Investing requires looking at the Golden Unicorn Analyst Reports, which are authoritative, professional, timely, and comprehensive, helping you uncover potential thematic opportunities! Sunwoda Electronic Co.,Ltd. (300207.SZ) has been "a bit troubled" lately. At the beginning of 2026, Volvo, a brand under Geely Holding, initiated emergency recalls for its all-electric SUV EX30 in multiple countries worldwide. The reason was potential safety hazards associated with the high-voltage battery installed in this model. As the battery cell supplier, Sunwoda was thrust into the spotlight. According to reports, in response to market rumors that "the batteries supplied by Sunwoda pose safety risks," Sunwoda's chairman denied the allegations, stating that the battery packs in question were not supplied directly by Sunwoda. The cells within them were produced by a joint venture between Geely and Sunwoda—Shandong Geely Sunwoda Power Battery Co., Ltd., in which Sunwoda holds only a 30% stake. Even before this controversy arose, Sunwoda was already facing a lawsuit from WeRui Electric, an entity within the Geely system, over quality issues with cells supplied by a subsidiary. The claimed amount is as high as 2.314 billion yuan, nearly equivalent to Sunwoda's total net profit for the past two years combined. Lin Xianping, an associate professor at Zhejiang University City College, pointed out that Sunwoda's recent consecutive encounters with recalls and claims due to battery cell quality issues expose the quality control risks inherent in its rapid expansion model reliant on low-price strategies. Under pressure from gross profit margins that have long been below the industry average, companies might make trade-offs in R&D and quality control. As of January 22, 2026, Sunwoda's stock closed at 24.47 yuan per share, with a total market capitalization of 44.84 billion yuan.
Crises Pile Up Beyond the "Ning Wang" (CATL), the power battery industry is experiencing turbulent times, with various "new players" fiercely competing. Within just one month, Sunwoda suffered two heavy blows. Reports indicate that in January 2026, Volvo proactively initiated recalls for its all-electric SUV model EX30 in Australia and the United States. The Australian recall involved 2,815 vehicles produced in 2024, while the US recall covered 40 model year 2025 vehicles; both recalls were attributed to overheating risks associated with the vehicles' high-voltage batteries. Responding to speculation about its direct responsibility, Sunwoda promptly issued a clarification. The company stated that the battery packs for the affected EX30 models were assembled by a battery system supplier, with the cells produced by Shandong Geely Sunwoda Power Battery Co., Ltd. A report from the US National Highway Traffic Safety Administration (NHTSA) also confirmed the joint venture as the source of the problematic cells. Business registry information shows that Shandong Geely Sunwoda is controlled by a Geely-affiliated company (holding a 70% stake), while Sunwoda holds only 30%. In fact, even before this recall incident, Sunwoda was already under the spotlight of public opinion due to battery cell quality issues. On the evening of December 26, 2025, Sunwoda announced that its subsidiary, Sunwoda Power Technology Co., Ltd., had been sued, with the plaintiff being WeRui Electric Vehicle Technology (Ningbo) Co., Ltd., a subsidiary of Zeekr. In the lawsuit, WeRui explicitly alleged that cells delivered by Sunwoda between 2021 and 2023 had 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, however, shifted responsibility to WeRui's integration process, arguing that WeRui, as the designer of the battery pack and Battery Management System (BMS), employed overly aggressive charging strategies, and subsequent "locking" operations altered battery usage conditions, causing the issues to surface. Analysis suggests that the core dispute, where each party holds its own view, essentially revolves around defining responsibility between inherent cell hardware defects and system integration. It is noteworthy that this massive claim of approximately 2.3 billion yuan is almost equivalent to the sum of Sunwoda's net profit for the entire year of 2024 and the first half of 2025. Sunwoda stated in its announcement that the lawsuit has not yet gone to trial, the final outcome is uncertain, and the specific impact on the company's profits cannot currently be assessed. According to official website information, WeRui was established in 2013 and belongs to Geely Holding Group. WeRui began cooperating with Sunwoda in 2021. From April to July 2021, Sunwoda released announcements disclosing that Sunwoda Power had received a letter of development intent from WeRui for power battery cells for the PMA platform project, to supply cells for that project. The announcements also indicated that the Geely Auto PMA platform products are platform-based products applied to brands such as Zeekr, smart, Volvo, and Geometry. Reports indicate that Sunwoda did not disclose specific details about the cells alleged to have quality issues in this case, but external observers widely linked them to Zeekr's move to replace batteries for users free of charge at the end of 2024. In December 2024, Zeekr issued a notice regarding a winter care activity for Zeekr 001 WE86 users. The notice showed that Zeekr had