ZEEKR subsidiary VREMT has sued Sunwoda Power over battery quality issues, claiming 2.314 billion yuan in compensation. Facing supply chain challenges alongside favorable policies, ZEEKR has set a 2026 sales target representing 34% growth.
On December 26, 2025, Sunwoda (300207.SZ) announced that its subsidiary, Sunwoda Power Technology Co., Ltd., had received a court summons. VREMT Electric Vehicle Technology (Ningbo) Co., Ltd. is suing Sunwoda Power, seeking 2.314 billion yuan in compensation for losses attributed to quality problems with battery cells.
Public information indicates that Sunwoda Power is currently undergoing IPO辅导, while Sunwoda is advancing its Hong Kong IPO. ZEEKR, affected by the battery cell quality issues, saw its 2025 sales growth rate lag behind other Geely Group brands like Geely Auto and Lynk & Co. For 2026, ZEEKR's sales target anticipates a 34% year-on-year increase.
Sunwoda's subsidiary is being sued over battery quality. In its announcement, Sunwoda stated that the plaintiff filed the lawsuit on the grounds that the battery cells delivered by the defendant between June 2021 and December 2023 had quality issues, causing losses. The plaintiff is demanding the defendant fulfill its obligation to pay compensation and other amounts, with the total claim reaching 2.314 billion yuan.
The plaintiff is VREMT Technology, a controlling subsidiary of Geely Auto's (0175.HK) premium brand, ZEEKR. Its business scope covers battery manufacturing, electric motor manufacturing, and automotive parts manufacturing. According to Qichacha, ZEEKR holds a 51% stake in VREMT Technology, while Geely Group holds 49%. The defendant is Sunwoda Power, a business entity under listed company Sunwoda focused on automotive power battery operations, primarily involved in the production of lithium-ion batteries, EV battery modules, power battery systems, and new energy vehicle charging equipment and accessories.
The core basis for this lawsuit stems from widespread complaints from owners of the ZEEKR 001 model equipped with this batch of battery cells. Owners reported issues such as slower charging speeds, reduced range, and inaccurate battery level readings. On the Black Cat Complaints platform, a user posted on November 26, 2024, complaining about "ZEEKR 001 WE 86 false advertising, 86 kWh battery actually has a usable capacity of 76 kWh." The user, who purchased a 2022 ZEEKR 001 WE 86 in September 2022, stated that "charging to 100% and driving until no power is shown consumes only 76 kWh. Charging time on an official fast charger increased from about 1 hour to over 2 hours, with charging power halved. A ZEEKR service center inspection showed no battery abnormalities, but regarding the locked capacity and power issue, the service center replied that they could not access backend data. Requests for the full battery health report were refused on grounds of manufacturer confidentiality." The user demanded written disclosure of the full battery health report, an apology, a third-party battery test report, and a resolution to the locked capacity and power issues. Another user complained in November 2024 about "unresolved ZEEKR 001 power battery degradation," citing severe range shrinkage and demanding prompt handling, including replacement or repair.
In response, ZEEKR launched a "Winter Care Campaign" in December 2024, offering free battery health checks for all ZEEKR 001 WE 86 owners. It promised to replace the entire battery pack free of charge if abnormalities or other issues affecting user experience were detected. The 2.314 billion yuan claim sought by VREMT is calculated based on the material, labor costs of this large-scale after-sales replacement, and derivative losses such as brand reputation damage.
From joint venture success to legal dispute. Prior to this lawsuit, the cooperation between Geely and Sunwoda was seen as a model of industrial chain synergy. In 2021, they established the joint venture Shandong Geely Sunwoda Power Battery Co., Ltd. (Geely holds 70%), with Sunwoda Chairman Wang Wei personally serving as Vice Chairman of the JV, highlighting strategic importance. In 2023, Sunwoda even received Geely's "Best Product Innovation Award," underscoring the closeness and recognition during the early cooperation phase.
Public information shows Sunwoda Power is currently in the上市辅导期. Its consistently loss-making financial data has drawn regulatory attention, with its上市辅导机构 requiring it to "track and督促整改" internal issues. Audit reports indicate Sunwoda Power's revenue was 111.2 billion yuan in 2023, with a net loss of 1.56 billion yuan; revenue was 157.3 billion yuan in 2024, with a net loss of 1.87 billion yuan; its 2025 interim report shows H1 revenue of 74 billion yuan and a net loss of 880 million yuan.
