Thank you for standing by. This is the conference operator. Welcome to the Microvast third quarter 2021 earnings call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Sarah Alexander, Microvast General Counsel. Please go ahead.
Thank you, Cherise, and thank you everyone for joining us today. Hosting the call with me are Mr. Yang Wu, President and Chief Executive Officer, and Leon Zheng, Chief Financial Officer. Shane Smith, our Chief Operating Officer, is also on the line to help out with Q&A. Ahead of this call, Microvast issued its third quarter press release, which can be found on the investor relations section of our website at ir.microvast.com. Please note that on this call, we will be making forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views only as of today and should not be relied upon as representative about views as of any subsequent date. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events.
These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For further discussion of the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC, including the quarterly report on Form 10-Q filed this afternoon. In addition, during today's call, we may discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Microvast performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. A webcast replay of this call will also be available on the investor relations section of our company website. With that, I'd like to turn the call over to Mr. Wu.
Thank you, Sarah, and good afternoon, everyone. I would like to start out by thanking our employees for their outstanding contributions to Microvast's success. I would also like to thank our shareholders for their commitment and our customers for their support. The third quarter of 2021 was eventful. We successfully completed our business combination with Tuscan Holdings in July. The transaction raised $708 million in net cash proceeds to help fund our growth initiatives, including our ongoing capacity expansion in Clarksville, Tennessee and Huzhou, China. In addition, we've already moved into our new R&D facility in Orlando, Florida. We are pleased with the progress at the three of those sites, which is a difficult time for construction projects given labor shortages, inflation and other challenges.
We recently posted time-lapse into our social media accounts showing the progress of the construction of the new buildings on our campus in Huzhou, which will be referred to as Phase three. Once completed, this building will feature approximately 700,000 sq ft of manufacturing space designed for 4 GWh per year production capacity in total. The 2 GWh per year fully automated production line is under construction and is planning to be completed in end of 2022 to first quarter of 2023. I am proud of the progress we have made in just a few months since this transaction closed. In Clarksville, we purchased an existing building earlier this year, and the renovations to make the building and the utilities ready for our manufacturing are underway.
In Orlando, our existing employees have been moving into the new facility, and we are actively recruiting to expand our R&D team. We continue to invest in R&D to ensure that our battery technologies remain on the forefront, and we expect to announce two new products in the first quarter of 2022. We will have more information about those developments in our next earnings call. Before turning the call over to Leon to review our financial results, I'd like to highlight a few key takeaways about Microvast. We are now live to the public markets, and we have been in business since 2006. We are an established battery manufacturer and innovator.
We achieved revenue growth of 20% during the quarter and 43% year to date, each as compared to the same period in 2020. This growth was achieved in the face of many macroeconomic and industry-level challenges, including global supply chain disruptions, logistic challenges, increasing raw material prices, inflation, and ongoing COVID-19 pandemic. Historically, our business was concentrated in Asia Pacific. However, we are focused on gaining momentum with our customer base in Europe and North America. This momentum is evidenced by 53% growth in our forecasted contract revenue, which grew from $1.5 billion in February 2021, when the merger was announced, to $2.3 billion at the end of September.
When we refer to forecast contract revenue, we are describing backlog plus management's estimates for revenue we expect to realize from the existing contractual relationships with customers. To be included, we also have signed contract increase, purely in the form of framework or supply agreements. In addition, we have had advanced discussions with customers about the future volume requirements for particular products or vehicle models. These contracts also include pricing and other terms and conditions. However, they do not adequately include volume commitments. We expect to realize current forecasted contract revenue between 2021 to 2031. We also saw backlog growth of 65% to $53 million from $32 million in September 2020. We are pleased to see the global trend toward electrification continue in the United States.
With the recent passage of the Infrastructure Investment and Jobs Act, the bill provides solid support for electrification efforts in the United States, which we expect to increase our addressable market and accelerate our progress and opportunities in North America. I now turn it over to Leon to discuss third quarter financial results.
Thank you, Mr. Wu. Despite the many industry-wide headwinds we have faced, we grew revenue for the third sequential quarter. Revenue grew 20% this quarter, and is up 43% year- to- date, each compared to the same period last year. Gross loss was $35.9 million, compared to gross profit of $3.7 million in Q3 2020. The change was largely due to a $35.6 million product warranty expense accrual and a $6.6 million inventory write down. In addition, increased battery raw material costs and the $2.3 million share-based compensation accrued following the business combination also negatively impacted our Q3 gross profit. Before we move to operating expenses, I would like to provide more context on the warranty accrual.