received feedback from some users about issues like slower charging speeds and inaccurate perceived battery levels. Consequently, Zeekr launched a special battery health inspection campaign. Through comprehensive testing, Zeekr found that some high-mileage Zeekr 001 WE86 vehicles exhibited occasional issues like slower charging speeds and abnormal battery capacity decay curves, affecting user experience. Although these did not meet the standard warranty replacement threshold, Zeekr still provided free replacement of new battery packs for these users. Furthermore, the announcement disclosed that as of December 26, 2025, Sunwoda and its controlling subsidiaries had some undisclosed minor litigation and arbitration cases, involving a total amount of approximately 210 million yuan, accounting for 0.88% of the company's most recently audited net assets.
The quality storm has also prompted the market to re-examine Sunwoda's position in the industry. According to statistics from the China Automotive Power Battery Industry Innovation Alliance, in the first 11 months of 2025, Sunwoda ranked sixth domestically in power battery installation volume, with installations of 21.8 GWh, representing a 3.25% market share. The top five were Contemporary Amperex Technology Co., Limited (CATL) (42.92%), BYD (22.10%), CALB (6.95%), Gotion High-tech (5.63%), and EVE Energy Co., Ltd. (4.1%). Lin Xianping stated that this incident could become a catalyst for a shift in the competitive logic of the power battery industry. As the new energy vehicle market matures, demands from consumers and automakers for battery safety, lifespan, and performance are increasing. The industry is moving from pure price competition towards a comprehensive contest involving technology, quality, and supply chain reliability.
Opportunities and Challenges Coexist Sunwoda was founded in 1997, initially starting with 3C consumer battery business. In 2011, Sunwoda successfully listed on the ChiNext board. However, the following year, Sunwoda was suddenly removed from the "Apple supply chain," and its net profit fell by 13.53% that year. Fortunately, Sunwoda quickly adjusted its strategy, successfully joining the supply chains of mainstream mobile phone brands like ZTE, Meizu, OPPO, and Samsung. It once became the world's largest mobile phone battery supplier, with its market capitalization approaching 100 billion yuan at its peak. Today, Sunwoda holds a 34.3% market share in the global mobile phone battery market, still firmly occupying the top industry position, while also ranking second globally in notebook and tablet battery sectors. Between 2022 and 2024, its consumer battery business revenue remained at the 30 billion yuan level, forming a stable performance foundation for the company. As the consumer electronics industry growth slowed, Sunwoda began laying out its power battery business in 2008 and established its subsidiary, Sunwoda Power, in 2014. After achieving mass production of battery cells in 2018, the company's power battery business developed rapidly. Between 2020 and 2024, power battery business revenue surged from 428 million yuan to 15.139 billion yuan, with its contribution to total revenue increasing from less than 3% to 27.02%, becoming the company's second-largest business pillar. In this rapid rise, the strategic cooperation with Geely Group played a key role. In 2021, by securing the cell order for the PMA platform project from Geely's WeRui Electric, Sunwoda broke into the core supply chains of brands like Zeekr, smart, and Volvo. In the same year, the two parties established a joint venture and agreed on large-volume purchase guarantees. This cooperation directly propelled Sunwoda's power battery revenue to grow nearly sixfold that year, and the Geely group quickly became its third-largest customer. However, this close cooperative relationship showed significant cracks in 2024. That year, some Zeekr models faced a large number of user complaints regarding issues like slower battery charging and abnormal capacity decay, ultimately leading to a large-scale free battery pack replacement initiative. Market analysis widely pointed to Sunwoda as the cell supplier. Industry estimates suggested the cost involved in this incident could be as high as several billion yuan. Entering 2025, the rift in cooperation became more public: the Geely side withdrew from the joint venture with Sunwoda. In the港股上市招股书 subsequently submitted by Sunwoda, the Geely group had also disappeared from its list of major customers. In December 2025, this cooperative dispute finally moved into legal proceedings, with Geely's WeRui Electric formally filing a lawsuit against Sunwoda, claiming a massive 2.314 billion yuan, pushing the conflict between the two parties to a new peak. However, following the breakdown of cooperation with Geely and the quality storm, Sunwoda's power battery business faces severe tests. Financial data shows that although the company achieved operating revenue of 43.534 billion yuan in the first three quarters of 2025, a year-on-year increase of 13.73%, and net profit attributable to shareholders of 1.405 billion yuan, up 15.94% year-on-year, the net cash flow from operating activities decreased by 7.46% year-on-year. Meanwhile, the company's non-GAAP net profit decreased by 12.74% year-on-year in the first three quarters of 2025.
