Just under a fortnight after being sued for a staggering 2.3 billion yuan over "battery cell issues," Sunwoda is now entangled in a global recall initiated by Volvo.
Volvo has recently announced a global recall of certain new energy vehicle models, drawing significant market attention.
The recall was prompted by a thermal runaway risk associated with the high-voltage batteries installed in its all-electric EX30 model. This model has subsequently been recalled in the United States, Canada, South Africa, Australia, and other countries.
South Africa was the first to issue an official recall notice, making it the world's first official document addressing this specific issue. The scope of this recall continues to widen. In the UK, 10,440 Volvo EX30 vehicles have been confirmed as affected, covering single-motor long-range and dual-motor high-performance versions from the 2024 to 2026 model years.
To mitigate the risk, Volvo urgently recommended that affected owners reduce their charging limit to 70%. However, this temporary measure directly leads to a significant reduction in vehicle range, severely impacting the daily user experience and sparking widespread dissatisfaction and complaints among owners.
This global recall crisis is undoubtedly adding insult to injury for Volvo, which is already facing sales pressure.
In recent years, this luxury brand has experienced persistently weak performance in the global market, particularly in China.
In 2024, Volvo's global sales reached 763,400 units, an increase of 8% year-on-year. However, sales in China, its largest single market, amounted to only 156,400 units, marking the lowest figure in nearly five years.
Volvo's performance in 5 has yet to show significant improvement.
Third-quarter financial reports revealed that the company's global sales were 160,500 units, down 7% year-on-year and 11.6% quarter-on-quarter; revenue was 86.4 billion Swedish Krona, a decrease of 6% year-on-year. For the first three quarters, Volvo's cumulative sales totaled 514,300 units, with sales in the Chinese market accounting for 105,300 units, representing 20.5% of total global sales.
However, the core controversy of this recall event centers on defining the responsibility for battery supply. Market rumors suggest the recall stems from safety hazards in batteries supplied by Sunwoda. A US NHTSA notice explicitly states that the problematic battery cells in the recalled vehicles were produced by Shandong Geely Sunwoda.
Sunwoda's Chairman, Wang Wei, responded to media inquiries by stating that the affected battery packs were not supplied directly by Sunwoda but by a factory within Volvo's system. The battery cells, however, originated from the joint venture between Geely and Sunwoda—Shandong Geely Sunwoda Power Battery Co., Ltd., in which Sunwoda holds only a 30% stake.
Sunwoda stated that after the involved battery cells were produced by this joint venture, they were supplied to Volvo's battery system supplier. After being assembled into battery packs, they were then sold to Volvo. The entire transaction has no direct connection with Sunwoda Power.
This is not the first "conflict" between the Geely ecosystem and Sunwoda.
This recall comes just half a month after Sunwoda was sued by VREMT, an affiliate of Zeekr, over battery cell quality issues. The close succession of these two events has thrust this power battery manufacturer into a dual storm of public opinion and operational challenges.
The cooperation between the two parties began in 2021. At that time, to secure its supply chain and gain pricing power, Zeekr introduced Sunwoda as a second supplier alongside CATL. They even established the Shandong Geely Sunwoda Power Battery Co., Ltd. joint venture to deepen their ties, forming a tiered supply strategy: "primary supply from CATL, secondary supply from Sunwoda." The long-range version was equipped with CATL's 100 kWh battery pack, while the performance version (WE86 model) used Sunwoda's 86 kWh battery pack.
Sunwoda's ability to join was due to its flexible commercial terms and price advantages, with its quote for a comparable battery being approximately 9,000 yuan per unit lower than CATL's. This low price also sowed the seeds of trouble for the cooperation.
Just two years into the partnership, starting in 2023, a large number of Zeekr 001 WE86 model owners collectively reported issues such as charging speeds being halved, significant range degradation (actual winter range falling short of official figures by up to 150 kilometers), inaccurate battery level displays, and even sudden power loss.
In its lawsuit, VREMT explicitly accused Sunwoda of delivering battery cells from 2021 to 2023 with inherent defects such as "inconsistent voltage platforms" and "excessive internal resistance differences." These minor deviations were amplified over time within battery packs composed of hundreds of cells, ultimately leading to irreversible degradation in battery pack performance.
