Expion360 is preparing to launch its first next-generation lithium battery in the second half of 2026, introducing a product that combines new connectivity and cold-weather technologies with manufacturing changes intended to support further margin expansion.
The new battery incorporates the company’s VHC internal heating technology, SmartTalk Bluetooth connectivity and CANBus communication. Expion360 said the product has also been designed to improve manufacturing efficiency, making the launch part of a broader effort to improve the economics of its battery portfolio rather than simply expand its product lineup.
That focus follows a substantial improvement in Expion360’s profitability at the gross margin level during the second quarter. Gross profit increased 6% year-over-year to approximately $0.7 million even though quarterly net sales declined, while gross margin expanded to 32.4% from 20.8% in the prior-year period.
The margin expansion reflected a deliberate change in Expion360’s revenue mix. The company discontinued the resale of certain low-margin accessories and maintained disciplined pricing across its core battery product lines. Expion360 said those actions created what it views as a higher-quality revenue base that could provide a better earnings profile as sales volumes recover.
Second-quarter net sales totaled $2.0 million, down 32% from $3.0 million a year earlier. However, sales increased 30% sequentially from the first quarter. Management attributed the year-over-year pressure partly to the elimination of low-margin accessory revenue and elevated battery inventory levels held by certain OEM customers entering 2026.
The company is also expanding its relationships with OEM customers ahead of the new product launch. During the quarter, Forest River selected Expion360’s UL 1973-certified lithium-ion battery systems for the Georgetown and Dynamax Grand Sport motorized RV brands. Those programs add to existing relationships covering Forest River’s Dynamax and East to West brands.
Expion360’s second-quarter net loss narrowed to $1.3 million from $1.4 million a year earlier. Selling, general and administrative expenses remained approximately $2.0 million, while the company said lower R&D, salary, benefits and travel expenses were offset by increased legal, professional, sales and marketing costs.
Liquidity remains an important part of the company’s operating picture. Expion360 ended June with $1.5 million in cash and equivalents, down from $3.0 million at the end of 2025. First-half operating cash usage increased to $2.6 million from $1.6 million, while the company reported $4.4 million in working capital and $4.8 million in stockholders’ equity.
Subsequent to the quarter, Expion360 completed a 1-for-12 reverse stock split and regained compliance with Nasdaq’s minimum bid-price requirement. Management said its priorities now include converting expanded OEM relationships into revenue, executing the next-generation product launches, maintaining the recent margin improvements and controlling capital and operating expenses.
KEY QUOTES:
“Our second quarter results reflect meaningful progress on the margin improvement initiatives we have been executing throughout 2026. Gross profit increased 6% year over year to $0.7 million even as net sales declined, and gross margin expanded more than 11 percentage points to 32.4% from 20.8% in the prior-year period. This is the direct result of our decision to discontinue the resale of certain low-margin accessories and to maintain disciplined pricing across our core battery product lines. We believe a higher-quality revenue base positions the Company for an improved earnings profile as volumes recover.”
“We remain on track to launch the first next-generation lithium battery in the second half of 2026. This product incorporates our VHC™ internal heating technology, SmartTalk™ Bluetooth connectivity, and CANBus communication, while also being designed to improve manufacturing efficiency and support further margin expansion.”
Joseph Hammer, Chief Executive Officer and Chairman of the Board of Directors of Expion360