It is worth mentioning that just one day before facing the massive claim, on December 25, 2025, Sunwoda teamed up with the globally renowned new energy materials company CNGR Advanced Material Co., Ltd. to enter the solid-state battery field. The announcement stated that the two parties would jointly develop new energy battery materials for solid-state battery applications and promote their industrial implementation, engaging in comprehensive cooperation around the R&D and industrialization of solid-state battery-related materials. Public information shows that CNGR has been deeply involved in the new energy battery materials field for over 10 years, with extensive experience in the R&D and manufacturing of core products like nickel, cobalt, phosphorus, and sodium-based materials. Its core products, ternary precursors and cobalt tetroxide, have maintained the top global shipment volume for many consecutive years, and its lithium iron phosphate materials have also entered the industry's first tier. Sunwoda stated that its subsidiary Sunwoda Power's signing of this agreement with CNGR is conducive to establishing a long-term, stable strategic cooperative relationship, leveraging their respective market and technological advantages, and creating business synergy. Previously, Sunwoda had also taken related cooperative actions, signifying its intention to continue deepening its involvement in the solid-state battery field. On June 12, 2024, Sunwoda signed a strategic cooperation agreement with KAIER to strengthen industrial chain synergy and cooperate on lithium-ion battery business, benefiting the establishment of long-term relationships and Sunwoda's lithium battery sales. On December 12 of the same year, Sunwoda Power signed a Strategic Cooperation Framework Agreement for Solid-State Batteries with XTC, involving cooperation on developing solid-state battery-related materials and exploring industrialization models. Judging from financial data, Sunwoda has continuously increased its R&D investment. From 2022 to the first three quarters of 2025, its R&D expenses were 2.742 billion yuan, 2.711 billion yuan, 3.33 billion yuan, and 3.202 billion yuan respectively, accumulating a total investment of approximately 11.985 billion yuan in less than four years.
