement warrants.

Fair value loss on share subscription liability

The fair value loss on share subscription liability of $70.0 million during the three months ended June 30, 2025 was a non cash charge due to change in fair value of common stock to be issued under the LG Subscription Agreement.

Comparison of the Six Months Ended June 30, 2025, and 2024

The following table sets forth our results of operations data for the periods presented:

(in thousands, except percentages)

Revenue

Revenue increased by $4.8 million, or 116% during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. The increase was primarily due to an increase in the total number of units sold and an increase in non-recurring engineering revenue recognized during the current period, which is dependent upon the timing of the work performed for our customers.

Cost of revenue

Cost of revenue increased by $4.9 million, or 78%, during the six months ended June 30, 2025, from the six months ended June 30, 2024. The increase was primarily due to a $3.8 million loss recognized on a joint development agreement and also due to an increase in the production cost related to units sold during the current period as compared to the prior period.

Operating expenses

Research and development expenses

Research and development expenses decreased by $6.8 million, or 13%, to $44.4 million for the six months ended June 30, 2025, from $51.2 million for the six months ended June 30, 2024. The decrease was primarily due to a $4.5 million decrease in payroll related expense, a $1.8 million decrease in research and development material expense, a $1.8 million decrease in stock based compensation expense, a $0.6 million decrease in consulting expense, a $0.3 million decrease in facility expense and a $0.2 million decrease in depreciation expense, partially offset by a $2.4 million increase in research and development services expense.

General and administrative expenses

General and administrative expenses decreased by $1.9 million, or 11%, to $15.2 million for the six months ended June 30, 2025, from $17.1 million for the six months ended June 30, 2024. The decrease was primarily due to a $1.3 million decrease in legal fees, a $0.9 million decrease in payroll related expense, a $1.0.million decrease in professional fee expense, a $0.3 million decrease in insurance expense, a $0.3 million decrease in other employee related expense and a $0.1 million decrease in travel expense, partially offset by a $1.91 million increase in stock based compensation expense and a $0.1 increase in facility expense.

Selling and marketing expenses

Selling and marketing expenses decreased by $0.9 million, or 21%, to $3.3 million for the six months ended June 30, 2025, from $4.2 million for the six months ended June 30, 2024. The decrease was primarily due to a $0.4 million decrease in payroll related expense by and a $0.5 million decrease in marketing expense.

Interest income

Interest income decreased by $2.9 million, or 64%, during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The decrease was due to a decrease in the overall balance of interest-bearing cash equivalents and marketable securities for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.

Change in fair value of warrant liability

The change during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, is due to a $96.3 million increase in the fair value of the Series A warrants issued in connection with the Facility Agreement and a $0.6 million increase in fair value to private placement warrants issued.

Fair value loss on share subscription liability

The fair value loss on share subscription liability of $70.0 million during the six months ended June 30, 2025 was a non cash charge due to change in fair value of common stock to be issued under the LG Subscription Agreement.

Liquidity and Capital Resources

Sources of Liquidity

Our capital requirements will depend on many factors, including production capacity and sales volume, the timing and spending to support research and development efforts, investments in information technology, the expansion of sales and marketing activities, and market adoption of new and enhanced products and features.

On November 8, 2023, we entered into subscription agreements providing for the purchase of common stock resulting in net proceeds of $20.6 million. Also on November 8, 2023, we entered into a Standby Equity Purchase Agreement (as amended from time to time, the “Facility Agreement”) with entities affiliated with Sylebra. Pursuant to the Facility Agreement, we have the right, but not the obligation, to sell to Sylebra up to $125.0 million of shares of preferred stock, at our request until November 8, 2026, subject to the terms of the Facility Agreement and the satisfaction of certain conditions as described in Note 10 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Each sale we request under the Facility Agreement may be for a number of shares of preferred stock with an aggregate value of at least $25.0 million but not more than $50.0 million (except with Sylebra’s consent). We paid Sylebra a facility fee of $2.5 million, an origination fee of $0.6 million, and an administrative fee of $0.3 million and reimbursed $0.4 million to Sylebra for its fees and expenses. In addition, we issued to Sylebra Series A warrants to purchase 3,000,000 shares of common stock at an exercise price of $5.00.

