Trust is a more valuable asset than technology.

A court summons has instantly pushed Sunwoda, a star second-tier supplier in the power battery industry, to the edge of a cliff.

On December 29, impacted by news of a lawsuit filed by a Geely-affiliated company, Sunwoda's stock price plummeted 15.97% at market open, hitting a new low for the past several months. This commercial dispute, involving a staggering claim of 2.314 billion yuan, may be evolving into a full-blown crisis of confidence for this battery supplier.

According to the announcement, the plaintiff,威睿电动汽车技术有限公司 (Weirui Electric Vehicle Technology Co., Ltd.), alleged in the civil complaint that the battery cells delivered by Sunwoda Power between June 2021 and December 2023 had quality issues, demanding total compensation for losses and expenses amounting to 2.314 billion yuan.

威睿动力 (Weirui Power) is a Geely-affiliated enterprise; its controlling shareholder is Zeekr, with Geely Auto being another major shareholder.

For Sunwoda, this claimed amount is nearly equivalent to the sum of its net profit attributable to shareholders for the entire years of 2023 and 2024.

Geely's PMA platform is used in brands such as Zeekr, smart, Volvo, and Geely Geometry. Following the sale of over 70,000 units of the Zeekr 001 in 2022, the WE86 version equipped with Sunwoda battery cells accounted for more than 60% of those sales.

Geely did not act without warning. Public information shows that starting in 2023, a significant number of Zeekr 001 WE86 owners reported issues including slower charging speeds and inaccurate battery level readings. In December 2024, Zeekr also issued a notice stating that inspections had identified occasional instances of slower charging speeds and abnormal battery capacity degradation curves in some high-mileage Zeekr 001 WE86 vehicles.

Although the issues did not meet the standard for battery warranty replacement, Zeekr still provided free replacement of new battery packs for these users. According to owner reports, the replaced battery packs were marked with the "CATL" logo, indicating that the battery supplier had been switched from Sunwoda to Contemporary Amperex Technology Co., Limited (CATL).

On Sunwoda's list of important clients are not only Geely but also mainstream automakers that hold significant market share in China, such as Li Auto, XPeng, Xiaomi, Volkswagen, and Dongfeng.

These companies once viewed Sunwoda as a crucial ally in reducing costs and countering the dominance of the "Battery King," CATL.

Li Auto's cooperation with Sunwoda began in 2017, and in 2020, it invested 400 million yuan in Sunwoda for research, development, and production.

In 2023, Sunwoda reassigned 1,300 core personnel to establish a dedicated Li Auto business division to serve this key client. Sunwoda's batteries account for a substantial share in volume-selling versions of the Li L7 and L8, such as the Air and Pro trims.

In October of this year, Beijing Li Auto Co., Ltd. and Sunwoda Power Technology Co., Ltd. jointly established Shandong Li Auto Battery Co., Ltd., with each party holding a 50% stake.

The quality controversy surrounding Sunwoda places Li Auto in a dilemma. A subtle "battery selection" issue previously occurred with the Li Auto I6 model: an initial dual-supplier strategy (Sunwoda and CATL) was followed by an announcement that the 2025 model year would standardize on CATL batteries, partly due to user feedback. Later, due to insufficient supply from CATL, Li Auto offered customers a choice – opting for Sunwoda batteries could lead to faster delivery, accompanied by an extended warranty offer. Now, under the shadow of Geely's lawsuit, it is foreseeable that far fewer consumers will be willing to choose Sunwoda.

Currently, facing Geely's lawsuit against Sunwoda, Li Auto's core marketing theme of "family safety" may face a severe test. Similarly, for the Xiaomi SU7 Standard Version, which also uses Sunwoda batteries, the foundation of the "far ahead" superiority boldly proclaimed by CEO Lei Jun during its launch is precisely the stability and reliability of its supply chain. Any negative news concerning a core component supplier could cause immeasurable impact on Xiaomi Auto, which is currently in a critical phase of ramping up deliveries and building its reputation.

Sunwoda stated in its announcement that this lawsuit has not yet gone to trial, and the final judgment remains uncertain.

The company is actively seeking reasonable solutions, strengthening communication and negotiation with relevant parties, and striving to properly resolve the litigation matter as soon as possible.

Financial report data shows that from 2021 to 2023, Sunwoda's power battery revenue was 2.933 billion yuan, 12.687 billion yuan, and 10.795 billion yuan, respectively. After several years of development, in 2024, Sunwoda secured the second position globally among EREV battery manufacturers with an output of 7 GWh, establishing a leading position in this niche segment.

However, the cooperative relationship between Geely and Sunwoda has long since changed.

In September 2021, the two parties established a joint venture, Shandong Geely Sunwoda Power Battery Co., Ltd. According to the latest business registration information, this company is now 70% owned by Zhejiang Jiyao, established after Geely Holding Group strategically integrated its battery business, while Sunwoda Power's stake has been reduced to 30%. The official WeChat account of the joint venture, "Geely Sunwoda," was still updated last Friday, with posts related to Geely, Zeekr, and Sunwoda Power.

Under the weight of the massive lawsuit, this cooperation appears extremely delicate.

On the other side, sources from Geely revealed that Geely's Jiyao Tongxing already possesses industry-leading advanced production capacity for short blade batteries. Currently, it has eight major production bases nationwide, aiming to achieve a production scale of 70 GWh by 2027. These batteries will be deployed in models under brands like Zeekr, Lynk & Co, and Galaxy.

Geely's astronomical lawsuit has exposed the brutal reality beneath the surface prosperity of the power battery industry. Amidst the intensifying price war in the new energy vehicle sector today, automakers are extremely sensitive to battery costs, which provided an entry window for second-tier battery manufacturers. On the other hand, as the "heart" of an electric vehicle, the safety and reliability of batteries are the lifeline for an automaker's brand,不容有失不容有失 (allowing no room for error).

When the demand for "cost reduction" conflicts with the bottom line of "reliability," automakers will unhesitatingly choose the latter. This incident serves as a stark warning to all battery manufacturers: beyond production capacity, customer base, and revenue scale, building a rock-solid reputation for quality and customer trust is the truly insurmountable moat. Any technical specifications or cost advantages can collapse instantly once they lose the foundation of "reliability."

For Sunwoda, this crisis represents both a severe survival challenge and potentially an opportunity for a radical, transformative overhaul. How it thoroughly investigates the root causes, rebuilds its quality system, and communicates transparently with customers and the public will determine its ability to weather this storm.

For the entire industry, the answer to the question, "Who would dare use Sunwoda now?" not only concerns the fate of one company but will also influence the future evolution of the power battery market landscape. Will the duopoly of CATL and BYD become even more entrenched, or will other second-tier manufacturers find new ways to survive under stringent quality scrutiny? A deep reshuffling centered on "trust" may have just begun.