Is "Trading Price for Volume" Wrong? Behind the quality controversy lies the inherent contradiction of Sunwoda's "trade price for volume" model. To establish a foothold in the high-investment, high-barrier sectors of power batteries and energy storage, Sunwoda embarked on large-scale capacity expansion in recent years. In 2021, Sunwoda announced multiple capacity expansion projects. According to the plan at that time, Sunwoda's capacity would reach 140 GWh by 2025. As capacity expanded, Sunwoda's shipment volume surged, jumping from 3.95 GWh in the first half of 2022 to 16.08 GWh in the first half of 2025, with its customer list expanding to include mainstream automakers like Li Auto, XPeng, and Leapmotor. As of the end of the third quarter of 2025, the company's construction in progress reached 11.501 billion yuan, an increase of 41.55% year-on-year. According to incomplete statistics, the company has frequently made moves in locations like Huizhou, Nanchang, Yichang, and Yiwu, with total planned capacity exceeding 220 GWh and proposed total investment exceeding 70 billion yuan. In 2022 alone, the company successively launched several multi-billion-yuan projects in Zhuhai, Shifang, Sichuan, and Yiwu, and also jointly built a 30 GWh production line with Dongfeng Group, with an expansion pace that drew significant attention. Simultaneously, overseas markets were incorporated into its blueprint. In 2023, the company invested nearly 2 billion yuan to start construction of its first European battery factory in Hungary; in 2024, it accelerated the advancement of its lithium battery project in Vietnam and its power battery factory in Thailand. In the same year, its overseas revenue reached 23.431 billion yuan, accounting for a high 41.83% of its total revenue. The company is attempting to find new growth engines through "going global." In October 2025, Sunwoda announced plans to invest no more than 481 million USD to build the second phase of a green energy lithium battery factory in Thailand, with a total planned capacity of 17.4 GWh. This is seen as a key move to perfect its strategic foothold in the Southeast Asian market and respond to the growth in global demand for new energy vehicles. However, scale expansion has not brought corresponding profit improvements. As a second-tier manufacturer, Sunwoda has long relied on low-price strategies for competition, resulting in persistently low gross profit margins for its power battery business. To seize market share, Sunwoda has long adopted low-price competition tactics, and its power battery gross margin has continued to decline. In the first half of 2025, its gross margin was only 9.77%, down 1.89 percentage points year-on-year, far below the level of leading industry players. Rapid expansion has placed heavy financial pressure on Sunwoda. As of the end of September 2025, the company's asset-liability ratio was as high as 67.62%, with total liabilities of approximately 67.9 billion yuan. In terms of debt structure, short-term borrowings surged to approximately 13.77 billion yuan, a nearly 60% year-on-year increase; long-term borrowings were about 9.9 billion yuan, up nearly 40% year-on-year, indicating significant debt repayment pressure. Although the company had ample cash on hand, totaling 21.503 billion yuan, accounts receivable climbed to 17.067 billion yuan, while accounts payable stood at 19.496 billion yuan.
To alleviate funding pressure, in April 2025, Sunwoda announced the suspension of two major projects with a total investment of approximately 14 billion yuan—the Ningxiang Smart Hardware Base and a 30 GWh power battery project. Sunwoda stated that due to changes in the market environment and customer situation, the projects had not yet made substantial progress. To effectively control external investment risks, rationally allocate funds to focus on its main business, and effectively safeguard the interests of the company and its investors, after prudent study, it decided to terminate investment in these projects. To ease funding pressure and support business expansion, Sunwoda has continuously sought capital market assistance in recent years. In July 2023, the company announced plans to spin off its subsidiary Sunwoda Power for a listing on the ChiNext board to broaden financing channels and cope with industry competition, but no substantial progress has been seen since then. In July 2025, the company turned to promoting a listing on the Main Board of the Hong Kong Stock Exchange, aiming to raise funds for the construction of overseas bases and global market expansion. "A Hong Kong listing can provide the company with more financing channels and also help the company accelerate expansion, acquire other companies, or invest in new technologies and products to achieve its business objectives," said Bai Wenxi, Vice Chairman of the China Enterprise Capital Union. Lin Xianping believes that for Sunwoda, scaling back its focus to niche markets (such as energy storage, low-speed electric vehicles, etc.) might alleviate short-term pressure. However, technological iteration in the main power battery赛道 is rapid, and a complete exit might mean missing long-term opportunities. More crucially, by increasing R&D investment, introducing stricter quality control systems (such as automotive-grade standard certification), and making quality data transparent, the company can gradually rebuild market trust. Sunwoda's transition from a leader in the consumer electronics field to a supplier for new energy vehicle batteries can be described as a high-risk strategic leap. However, after rapidly opening up the market with its "trade price for volume" strategy, the company's relationship with its important customer Geely Group moved from a "honeymoon period" to a breakdown. This not only exposed the hidden dangers of its aggressive expansion strategy but also sparked deep reflection on the development models of second-tier battery manufacturers. What do you think Sunwoda should do to regain the trust of customers and the market? Leave your comments below!
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