On July 2, 2024, Aeva and the parties to the Delaware Stockholder Litigation entered into a term sheet, and on December 6, 2024 entered into a formal settlement agreement, which will be subject to court approval, to fully and finally resolve the Delaware Stockholder Litigation. In connection with the settlement, we have agreed to pay a total settlement cost of $14.0 million in exchange for a release of all claims. The settlement is being paid pursuant to our indemnification obligations and from available director and officer insurance policies. As of June 30, 2025, we have paid an amount of $2.8 million and accrued a contingent liability of $11.2 million in other current liabilities on the condensed consolidated balance sheets in connection with the settlement of the Delaware Stockholder Litigation. We have also recovered $2.5 million from an insurance carrier. See Note 15 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information about the Delaware Stockholder Litigation.

On May 13, 2025, we entered into a subscription agreement with LGIT, a company organized under the laws of the Republic of Korea, pursuant to which we agreed to sell and issue to LGIT in a private placement an aggregate of 3,509,719 shares of common stock for aggregate gross proceeds of approximately $32.5 million. This private placement is expected to close in August 2025. In connection with the Private Placement, we entered into a joint development agreement with LGIT, and intend to form a strategic partnership with LGIT to bring Aeva’s 4D LiDAR into new industrial and consumer markets.

To date, we have incurred negative cash flows from operating activities and incurred losses from operations as reflected in our accumulated deficit of $839.5 million as of June 30, 2025. We expect to continue to incur operating losses due to continued investments that we intend to make in our business, including development of products. As of June 30, 2025, we had cash and cash equivalents and marketable securities totaling $49.8 million. We also have the ability to draw on the Facility Agreement up to $125.0 million through November 8, 2026 in exchange for the issuance of preferred shares, and we intend to draw down on the Facility Agreement if and as required by our capital needs. As of June 30, 2025, all conditions to draw under the Facility Agreement were met. We believe that our liquidity, including financing available to us through the Facility Agreement will be sufficient to fund our operating and capital expenditure for at least 12 months from the date of issuance of the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Cash Flow Summary

The following table summarizes our cash flows for the periods presented:

(in thousands)

Operating Activities

For the six months ended June 30, 2025, net cash used in operating activities was $60.6 million, attributable to a net loss of $227.6 million and a net change in net operating assets and liabilities of $15.1 million, partially offset by non-cash charges of $182.1 million. Non-cash charges primarily consisted of $93.9 million change in the fair value of warrant liability, $70.0 million change in the fair value loss on share subscription liability, $10.6 million in stock-based compensation, $3.8 million of loss on joint development agreement, $2.7 million in depreciation and amortization expense, and $1.8 million in amortization of right of use assets, partially offset by a $0.8 million in accretion of discount on available for sale securities. The change in net operating assets and liabilities was primarily due to a $5.8 million decrease in other current liabilities, a $1.8 million decrease in accounts payable, a $1.4 million increase in inventories, a $3.3 million decrease in accrued employee costs, a $1.9 million decrease in lease liability, a $2.9 million decrease in accrued liabilities, and $2.7 million increase in accounts receivable, partially offset by a $2.8 million decrease in other current assets, a $1.5 million increase in other noncurrent liabilities and a $0.5 million decrease in other non-current assets.

Investing Activities

For the six months ended June 30, 2025, net cash provided by investing activities was $54.0 million, attributable to proceeds from maturities of available-for-sale investments of $79.1 million, partially offset by purchase of investments of $23.4 million and purchase of property, plant and equipment of $1.8 million.

Financing Activities

For the six months ended June 30, 2025, net cash used in financing activities was attributable to payment of taxes withheld on net settlement of restricted stock units, partially offset by proceeds from option exercises.

