BEIJING, Feb 7, 2026, 03:20 (GMT+8)
- Sunwoda expects a 500–800 million yuan hit to 2025 net profit from the settlement
- Geely’s battery unit Vremt had sought 2.31 billion yuan over alleged defective battery cells
- Volvo has started recalling EX30 models in several markets citing overheating risk
A subsidiary of Chinese lithium-ion battery maker Sunwoda Electronic has reached a settlement with Vremt, the battery unit of automaker Geely, to end a lawsuit over allegedly defective electric-vehicle battery cells. Sunwoda said the deal would reduce its 2025 net profit by 500 million to 800 million yuan ($72 million to $115 million), against a 2.31 billion yuan ($332 million) claim disclosed in December. Reuters
The settlement matters now because battery faults are turning into legal and financial risk across the EV supply chain, not just warranty work. When cells fail, automakers often have to replace entire packs — the assembled unit installed in the car — and the bill can land on both sides of a contract.
Volvo, owned by Geely Holding, has issued plans to recall its EX30 in markets including Australia, the United States and Canada, citing overheating that could, in a worst-case scenario, lead to a battery fire. The U.S. National Highway Traffic Safety Administration said the recalled vehicles were equipped with batteries from Sunwoda Power Battery Company. Channelnewsasia
Vremt, previously known as Viridi E-Mobility Technology, alleged that battery cells supplied by Sunwoda’s EV battery subsidiary between 2021 and 2023 contained defects, filings showed. A battery cell is the basic electrochemical unit; many cells are grouped into a pack for use in a vehicle.
Under the settlement, the two sides will determine the cost of replacing power battery packs based on actual expenses and share the burden proportionally, CNEVPost reported, citing Sunwoda’s exchange announcement. Vremt will withdraw the lawsuit once the settlement agreement takes effect, and processed battery packs will remain the property of Sunwoda. Cnevpost
Geely declined to comment on the settlement and its impact. Sunwoda did not disclose how many vehicles were affected or whether any Geely-branded models would face a recall.
Sunwoda also did not provide a breakdown of the expected profit impact or the pace of the replacement work. The estimate — 500 million to 800 million yuan — gives investors an early view of the cost range, but not the endpoint.
Sunwoda is a smaller player in China’s EV battery market than the top suppliers. Data from the China Automotive Battery Innovation Alliance showed Sunwoda’s power battery installations in China totalled 24.35 gigawatt-hours in 2025, giving it a 3.17% share, while CATL led with 43.42% and BYD ranked second with 21.58%.
Vremt was founded in 2013 and is affiliated with Geely Holding Group, CNEVPost reported. It is controlled by the Zeekr Group and supplies batteries for some Zeekr models, highlighting how the dispute cut through an ecosystem where supplier and customer can sit under the same corporate umbrella.
The key uncertainty is the final replacement bill. If more packs require swapping than expected, or if regulators and customers push for wider action after overheating concerns, costs could rise and the settlement math could look less tidy.
CNEVPost said the lawsuit had come as Sunwoda worked on a planned Hong Kong listing, after a July 2025 application expired when it did not list within six months and the company resubmitted materials last month. Settling removes one overhang, but the earnings hit still lands in the numbers.
Neither side has publicly detailed what caused the alleged defects, or which Geely models used the affected cells. For now, the settlement closes a legal chapter while leaving the engineering story mostly off the page.
