BEIJING, Feb 7, 2026, 03:20 (GMT+8)
- Sunwoda anticipates a 500–800 million yuan reduction in net profit for 2025 due to the settlement
- Geely’s battery division Vremt demanded 2.31 billion yuan, citing faulty battery cells
- Volvo has issued a recall for EX30 models across multiple markets due to a potential overheating hazard
Sunwoda Electronic’s subsidiary has settled a lawsuit with Vremt, the battery division of automaker Geely, over claims of defective EV battery cells. The Chinese lithium-ion battery maker now expects to cut its 2025 net profit by 500 million to 800 million yuan ($72 million to $115 million), down from the 2.31 billion yuan ($332 million) claim it revealed last December. 1
The settlement is crucial since battery faults are evolving into legal and financial headaches throughout the EV supply chain, beyond just warranty claims. When cells malfunction, automakers frequently need to swap out entire packs — the complete unit inside the vehicle — and costs can fall on either party involved in the contract.
Volvo, under Geely Holding, plans to recall its EX30 models in Australia, the U.S., and Canada due to overheating risks that could potentially cause battery fires. According to the U.S. National Highway Traffic Safety Administration, the affected vehicles use batteries from Sunwoda Power Battery Company. 2
Vremt, formerly Viridi E-Mobility Technology, claimed in filings that the battery cells provided by Sunwoda’s EV battery arm from 2021 to 2023 were defective. A battery cell serves as the fundamental electrochemical unit, with multiple cells combined into a pack for vehicle use.
According to Sunwoda’s exchange announcement, cited by CNEVPost, both parties will calculate the cost of replacing power battery packs based on actual expenses and split the costs proportionally. Vremt will drop the lawsuit once the settlement is finalized, and the processed battery packs will remain Sunwoda’s property. 3
Geely refused to comment on the settlement or its potential effects. Sunwoda has not revealed how many vehicles are involved, nor confirmed if any Geely-branded models will be recalled.
Sunwoda didn’t share details on how much profit might be hit or how quickly the replacement work will progress. The 500 million to 800 million yuan estimate offers investors a rough idea of the potential costs, but no clear final figure.
Sunwoda holds a smaller slice of China’s EV battery market compared to the leaders. According to the China Automotive Battery Innovation Alliance, Sunwoda’s power battery installations in China reached 24.35 gigawatt-hours in 2025, capturing a 3.17% share. CATL dominated with 43.42%, followed by BYD at 21.58%.
Founded in 2013, Vremt is tied to Geely Holding Group, according to CNEVPost. The company falls under the Zeekr Group’s control and provides batteries for certain Zeekr models. This situation underscores the complexity of a dispute involving a supplier and customer operating within the same corporate umbrella.
The biggest question is the final replacement bill. If more packs need swapping than anticipated, or if regulators and customers demand broader measures over overheating worries, costs might climb and the settlement numbers could get messier.
CNEVPost reported that the lawsuit emerged while Sunwoda was pursuing a Hong Kong listing. Their July 2025 application lapsed after they missed the six-month deadline, prompting a resubmission last month. Settling the case clears a major cloud, but the earnings impact still shows up in the figures.
Neither party has revealed what triggered the alleged defects or specified which Geely models included the problematic cells. The settlement wraps up the legal dispute but leaves most of the technical details under wraps.
