Sunwoda Shares Slide After Geely Affiliate Files Battery Lawsuit

(Yicai) Dec. 29 -- Shares of Chinese lithium battery developer Sunwoda Electronic plunged nearly 16 percent today after the company disclosed that it had been sued by a Geely-affiliated firm over alleged quality issues with its battery cells, with claimed damages exceeding CNY2.3 billion (USD320 million).Sunwoda [SHE: 300207] slipped 11.4 percent to close CNY26.36 (USD3.80) after slumping as much as 16 percent intraday. The sharp selloff followed a Dec. 26 announcement in which Sunwoda said a subsidiary had received a lawsuit filed by Ningbo-based Viridi E-Mobility Technology, according to the company’s disclosure.Business registration records show that Viridi was established in 2017 and is controlled by new energy vehicle maker Zeekr, with Geely Auto Group as another major shareholder. The dispute centers on battery cells supplied by Sunwoda.Sunwoda said the case has not yet gone to trial and that the outcome remains uncertain, making it difficult to assess any impact on current or future profits. The company added that it is actively seeking a reasonable resolution through communication and negotiation with the relevant parties.The amount involved in the lawsuit is significant. Financial statements show Sunwoda’s combined net profit attributable to shareholders in 2023 and 2024 totaled CNY2.5 billion, nearly equivalent to the compensation sought.The case involves the luxury all-electric Zeekr 001, a key model equipped with Sunwoda battery cells. More than 70,000 units were sold in 2022 alone, with the WE86 version accounting for over 60 percent. As deliveries increased, some owners reported slower charging speeds and inaccurate battery level readings.A year ago, Zeekr said it launched a special battery health monitoring campaign. Inspections found that some high-mileage Zeekr 001 WE86 vehicles experienced occasional slower charging and abnormal battery capacity degradation curves. Although these issues did not meet warranty replacement thresholds, Zeekr said it still replaced battery packs for affected users free of charge.In the first half of this year, many Zeekr owners said they were contacted by after-sales services for battery inspections, with some reporting that their battery packs had been replaced. The new packs were Contemporary Amperex Technology-labeled, leading some owners to believe Sunwoda batteries had been swapped out.Editor: Emmi Laine