Off-Balance Sheet Arrangements

As of June 30, 2025, we have not engaged in any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Critical Accounting Estimates

We prepare our financial statements in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates, assumptions and judgments that can significantly impact the amounts Aeva reports as assets, liabilities, revenue, costs and expenses and the related disclosures. We base our estimates on historical experience and other assumptions that we believe are reasonable under the circumstances. Aeva’s actual results could differ significantly from these estimates under different assumptions and conditions. We believe that the accounting policies discussed below are critical to understanding our historical and future performance as these policies involve a greater degree of judgment and complexity.

For the six months ended June 30, 2025 there were no significant changes to our critical accounting estimates except for as described below. For a more detailed discussion of our critical accounting policies and estimates, please refer to our 2024 Form 10-K and Note 1 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Warrants and Share Subscriptions

The Company accounts for warrants and other equity-linked contracts (i.e., share subscriptions) as equity or liability-classified instruments based on an assessment of the instrument’s specific terms and applicable authoritative guidance in FASB ASC 480, *Distinguishing Liabilities from Equity (“*ASC 480”), and ASC 815-40, *Derivatives and Hedging – Contract in Entity’s Own Equity (“*ASC 815-40”).

The Company first assesses whether a freestanding equity-linked instrument should be classified as a liability pursuant to ASC 480 when the instrument is mandatorily redeemable, obligates the issuer to settle an instrument or the underlying shares by paying cash or other assets, or must or may require settlement by issuing variable number of shares and such settlement scenario is predominantly likely to occur.

If an equity-linked instrument does not trigger liability classification under ASC 480, the Company assesses whether the instrument meets all requirements for equity classification under ASC 815-40, including whether the instrument is indexed to the Company’s own common stock, among other conditions for equity classification. If not, the instrument is classified as a liability and is further analyzed to determine whether the instrument represents a derivative in its entirety. This assessment requires the use of professional judgment and requires reassessment of an instrument’s classification at each reporting period while the instrument remains outstanding.

Equity-linked instruments that meet all equity classification conditions are recorded as a component of additional paid-in capital at issuance. Equity-linked instruments accounted for as liabilities are recognized and measured at fair value at inception and each reporting period the instrument remains outstanding. Any excess fair value over proceeds to be realized from the equity-linked instruments entered into at arm’s length, along with any changes in fair value, as determined at each reporting period, are recorded as a component of fair value loss on share subscription liability on the consolidated statements of operations and comprehensive loss. Changes in fair value are reported on the consolidated statements of cash flows as a non-cash reconciling item between net loss and net cash flows from operating activities.

Provision for Anticipated Losses on Contracts

When estimated contract costs exceed expected consideration under contracts with a customer, the Company evaluates whether the nature of the contract is in the scope of Accounting Standards Codification (“ASC”) 605-35, *Revenue Recognition - Construction-Type and Production-Type Contracts(“*ASC 605-35”). If ASC 605-35 applies, the Company recognizes a provision for the entire anticipated losses on contracts as soon as the loss becomes evident. In determining the anticipated losses, the Company considers the principles in ASC 606-10-32-2 through 32-27 (except for the guidance in paragraphs 606-10-32-11 through 32-13 on constraining estimates of variable consideration) to determine the transaction price, adjusted to reflect the effects of the customer's credit risk. The costs used in arriving at the estimated loss on a contract shall include all costs of the type allocable to contracts under paragraphs 340-40-25-5 through 25-8.

The provision for anticipated losses on contracts of $2.3 million is classified as a current liability and $1.5 million is classified as a noncurrent liability on the consolidated balance sheet and as a component of cost of revenue on the condensed consolidated statements of operations and comprehensive loss.

Recent Accounting Pronouncements

See Note 1 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the date of this Quarterly Report on Form 10-Q.

Aeva is exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of fluctuations in interest rates. There has been no material change in our exposure to market risks from that discussed in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of the 2024 Form 10-K.

