Sunwoda and Geely Reach Settlement in Battery Lawsuit

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Shares of Sunwoda Electronics and Geely Automotive surged today following a settlement announcement in a legal dispute over battery quality issues. The Chinese battery supplier confirmed an agreement with a major automaker to settle a lawsuit valued at approximately $336 million.

Sunwoda’s stock closed up 4.5% at CNY25.19 ($3.64), after initially jumping 7.8% to CNY26 during the trading session. Meanwhile, Geely’s shares rose 1.7%, closing at HKD16.59 ($2.12), after reaching a high of HKD16.91 earlier in the day.

According to the company, it will pay CNY608 million ($87.8 million) in damages to Viridi E-Mobility Technology, covering costs already incurred due to battery defects. The companies also agreed to split any additional costs from January 1, 2026, onward, related to battery testing or replacements.

Once the payment is completed, the subsidiary responsible for key systems like batteries, motors, and electronic controls in Geely’s new energy vehicles will dismiss its lawsuit. The case stemmed from claims that battery cells supplied by Sunwoda between June 2021 and December 2023 had quality issues, involving a dispute over more than CNY2.3 billion ($320 million).

The settlement is projected to reduce Sunwoda’s net profit attributable to shareholders by between CNY500 million ($72.1 million) and CNY800 million ($115 million) in 2025.

The batteries in question powered Viridi’s Pure Electric Module Architecture, including Geely’s Zeekr 001 WE86, a premium all-electric vehicle. Owners reported slower charging times and inaccurate battery level readings as the vehicles aged and mileage increased.

In response, Zeekr launched a battery health monitoring program in December 2024 and began providing free replacement batteries for affected vehicles. Over 10,000 cars have already received new batteries, according to sources. Viridi subsequently filed a lawsuit demanding Sunwoda cover the costs of the replacements and compensate for losses related to battery quality concerns.