Most warranty accrual in this quarter was related to a legacy product sold to certain customers in China during 2017 and 2018. This legacy product experienced performance which doesn't meet our standards, leading us to perform a rigorous root cause analysis. Following the completion of the root cause analysis in early October 2021, we determined the cause was a component sourced from third-party supplier. We believe it's more likely than not we will need to replace this legacy product during the remaining warranty period and the term of the sales contract. Accordingly, we accrued a $34.1 million one-time warranty expense related to this legacy product in this third quarter. The component was not incorporated into any of our other products.
If we exclude the one-time warranty expense accrual, the inventory write down, and the share-based compensation expense, the company's adjusted gross profit would have been $7 million instead of -$3.59 million loss during the quarter. This translates to an adjusted gross margin of 19%. Operating expense was $78 million, compared to $12.7 million in the prior year period. The change in operating expenses was primarily due to a $56 million share-based compensation expense accrued following the business combination, as well as increased headcounts to support the company's planned growth initiative and other expenses related to the operating as a public company. Net loss was $116.4 million, compared to a net loss $10.1 million in the same quarter of last year.
The change was primarily due to the reduction in gross profit and a higher operating expense, as we discussed, described above. Turning to our balance sheet. The business combination with Tuscan in July bolstered our cash position. Microvast ended the third quarter with approximately $612.5 million in cash equivalents and restricted cash. Finally, let me talk about our backlog and the CapEx spending. As of September 30, 2021, we had a backlog of $52.7 million, the increase of 65% from $31.7 million in the same quarter of last year. We are currently ramping up our production efforts to perform a majority of this backlog in Q4 this year, which gave us confidence and reaffirm our 2021 revenue guidance. However, we are closely monitoring logistics, especially bottlenecks in international shipping. Moving to CapEx.
Based on the equipment delivery timeline and the scheduling during the upcoming holiday season, the company expects some of its previously planned capital expenditure for 2021 to take place in early 2022. Total capital expenditure for 2021 are now expected to be in the range $120 million-$150 million. With that, I will turn back to Mr. Wu to discuss our business outlook.
Thank you, Leon. As Leon mentioned, we are closely monitoring challenges in international shipping. Based on the current market conditions, backlog business trends and other factors, we are re-affirming our previous outlook and continue to expect the full year 2021 revenues to be in the range of $145 million-$155 million. Additionally, as temporary supply chain headwinds dissipate, we believe we are well positioned to capitalize in 2022 and beyond. We are in the middle of our budget cycle and expect to be able to provide additional clarity on 2022 on our next earnings call. Thank you for your time today. I will turn it back over to the operator who will open up the line for questions.
Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We will pause for a moment as callers join the queue. Once again, if you have a question, please press star then one. At this time, there are no questions from the phone lines.
Thank you, operator. At this time, we're gonna move to questions submitted in response to our Ask Microvast campaign. We appreciate all the questions submitted, and it's great to have such strong support across our retail investor base. Given the volume we've received, we will focus on the most frequently asked topics, but we loved hearing directly from all of you. With that, by far, the most frequently asked category of question related to updates on specific customers or contracts. Now, Shane, I know we have non-disclosure agreements in place with almost all of our customers, but what updates are we able to share with the investment community at this time?
Thanks, Sarah. We are sometimes able to negotiate with our customers to make public announcements about specific projects or partnerships, but not always. What we can tell you is that our forecasted contracted revenue has grown significantly since we announced the business combination in February 2021. It's up 53% from $1.5 billion to $2.3 billion. This is an encouraging metric that shows we're continuing to win major multi-year contracts with leading OEMs, validating the strength of our existing product portfolio. We do hope to be in a position to provide some additional details about these new and existing customer relationships in the next couple of months.
Great. Thanks, Shane. We recently announced the purchase of a new R&D facility in Florida, and we also received a lot of follow-up questions on that. Mr. Wu, are you able to elaborate on the plans for this new facility?
Yes, Sarah. You know, as everybody know it, Microvast is a fully vertical integrated company. You know, we make materials, battery cell, battery pack, battery system, you know, from top to the bottom. Our R&D center will do the same to support our growth. R&D center in Florida, we will explore, you know, all spectrum of technologies from battery material to battery cell, battery pack, battery management. You know, our mission statement for our research center is create excellence to power the world.