Sunwoda, in turn, pointed the finger at VREMT's integration process, arguing that VREMT, as the designer of the battery pack (Pack) and BMS (Battery Management System), employed overly aggressive charging strategies. Furthermore, subsequent "power locking" operations altered the battery's usage conditions, causing the problems to manifest.
The core disagreement, where both parties stick to their own stories, essentially revolves around defining responsibility: whether it lies with hardware defects in the battery cells or with the system integration process.
A shift in the industry's development stage acted as a catalyst for the breakdown of the cooperation. The new energy vehicle industry has transitioned from a rough expansion phase focused on "grabbing capacity and scaling up" to a refined cultivation phase emphasizing "quality, cost control, and争夺主导权 (competing for dominance)." Automakers' tolerance for battery safety issues is approaching zero.
To address the battery problems, Zeekr initiated a "Winter Care Campaign" in 2024, providing free replacement with CATL battery packs for 40,000 to 50,000 affected vehicles, with an estimated cost exceeding 1 billion yuan. This hefty after-sales expense, coupled with brand reputation damage, made the automaker unwilling to continue "footing the bill" for supplier quality issues.
Furthermore, after Geely completed the consolidation of Zeekr into its financial statements, it achieved a 10%–15% reduction in R&D and BOM costs by integrating the supply chain. It also gained access to stable supply from the CATL joint venture "CATL Geely," reducing its reliance on Sunwoda.
Regarding the battery cell-related issues involved in the aforementioned two events and subsequent handling plans, inquiries were sent to Sunwoda, but the company did not respond.
The consecutive quality incidents are impacting Sunwoda's customer trust and order structure.
As former key clients, automakers like Li Auto and Xiaomi have begun adjusting their procurement strategies, switching battery suppliers to CATL for some models. This directly led to a sharp reduction in the number of Li Auto models equipped with Sunwoda batteries in 2025, dropping from 10 models to just 3. Last year, due to user concerns and other reasons, the Li Auto i8 model changed its battery supplier from a "mixed use of CATL and Sunwoda" to exclusively using CATL batteries across the entire series. Just with Li Auto alone, Sunwoda lost配套 (supply for) 7 models last year. Similarly, XPeng's current cooperation with Sunwoda is limited to after-sales batteries for older models; new XPeng vehicles are not equipped with batteries produced by Sunwoda.
In 2025, the main automakers Sunwoda supplies are Dongfeng Motor (including Dongfeng Nissan), SAIC-GM-Wuling, Li Auto, and Jianghuai Automobile Group (JAC). Among these, it supplies 28 models for Dongfeng Motor (including Dongfeng Nissan), an increase of 11 models compared to 2024, and 17 models for SAIC-GM-Wuling, representing its largest incremental growth in 2025.
The combined effect of the global recall and the massive lawsuit has triggered industry-wide skepticism about the safety of Sunwoda's products. As automakers continue to raise the entry barriers for their supply chains, industry insiders analyze that Sunwoda may face increased difficulty in securing new orders, worrying that it could be caught in a double bind: pressure on existing market share and obstacles to obtaining new orders.
Behind these successive problems, the deterioration in quality control resulting from Sunwoda's low-price expansion strategy is coming to a head.
In a bid to capture market share, Sunwoda has long employed a low-price competition strategy, while the gross profit margin for its power battery business has continued to decline. In the first half of 2025, its gross margin was merely 9.77%, down 1.89 percentage points year-on-year. This figure is not only far below CATL's 22.41% and Eve Energy's 17.6%, but also less than half of its own gross margin for consumer-grade batteries.
This model of "trading price for volume coupled with declining gross margins" has directly led to continuous losses in its power battery business. In 2024, Sunwoda recorded a loss of 1.87 billion yuan. Cumulative losses from 2023 to the first half of 2025 exceeded 4.5 billion yuan. The deterioration of its financial situation has further triggered a chain reaction. As of the end of September 2025, the company's asset-liability ratio climbed to 67.62%, with total liabilities reaching a hefty 67.9 billion yuan. Among these, short-term borrowings surged 43.2% year-on-year to 17.3 billion yuan, and long-term borrowings increased 37.7% year-on-year to 9.9 billion yuan, putting significant pressure on its cash flow.
More critically, the market is concerned that ongoing litigation disputes and operational losses may hinder Sunwoda's planned IPO in Hong Kong. The company had previously stated its intention to list in 2026, with an estimated fundraising scale of 5 to 6 billion yuan.
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