Sunwoda expects the settlement to impact its net profit attributable to shareholders in 2025 by RMB 500–800 million ($72–115 million).
On February 6, Sunwoda announced that its subsidiary, Sunwoda Electric Vehicle Battery Co., Ltd., has reached a final settlement with VREMT Energy Technology (Ningbo) Co., Ltd., a unit under Geely Holding Group, over a previously disclosed sales contract dispute.
VREMT is a core supplier of electric powertrain systems within the Geely ecosystem, with major customers including Zeekr, Volvo, and smart.
Under the settlement agreement, VREMT will withdraw its lawsuit after the agreement takes effect, bringing an end to the battery supply dispute that had lasted for several months.
The dispute stemmed from partial performance issues during the execution of power battery sales contracts between the two parties.
In December last year, VREMT filed a lawsuit against Sunwoda’s battery subsidiary, citing defects in certain battery cells delivered between June 2021 and December 2023, and sought compensation of up to RMB 23 billion ($333 million).
According to the final settlement terms disclosed, the two sides agreed that costs related to the replacement of battery packs will be recognized based on actual costs incurred.
The amounts will be confirmed after reconciliation by both parties, and the actual costs will be shared proportionally.
All battery packs involved after the resolution of the incident will be owned by Sunwoda.
Based on the joint reconciliation results and after deducting amounts already borne by Sunwoda, the company is still required to pay VREMT RMB 608 million ($87.6 million). This payment will be settled in installments over a five-year period.
Notably, battery quality issues had previously surfaced in the end market. For example, the 2022 smart #1 used battery cells supplied by VREMT and delivered by Sunwoda.
Some vehicle owners were notified of battery replacements, with manufacturers typically addressing the issue by extending or offering additional battery warranty benefits.
The announcement also noted that Sunwoda expects the settlement to impact its net profit attributable to shareholders in 2025 by RMB 500–800 million ($72–115 million).
Discover more from ChinaEVHome
Subscribe to get the latest posts sent to your email.
