A major lawsuit claiming up to 2.3 billion yuan has recently thrust lithium battery leader Sunwoda Electronic Co., Ltd. into the spotlight.

On December 26, Sunwoda announced that its subsidiary, Sunwoda Power Technology Co., Ltd., has been sued by WeRide Electric Vehicle Technology (Ningbo) Co., Ltd., with the latter seeking 2.314 billion yuan in compensation, citing quality issues with battery cells.

In its announcement, Sunwoda pointed out that the lawsuit has not yet gone to trial, and the final judgment remains uncertain, making it temporarily impossible to assess the impact on the company's profits. The company is actively seeking a reasonable resolution, strengthening communication and negotiation with relevant parties, and striving to resolve the litigation matter promptly and properly.

Tianyancha data reveals that WeRide was established in 2017 and is a company affiliated with the Geely group.

Notably, the claimed compensation amount of 2.314 billion yuan exceeds Sunwoda's net profit from the previous year.

From an unknown entity to the "Battery King," Sunwoda's rise is inseparable from the sharp business acumen of its founder, Wang Mingwang. Now, with the arrival of this lawsuit, the Maoming billionaire, whose wealth is estimated at 11.5 billion yuan, and the company he founded are about to face a significant product quality control challenge.

The lithium battery giant Sunwoda is facing a 2.3 billion yuan compensation claim due to alleged battery quality issues.

On the evening of December 26, lithium battery giant Sunwoda announced that its subsidiary, Sunwoda Power, received a statement of claim, a notice to respond to the lawsuit, and other litigation documents from the Ningbo Intermediate People's Court on December 25.

The announcement shows that due to a dispute over a sales contract, the plaintiff, WeRide, has requested the court to order the defendant, Sunwoda Power, to compensate for losses amounting to 2.314 billion yuan. Additionally, WeRide seeks interest calculated based on the Loan Prime Rate published by the National Interbank Funding Center from the date of filing until actual payment, and requests that Sunwoda Power bear all litigation costs for this case.

Sunwoda stated in the announcement that the lawsuit has not yet been heard in court. The uncertainty of the subsequent judgment outcome makes it impossible to assess the potential impact on the company's current or future profits at this time.

Simultaneously, Sunwoda expressed that it is actively pursuing reasonable solutions, enhancing communication and consultation with the relevant parties, and aiming to resolve the litigation matter properly and swiftly.

Information from Tianyancha indicates that WeRide was founded in 2017, is a member of Zeekr Intelligent Technology Holding Limited, and is primarily engaged in automobile manufacturing.

Regarding shareholders, Zeekr Automobile (Shanghai) Co., Ltd. holds a 51% stake in WeRide, while Geely Automobile Group Co., Ltd. holds the remaining 49%.

Previously, on December 22, Geely Automobile announced the completion of the privatization and merger transaction for Zeekr, making Zeekr a wholly-owned subsidiary of Geely Automobile and leading to its delisting from the New York Stock Exchange.

It is understood that the basis for WeRide's claim is that the battery cells delivered by Sunwoda Power between June 2021 and December 2023 allegedly had quality issues, resulting in substantial losses for WeRide.

Last December, Zeekr issued an announcement stating that some long-range Zeekr 001 WE86 vehicles experienced occasional issues such as slower charging speeds and abnormal battery capacity degradation curves, which affected the user experience.

Although these issues did not meet the standard for battery warranty replacement, Zeekr still provided free replacement of new battery packs for the affected users. The model in question was equipped with Sunwoda batteries.

The claimed compensation amount of 2.314 billion yuan surpasses Sunwoda's entire net profit for 2024.

What does a claim of 2.314 billion yuan represent? In 2024, Sunwoda's net profit was 1.468 billion yuan, meaning the claimed amount is 1.58 times the company's net profit from the previous year. If the court upholds all of WeRide's claims, it could deliver a significant blow to Sunwoda's development.

In recent years, with the rapid development of the new energy industry, Sunwoda, as a leader in lithium-ion batteries, has achieved steady growth in its performance.

From 2014 to 2024, Sunwoda's revenue grew consistently from 4.279 billion yuan to 56.021 billion yuan.

During the same period, the company's net profit increased from 168 million yuan to 1.468 billion yuan.

In the first three quarters of this year, Sunwoda achieved revenue of 43.534 billion yuan, a year-on-year increase of 13.73%; it recorded a net profit of 1.405 billion yuan, an increase of 15.94% compared to the same period last year.

