Sunwoda Sued by Geely for 2.3 Billion Yuan: Impact Analysis on CATL

According to the latest announcement, Sunwoda Power, a subsidiary of Sunwoda (300207.SZ), was sued by Viridi Electric Vehicle Technology (Ningbo) Co., Ltd., a subsidiary of Geely Holding Group, for a claim amount of 2.314 billion yuan. The case stems from quality issues of battery cells delivered between June 2021 and December 2023, involving battery failures of the Zeekr 001 model [1]. Currently, the case has been accepted by the Ningbo Intermediate People’s Court but has not yet been heard.

From the perspective of industrial chain structure, this incident shows a typical ‘layered subcontracting’ characteristic: The battery packs of the Zeekr 001 model (2021 to 2023 versions) are supplied by two vendors, CATL and Viridi, where Viridi purchased battery cells from Sunwoda and independently assembled the Pack battery packs. Starting from the 2024 version, the battery cell supply for this model has all shifted to Times Geely, a joint venture established by Geely and CATL [1].

From the perspective of direct impact, the parties to the lawsuit are Viridi and Sunwoda; CATL is not a direct defendant. As a direct battery supplier for the Zeekr 001, CATL has achieved exclusive supply for the 2024 version, and this supply chain restructuring has instead strengthened its strategic binding relationship with Geely [1]. From the current market pattern, CATL’s market share in China’s power battery market exceeds 40%, significantly leading BYD (about 20%) and other second-tier manufacturers [2].

Notably, this incident occurred at a critical juncture of tight supply and demand in the power battery industry. According to industry data, the top 20 enterprises in terms of capacity utilization rate in the lithium iron phosphate industry are basically operating at full capacity, and the original idle capacity is being restarted one after another [3]. Relying on technological leadership (next-generation technologies such as solid-state batteries and sodium-lithium batteries) and supply chain integration capabilities, CATL continues to consolidate its market position during the industry boom cycle. The company’s expected energy storage cell sales volume in 2025 will increase from 90 GWh in 2024 to over 130 GWh, with a shipment target of 150 GWh [2].

From the perspective of CATL’s core competitive advantages, its technical accumulation and scale effect in the power battery field constitute high entry barriers. The company was the first to propose plug-in hybrid, dual-core, and quad-core solutions; its solid-state battery R&D team has reached a scale of 1,000 people, and its technical maturity leads the industry [2]. In addition, the company has established a deeply bound customer relationship network through 10-year strategic cooperation long-term orders signed with multiple automakers such as GAC, Great Wall, and JAC Group.

Comprehensive analysis shows that the 2.3 billion yuan claim case between Sunwoda and Viridi has limited direct impact on CATL’s supply chain position. This incident more reflects the challenges faced by second-tier battery manufacturers in quality control in the new energy vehicle supply chain, as well as the industry trend of leading enterprises strengthening supply chain control through joint ventures and long-term strategic cooperation. From a long-term perspective, CATL’s leading position in power batteries is difficult to撼动 in the short term, relying on technological leadership, scale effect, and customer stickiness.

---

[1] Tencent Auto - “Geely Sues Sunwoda for 2.314 Billion Yuan Over Zeekr 001 Battery Cell Quality Issues” (https://news.qq.com/rain/a/20251226A08FJC00)
[2] Sina Finance - “Reasons Why CATL Will Continue to Be Strong in the Future” (https://finance.sina.com.cn/stock/relnews/cn/2025-12-23/doc-inhcvfae0519676.shtml)
[3] Eastmoney.com - “CATL’s Batteries Snatched by Automakers, Lithium Prices Surge 50%, Chairman Signs 10-Year Long-Term Orders” (https://caifuhao.eastmoney.com/news/20251219142430013792960)