{"url_path":"/sec/ucar/10-k/2026/item-11","section_key":"item-11","section_title":"Item 11 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1939780/0001213900-26-057792-index.html","accession_number":"0001213900-26-057792","cik":"0001939780","ticker":"UCAR","issuer_name":"U Power Ltd","edgar_url":"https://www.sec.gov/Archives/edgar/data/1939780/0001213900-26-057792-index.html","primary_entity_key":"0001939780","primary_entity_name":"U Power Ltd"},"word_count":317,"has_tables":true,"body_markdown":"**Item\n11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**\n\n** **\n\n**Concentration\nof Credit Risk**\n\n \n\nFinancial\ninstruments that potentially expose us to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.\nAs of December 31, 2025, 2024 and 2023, our cash and cash equivalents amounted to RMB22.0 million (US$3.1 million), RMB23.4 million\n(US$3.2million) and RMB1.9 million (US$0.3million), respectively. We place our cash and cash equivalents and restricted cash with financial\ninstitutions with high credit ratings and quality. Historically, deposits in Chinese banks are secure, due to the state policy on protecting\ndepositors’ interests. In the event of bankruptcy of one of these financial institutions, we may not be able to claim our cash\nand demand deposits back in full. We continue to monitor the financial strength of the financial institutions.\n\n \n\nWe\nconduct credit evaluations of customers, and generally do not require collateral or other security from our customers. We establish an\nallowance for doubtful accounts primarily based upon the age of the receivables and factors surrounding the credit risk of specific customers.\n\n \n\n117\n\n** **\n\n**Liquidity\nRisk**\n\n \n\nOur\npolicy is to regularly monitor our liquidity requirements and our compliance with lending covenants, to ensure that we maintain sufficient\nreserves of cash and readily realizable marketable securities and adequate committed lines of funding from major financial institutions\nto meet its liquidity requirements in the short and longer term. See “Item 5. Operating and Financial Review and Prospects\n— B. Liquidity and Capital Resources” for details.\n\n \n\n**Inflation**\n\n \n\nTo\ndate, inflation in China has not materially affected our results of operations. According to the National Bureau of Statistics of China,\nthe year-over-year percent changes in the consumer price index for December 2025, 2024 and 2023 were increases of 0.8%, 0.2% and\n-0.3%, respectively. Although we have not been materially affected by inflation in the past, we may be affected if China experiences\nhigher rates of inflation in the future."}