I. Rapid Settlement: 2.3 Billion RMB Dispute Resolved in Two Months
Sunwoda Electronic Co., Ltd. announced on February 6, 2026, that its subsidiary, Sunwoda Mobility Technology, has reached a settlement with Viridi E-Mobility Technology. The resolution concludes a major litigation involving a 2.314 billion RMB claim filed by Viridi in December 2025 regarding battery quality issues. The settlement was reached within just two months of the initial lawsuit, with Viridi agreeing to withdraw the case from the Ningbo Intermediate People’s Court.
II. Core Terms: Proportional Cost Sharing and Asset Ownership
According to the agreement, both parties will verify the actual costs associated with replacing power battery packs instead of following the original litigation amount. These verified costs will be shared between Sunwoda Mobility and Viridi according to an agreed-upon ratio determined by both companies. Notably, the ownership of all battery packs involved in the replacement process after the incident will be transferred to Sunwoda Mobility.
III. Payment Details: Initial 608 Million RMB Payment and 5-Year Schedule
Sunwoda Mobility is required to pay a remaining balance of 608 million RMB for costs incurred up to the end of 2025. Any future costs arising after January 1, 2026, will continue to be shared between the two parties based on the proportions defined in the settlement agreement. The total settlement amount will be paid over a five-year period, with 60% due in 2026 and reaching full payment by 2030.
IV. Financial Impact: Estimated 500 to 800 Million RMB Hit to 2025 Profits
Sunwoda estimates this settlement will reduce its 2025 attributable net profit by approximately 500 million to 800 million RMB. This assessment includes provisions for quality warranties, the value of retrieved battery packs, and anticipated future expenses. The final impact on the company’s financial statements will be determined after audit confirmation by accountants in the annual report.
V. Industry Background: Zeekr 001 Battery Replacements and Market Stability
Viridi is a subsidiary of Geely Holding Group, with the Zeekr brand holding a 51% stake and Geely Auto holding 49%. The dispute follows reports regarding battery degradation and reduced charging speeds in Zeekr 001 WE86 models using Sunwoda cells. Sunwoda, ranked sixth in the industry with a 3.17% market share in 2025, aimed to resolve the dispute to minimize long-term impact on its brand.
VI. Conclusion: Cooperation on Recalls and Consumer Protection
The agreement specifies that both parties will cooperate with vehicle manufacturers to fulfill legal recall obligations if required by authorities. This cooperation is intended to ensure the protection of consumer rights through active measures and proportional cost-sharing. The settlement has been signed and is awaiting final approval from both companies’ relevant internal governing bodies.