Great. Thank you. There was also a lot of interest in our ongoing capacity expansions. Shane, are you able to add any color?
Sure. Our capacity expansions are underway, and we expect CapEx to increase in Q4 as we implied in the guidance we provided in the press release. I would like to go through each one of the facilities real quick. In Huzhou, as Mr. Wu previously noted, we're building a new building on our existing campus. We're ordering enough equipment to support 2 GWh of capacity, but the building is designed to support 12 GWh that we will need to add to the utility infrastructure. The building's coming along, and we're in the process of ordering the equipment right now. In Clarksville, we purchased an existing building. We're in the middle of renovations to make the layout of the building suitable for our needs.
Again, the initial capacity will support 2 GWh per year, but the existing building and utilities will be designed for 4 GWh, so we can rapidly respond to customer demand. Additionally, there's enough space on the existing land to add an additional 4 GWh to support future customer demand, giving us a total potential capacity of 8 GWh on the Clarksville facility. Our Berlin facility is operational already, able to ship to customers today. Overall plans are progressing nicely. We're looking forward to completing these projects to meet customer demand. We believe we will realize some nice efficiencies with some of the new manufacturing equipment we order, including a higher level of automation resulting in less headcount.
Awesome. Thanks for that color. I think we've got time to cover one more question from our retail investors, and I believe we have a question on the investment professional line as well. Mr. Wu, a few of our investors have requested additional clarity with respect to Microvast's plans in the passenger vehicle market.
Yes, Sarah. You know, while we are focused, you know, on the commercial vehicles, for passenger vehicles as we, you know, just said before, we, you know, we think most of the car manufacturers, they're going to build a battery manufacturing by themselves. Microvast intended to be their material supplier, component supplier, and as well as, you know, we plan to license the technology to them as well. If we develop it, you know, a very advanced technology, if they like it. That's our, you know, the overview for the passenger vehicle business.
Great.
Thank you, everybody.
I think we have one more question from the investment community, so I'll pass it back over to the operator to put him on the line.
Thank you. This next question comes from Jack Kester with Blue Sky Capital. Please go ahead. Jack Kester, your line is now open.
Hello.
Hi, Jack.
Hey, we can hear you.
Yeah. Hi. Hi. Good to hear you guys. Thanks for putting up a great quarter. You know, a lot of us here in the States have been a little bit disappointed in the lack of communication. We'd like to see more clarity and, I understand you have to do the NDAs for the number of your clients, but we would really appreciate any updates you can give us on any granularity and clarity going forward, as you progress. We think Microvast is an exciting company, and we're behind you 100%. You got a big retail base along with the institutional investors, and we'd like to see that grow, you know, maybe get some analyst coverage, et cetera.
Anything that you can do to help us out would be greatly appreciated in terms of communication and, you know, clearly letting us know. A new slide deck today would have been great. We've been using the one since February, and if you can get that updated, that would be great too.
Well, Jack, all really good points, and I think you will hear a lot about Microvast going forward. There's actually a lot to talk about. We, as a newly public company, there was a lot of things we had to get in place, but we believe those are in place. We did wanna start giving some visibility in what we're seeing with new customers. That's why we're highlighting $800 million in new contract wins. That's a pretty significant mark. Now, sometimes, as I spoke earlier, being able to name what those customers are, that can be tough. Hey, we're working on those, getting their permissions to get those press releases out.
Sometimes we're gonna be successful at doing that, and sometimes we're not. I think we're heading in the right direction. I think you can expect to hear more announcements from us as we knock down those achievements and make the progress towards our goals.
That's great. We're looking forward to that. Can you give us any color on the U.S. Postal Service contract with Oshkosh?
I really wish I could. Oshkosh is a great strategic investor and a great partner. It's again one of those subjects that I know you can get frustrated with when you can't say anything about it. It's just we're really fortunate to have Oshkosh as a partner.
Understand. Thank you very much for your time today, and please keep us up on all the developments going on at Microvast. Sounds like it's an exciting time.
Sure will. Thanks a lot, Jack.
At this time, there are no additional questions in the queue.
We'll turn it back over to Mr. Wu for closing remarks.
Yeah. Thank you all, you know, for this afternoon to join our conference, and I wish you that everybody have a good dream tonight.
This concludes the conference call. You may disconnect your line. Thank you for participating and have a pleasant day.