Analysis of Sunwoda's 2.3 Billion Yuan Claim by Geely Zeekr and Its Impact on Hong Kong IPO

According to public information, on December 26, 2025, Sunwoda Electronic Co., Ltd. (300207.SZ) disclosed an announcement stating that its subsidiary, Sunwoda Power Technology Co., Ltd., was sued by Weirui Electric Vehicle Technology (Ningbo) Co., Ltd. with an amount involved of up to 2.314 billion yuan[1]. This case is called the ‘first case’ of an original equipment manufacturer (OEM) suing a battery supplier in China’s new energy vehicle sector by the industry[2].

Weirui Electric Vehicle Technology (Ningbo) Co., Ltd. was founded in 2013, originally the global new energy R&D department of Volvo, and initially directly affiliated with Geely Holding Group. In July 2021, to strengthen Zeekr’s technical competitiveness in the new energy vehicle sector, Geely Holding transferred 51% of Weirui Electric’s shares to Zeekr, making it a subsidiary controlled by Zeekr[1]. Therefore, this litigation is essentially a quality claim lawsuit initiated by the Geely Zeekr system against Sunwoda.

According to litigation materials, Weirui claims that Sunwoda Power delivered cells with quality issues between June 2021 and December 2023, causing losses[1]. As the most basic unit of a power battery pack, the performance, consistency, and reliability of cells directly determine the safety, range, and lifespan of the battery pack and even the entire vehicle. When a batch of cells has differences in voltage, capacity, or internal resistance, local overload is likely to occur during charging, leading to thermal runaway and fire; during discharge, it may cause sudden range drop or power interruption[2].

The claim amount of 2.314 billion yuan has a significant financial impact. According to industry analysis, this amount is equivalent to nearly 90% of Sunwoda’s total net profit in 2023 and 2024[2]. From Sunwoda’s latest financial data, the company’s current market value is 48.7 billion USD (approximately 340 billion yuan), but its recent performance is under pressure. The latest quarterly report shows an EPS of $0.30, lower than the market expectation of $0.35, and revenue of $1.655 billion, slightly lower than the expected $1.732 billion[0].

The case has not yet been heard, and its specific direction is still full of variables. From the perspective of legal practice, the core of such product quality disputes lies in the burden of proof. Weirui needs to provide sufficient evidence to prove that the cells delivered by Sunwoda Power have quality defects that do not meet the agreement or industry standards, and these defects directly caused the specific loss of 2.314 billion yuan[3]. This involves a large number of professional materials such as technical data, third-party testing reports, and loss audit calculations, making the proof process complex and time-consuming.

According to public information, Sunwoda is actively promoting its Hong Kong listing plan and has submitted an application to the Hong Kong Stock Exchange, which is expected to become the third lithium battery enterprise to achieve ‘A+H’ dual listing in 2025[4]. Encountering a major lawsuit at this critical stage may have multiple impacts on the IPO process.

According to securities regulations, major pending litigation is an important concern in IPO reviews. The claim amount of 2.314 billion yuan is huge and may have a significant impact on the company’s financial status. Sunwoda clearly stated in the announcement that ‘it cannot assess the impact of this litigation on the company’s current or subsequent profits’[2]. This uncertainty may arouse concerns among regulators and investors.

From the secondary market performance, Sunwoda’s stock price dropped sharply after the litigation news was disclosed, with a single-day drop of 11.39% and a five-day cumulative drop of 11.04%[0]. The market reaction shows that investors are worried about the potential financial risks and business impacts of the litigation. This stock price fluctuation may affect the IPO pricing and investor subscription意愿.

When reviewing Sunwoda’s IPO application, the Hong Kong Stock Exchange is expected to focus on the following aspects: detailed explanation of the litigation, assessment of the specific impact on the company’s operations and finance, adequacy of risk disclosure, and the company’s response measures and plans. Sunwoda needs to provide detailed explanation materials to eliminate regulatory concerns.

This litigation occurs against the background of deep reshuffling in China’s power battery industry. As a leading domestic power battery enterprise, Sunwoda competes fiercely with giants such as CATL and BYD. Against the backdrop of overall industry pressure, this litigation may have an adverse impact on Sunwoda’s market reputation and customer relationships.

It is worth noting that starting from 2024, Zeekr’s product iteration logic has undergone obvious changes—starting from the new Zeekr 001 model in 2024, Zeekr directly eliminated Sunwoda’s cells and upgraded the power battery of the entry-level model to CATL’s lithium iron phosphate battery[2]. This change may be related to the quality disputes in the subsequent litigation.

The cooperation between Geely and Sunwoda began in April 2021, when the two parties also established a joint venture company ‘Shandong Geely Sunwoda Power Battery Co., Ltd.’[2]. However, from strategic cooperation to litigation, it reflects the complexity of the relationship between OEMs and battery suppliers in the new energy vehicle supply chain. This case may prompt vehicle enterprises to accelerate the vertical integration and diversified layout of the battery supply chain.

Regardless of the final judgment result, this litigation has left a deep mark in the development history of China’s automotive battery industry[3]. From a legal perspective, Weirui needs to fully prove the causal relationship between the cell quality defects and the losses; Sunwoda can defend itself on the grounds that the product quality meets the contract agreement, the loss calculation method is unreasonable, or the loss is related to Weirui’s own design and assembly process[3].

For Geely and Sunwoda, the most ideal result may be to reach a settlement under the legal framework, resolve conflicts through technical rectification, compensation, or new cooperation agreements, and avoid a lose-lose situation[3]. After all, in the long track of electric vehicles, stable supply chain relationships are still indispensable competitive advantages.

Comprehensive analysis shows that the impact of this litigation on Sunwoda’s Hong Kong IPO mainly includes the following aspects:

: The listing review process may be extended, regulators may require the company to provide more information disclosure about litigation risks, and the IPO pricing may face certain pressure.

: If the litigation can be properly resolved (such as reaching a settlement or winning the case), the impact on the IPO will be temporary; if the litigation loses and needs to bear huge compensation, it may have a substantial impact on the company’s financial status and business development.

Sunwoda’s 2.3 billion yuan claim by Geely Zeekr is a major challenge in its development process, which poses uncertainty to the Hong Kong IPO process. The cell quality issues involved in the litigation date back to the period from 2021 to 2023, which was the rapid expansion period of Sunwoda’s power battery business, reflecting the potential quality control risks in high-speed growth.

From an investment perspective, it is recommended to pay attention to the following subsequent developments: the specific time node and dispute focus of the litigation hearing, the situation of evidence and cross-examination between the two parties, and whether a settlement is possible. At the same time, it is necessary to evaluate the actual impact on the company’s cash flow and business operations if the litigation loses. At the IPO review level, the regulator’s attention to major pending litigation will test Sunwoda’s information disclosure quality and risk response ability.

---

[1] Sohu - “First Case of Automaker Suing Battery Enterprise! Geely-owned Company Sues Sunwoda for 2300 Million Yuan” (https://www.sohu.com/a/969774541_430289)

[2] Electronic Engineering Times China - “Battery Giant Sued by Automaker for Over 2300 Million Yuan!” (https://www.eet-china.com/mp/a463153.html)

[3] Netcom Society - “Battery Dispute Triggers Industry Change: Geely Claims 2300 Million Yuan, How Will Sunwoda Break Through?” (https://www.news18a.com/news/storys_219789.html)

[4] Yahoo Finance - “Power Battery Business Squeezes Sunwoda to Seek Hong Kong Listing for Funding” (https://hk.finance.yahoo.com/news/動力電池業務擠壓欣旺達謀港上市補血-011753551.html)