Sunwoda Power has undergone multiple rounds of financing since 2021, attracting external shareholders including IDG, Shenzhen Capital Group, NIO, XPENG, GAC Capital, Infinity Group, and Dongfeng Motor, which include several major downstream customers. The emergence of this 2.314 billion yuan lawsuit not only casts a shadow over Sunwoda Power's path to capitalization but also increases uncertainty for industrial and financial investors seeking to realize returns.
Previously, many analysts viewed the cooperation with Geely as a positive factor when forecasting Sunwoda's future performance. For instance, Soochow Securities' team led by Zeng Duohong noted in a November report this year, "Looking ahead to 2026, incremental contributions from core clients Li Auto, Dongfeng, and Geely are promising," projecting Sunwoda's power battery business could achieve 50% year-on-year growth in 2026. Coupled with expectations for its energy storage business to turn profitable, they raised their 2026/2027 net profit attributable to parent company forecasts for Sunwoda from 2.5/3.0 billion yuan to 3.0/4.11 billion yuan, corresponding to a target price of 46 yuan, implying 76% upside from the then price of 26.1 yuan.
Now, with VREMT suing Sunwoda Power, sell-side optimistic forecasts for Sunwoda's future profits may require reassessment. The case has been accepted by the court but has not yet formally gone to trial.
ZEEKR's 2026 sales target requires 34% growth. ZEEKR, the mid-to-high-end new energy brand under Geely affected by this batch of battery cells, successfully listed on the U.S. stock market in May 2024, raising $440 million. ZEEKR CEO An Conghui stated at the time: "This opens a third path for ZEEKR in the global new energy transition and highlights ZEEKR's long-term value in global capital markets. ZEEKR will use the listing as an opportunity to further upgrade its governance structure and achieve globally compliant, transparent, and sustainable development." However, by late December 2025, Geely Auto announced the completion of the privatization and merger transaction for ZEEKR, which was delisted from the U.S. market.
According to Geely's latest disclosed 2025 sales data, the Group's main brand Geely (including Galaxy) achieved total sales of nearly 2.45 million vehicles in 2025, a 47% increase from 1.67 million in 2024. Specifically, Galaxy sold 1.236 million vehicles for the full year, surging 150% year-on-year; Lynk & Co sold 350,000 vehicles, up 23% from 285,000 in 2024; ZEEKR had the lowest growth rate, with 2025 sales of 224,000 vehicles representing only a 1% increase over 2024. Geely's initial 2025 sales target for ZEEKR was 320,000 vehicles, but the actual achievement rate was only about 70%, falling short by nearly 100,000 vehicles.
Geely previously had numerous sub-brands, which were effective during market expansion. However, intensified competition and the demands of new energy and intelligent transformation requiring heavy R&D investment have led Geely to accelerate resource integration since 2024. Geely stated it would fully synergize technology, product, supply chain, manufacturing, marketing, and international resources to continuously release the synergistic integration effects of "One Geely."
The effects of integration are already reflected in performance. According to Wind data, for the first three quarters of 2025, Geely Auto's revenue was 239.5 billion yuan, up 42.8% year-on-year; net profit was 13.11 billion yuan, up 0.44% year-on-year; market share was 10.2%, up 28.1% year-on-year. Third-quarter revenue was 89.2 billion yuan, up 47.72% year-on-year; net profit was 3.82 billion yuan, up 55.6% year-on-year. In terms of stock performance, Geely Auto's share price has risen steadily since 2024, with a 23% gain in 2025, ranking high among automakers. Wind data shows that among A/H-share passenger car manufacturers, XPENG Inc.-W (9868.HK) led with a 70% gain for 2025. Leapmotor (9863.HK) followed with a 49.6% gain, JAC Motors (600418.SH) rose 32%, and Geely Auto ranked fourth.
For the 2026 sales target, Geely expects 3.45 million vehicles, a 14% increase over 2025 sales. Within this, ZEEKR's target for 2026 is 300,000 vehicles, representing a growth target of 34% compared to its actual 2025 sales.
It is worth noting that the newly announced 2026 automotive subsidy policy is favorable for ZEEKR. Recently, the National Development and Reform Commission and the Ministry of Finance issued a notice on the policy for large-scale equipment updates and consumer goods trade-ins in 2026, with adjustments to subsidy methods. Analyst Li Junyang from Founder Securities believes that under the new subsidy method, "subsidies for low-end models are reduced, while the policy guides consumption towards mid-to-high-end models." To receive the full subsidy, the price of a new energy vehicle must be no less than 187,500 yuan. This price threshold is viewed as positive for ZEEKR, which is positioned in the mid-to-high-end electric vehicle segment.
(Mentioned stocks are for analysis purposes only and do not constitute investment advice.)
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