Looking at quarterly performance, in the third quarter of this year, Sunwoda's operating revenue was 16.549 billion yuan, up 15.24% year-on-year, while net profit surged 41.51% year-on-year to 550 million yuan, reversing the decline in net profit seen in the second quarter.

However, the company's net profit attributable to shareholders after deducting non-recurring gains and losses showed weakness, reaching only 1.015 billion yuan in the first three quarters, a decrease of 12.74% compared to the previous year.

It is noteworthy that although the global penetration rate of new energy vehicles has increased rapidly, driving high-speed expansion in the company's power battery business, the gross profit margin of this segment has declined.

In the first half of this year, Sunwoda's total power battery shipment volume was 16.08 GWh, a surge of 93.04% year-on-year, generating revenue of 7.604 billion yuan, an increase of 22.63% compared to the same period last year.

However, the gross profit margin for its power batteries decreased by 1.89 percentage points year-on-year to just 9.77%, significantly lower than the 22.41% gross margin reported by industry leader Contemporary Amperex Technology Co., Limited for its power battery system during the same period.

Notably, Sunwoda also faces certain challenges regarding cash flow. In the first three quarters of this year, the net cash flow from operating activities was 2.422 billion yuan, a decrease of 7.46% compared to the previous year.

Furthermore, to further improve its production capacity layout in Thailand and meet the needs of future business development and overseas market expansion, Sunwoda plans to use its own and raised funds to invest in the second phase of a green energy lithium battery factory project in Thailand, with an investment amount not exceeding 482 million US dollars. Own funds will account for 29% of this, approximately 138 million US dollars, while bank loans will cover 71%, approximately 343 million US dollars.

If the company loses the lawsuit and is required to pay compensation, the construction of the Thailand Phase II project could further intensify pressure on Sunwoda's funding chain.

Regarding assets and liabilities, as of the end of the third quarter, Sunwoda's total assets were 100.442 billion yuan, an increase of 17.82% year-on-year. Of this, monetary funds stood at 21.503 billion yuan, while inventory reached 9.935 billion yuan.

During the same period, the company's short-term borrowings increased significantly by 54.90% year-on-year to 13.766 billion yuan; non-current liabilities due within one year were 3.531 billion yuan; and long-term borrowings were 9.915 billion yuan, bringing the total liabilities to 67.915 billion yuan.

Based on this calculation, as of September 30, Sunwoda's asset-liability ratio reached 67.62%, an increase of 5.28 percentage points compared to the same period last year.

The development journey of Sunwoda is inextricably linked to the entrepreneurial struggles of its founder, Wang Mingwang. Relying on his sharp business instincts, he gradually led the company to become the "Battery King."

Public records show that Wang Mingwang was born in 1967. At the age of 17, with just a few dozen yuan scraped together by his family, he ventured alone to Shenzhen to seek his fortune.

Between 1992 and 1993, Wang Mingwang started two businesses, but both ended in failure due to issues with profit distribution and conflicts in philosophy with his partners.

In 1995, a significant turning point arrived in Wang Mingwang's life. At that time, a fire at Sony's Fukushima battery factory caused global battery prices to soar. Wang Mingwang quickly seized the opportunity and earned his "first pot of gold" by supplying components to Sony.

In 1997, Wang Mingwang and his cousin, Wang Wei, founded Sunwoda in Shenzhen, initially focusing on OEM battery pack assembly.

In 2000, Sunwoda established its first SMT production line and a 5,000-square-meter independent testing laboratory. Through stringent quality control, the company successively became a supplier for international brands such as Philips, Apple, Lenovo, and OPPO.

In 2008, Sunwoda began research and development for Battery Management Systems (BMS), modules, and packs for power batteries.

In 2011, under Wang Mingwang's leadership, Sunwoda successfully listed on the Shenzhen Stock Exchange's ChiNext board, becoming the first ChiNext company in China primarily focused on the R&D and manufacturing of lithium batteries.

In 2014, Sunwoda established a dedicated subsidiary for power batteries, Sunwoda Power, which achieved mass production of power battery cells in 2018. The following year, Sunwoda successfully ranked among the top 10 globally in terms of power battery installation volume.

Subsequently, Sunwoda's power battery business experienced rapid expansion.

As the company grew, so did Wang Mingwang's wealth. According to the "2025 Hurun Global Rich List," he and his wife, Cai Di'e, ranked 2295th on the list with a fortune of 11.5 billion yuan.

Radar Finance will continue to monitor the subsequent developments at Sunwoda.