Evaluation of disclosure controls and procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures as of June 30, 2025, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in internal control over financial reporting

There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent limitation on the effectiveness of internal control

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Our business, reputation, results of operations and financial condition, as well as the price of our common stock, can be affected by a number of factors, whether currently known or unknown, including those described in Part I, Item 1A of the 2024 Form 10-K under the heading “Risk Factors.” When any one or more of these risks materialize from time to time, our business, reputation, results of operations and financial condition, as well as the price of our common stock, can be materially and adversely affected. There have been no material changes to our risk factors since the 2024 Form 10-K, other than the following:

Our growth depends in part on the success of our strategic partnerships with third parties.

From time to time, we enter into strategic partnerships with third parties to enhance and extend our capabilities in the ordinary course of our business. Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources.

For example, in May 2025, we entered into a share subscription agreement with LG Innotek Co., Ltd. for aggregate gross proceeds of approximately $32.5 million. This private placement is expected to close in August 2025. In connection with the Private Placement, we entered into a joint development agreement with LGIT, with the goal of establishing a strategic partnership to bring Aeva’s 4D LiDAR into new industrial and consumer markets. We may never achieve or realize the anticipated financial and other benefits of the strategic partnership with LGIT.

If we are unsuccessful in establishing or maintaining strategic partnerships, or if our strategic partnerships fail to perform as expected, our ability to compete or to grow our revenue could be impaired, which could adversely affect our business, financial condition, and results of operations. Even if we are successful, we cannot assure you that these relationships will result in increased production of our products, development of new products, or increased revenue.

If we fail to maintain an effective system of internal controls, our ability to produce timely and accurate financial statements or comply with applicable regulations could be adversely affected.

We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules and regulations of the NASDAQ Stock Market (“NASDAQ”). We expect that the requirements of these rules and regulations will continue to increase our legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly, and place significant strain on our personnel, systems and resources. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting, and to furnish a report by management on the effectiveness of our internal control over financial reporting pursuant to Section 404 of The Sarbanes-Oxley Act (“Section 404”). As a result of no longer qualifying as an “emerging growth company” and becoming a large accelerated filer, we are also required to comply with, among other requirements, the auditor attestation requirements of Section 404 as of December 31, 2025.

In order to maintain and improve the effectiveness of our controls and procedures we have expended, and expect that we will continue to expend, significant resources, including accounting-related costs, and provide significant management oversight, as we continue to refine our controls and procedures to comply with the demands placed upon us as a public company, including the requirements of Section 404. Our current controls and any new controls that we develop may be inadequate. Further, weaknesses or deficiencies in our internal controls have been identified in the past and may be discovered in the future. Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could adversely affect our operating results or cause us to fail to meet reporting obligations and may result in a restatement of our financial statements. Ineffective controls and procedures could also result in loss of investor confidence in the accuracy and completeness of our financial reports and a decline in our stock price, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities.

Ownership of Aeva is concentrated in our management.

As of the date of this Quarterly Report on Form 10-Q, our officers and directors, as well as entities they are affiliated with or control, beneficially own or control approximately 49.4% of our outstanding shares of common stock. This ownership does not reflect convertible securities underlying shares of common stock. The change from prior periods reflects the fact that certain shares owned by Mr. Rezk were pledged as collateral for a loan and this pledge is now the subject of a dispute. Based on the information provided to Mr. Rezk, we and Mr. Rezk believe that the pledged shares may have been sold prior to June 2025. Neither we nor Mr. Rezk makes any assertion as to the outcome of that dispute.

This concentrated ownership and control by our management could adversely affect the status and perception of our common stock and/or warrants. In addition, any material sales of common stock of our management, or even the perception that such sales will occur, could cause a material decline in the trading price of our common stock and/or warrants. Due to this ownership concentration, our management has significant influence on all matters requiring stockholder approval, including the election of directors, the approval of mergers or acquisitions, and other significant corporate transactions. Any person acquiring our common stock most likely will have no effective voice in the management of our company. This ownership concentration also could delay or prevent a change of control of the company, which could deprive our stockholders from receiving a premium for their common shares.