Breaking News: Xingwangda Power, a subsidiary of Xingwangda, is being sued by Geely’s subsidiary Weirui Electric for a whopping claim amount of 2.314 billion yuan over a battery quality dispute. This amount is nearly equivalent to Xingwangda’s non-recurring net profit over the past two years combined, sparking widespread attention in the capital market.
On the evening of December 26th, Xingwangda released a statement announcing that its subsidiary, Xingwangda Power Technology Co., Ltd., had received a civil complaint and related lawsuit documents on December 25th.
The plaintiff, Weirui Electric Vehicle Technology (Ningbo) Co., Ltd., a company under Geely, alleges that from June 2021 to December 2023, Xingwangda Power delivered battery cells with quality issues that led to significant losses.
Weirui Electric is demanding compensation of 2.314 billion yuan, along with interest at the loan market quoted rate, and bearing all appraisal fees, lawyer fees, and other litigation costs. According to business records, Weirui Electric was established in 2017, with Geely’s two major shareholders holding controlling stakes, with 51% owned by Jidu Auto and 49% by Geely Auto.
This lawsuit’s amount has a significant impact on Xingwangda. According to reports from the “Daily Economic News,” Xingwangda achieved a non-recurring net profit of 1.605 billion yuan in 2024, and 1.015 billion yuan in the first three quarters of this year, totaling about 2.62 billion yuan, which just covers the aforementioned claim amount.
The collaboration between Xingwangda Power and Weirui Electric began in April 2021 when Xingwangda Power secured the development intention of battery cells for Weirui Electric’s PMA platform project, becoming its designated supplier. Geely Auto’s PMA platform is a pure electric modular architecture jointly developed by Geely and Volvo, applied to multiple brands including Jidu, Smart, Volvo, and Geely Geometry.
As sales of the Jidu 001 vehicle model equipped with Xingwangda cells increased, issues gradually surfaced. According to reports from “First Financial,” more than 70,000 units of the Jidu 001 were sold in 2022, with the WE86 version accounting for over 60%. Subsequently, some Jidu 001 WE86 owners began to report issues such as slow charging speed and inaccurate battery level readings.
In December 2024, Jidu Auto issued a notice stating that during special battery health monitoring activities, some Jidu 001 WE86 vehicles with high mileage were found to have intermittent slow charging speed and abnormal battery capacity degradation curves. Although not meeting the battery warranty replacement standards, Jidu decided to provide affected users with free replacement of new battery packs and proactively contacted all Jidu 001 WE86 owners for battery checks.
In the first half of this year, some owners reported having had their batteries replaced, with the new battery packs labeled with “CATL” (CATL, Contemporary Amperex Technology Co. Limited), sparking speculation in the market about supplier replacements.
This lawsuit also reflects the operational pressure that Xingwangda Power has faced in recent years. Tianyancha data shows that Xingwangda holds a 40.21% stake in Xingwangda Power and controls the company.
According to the “China Fund News,” Xingwangda Power’s operating income in 2023 and 2024 was 11.12 billion yuan and 15.726 billion yuan, with net losses of 1.561 billion yuan and 1.873 billion yuan, respectively, for two consecutive years.
It is worth noting that Xingwangda had planned to spin off Xingwangda Power for listing on the Shenzhen Stock Exchange’s ChiNext board. The split-off plan released in July 2023 showed that Xingwangda Power’s revenue had grown from less than 500 million yuan in 2020 to nearly 13 billion yuan in 2022, but losses continued to expand. As of now, there has been no substantive progress on this split listing plan.
Xingwangda stated in the announcement that the current lawsuit has not yet been scheduled for trial, and the uncertain outcome of the subsequent judgment makes it temporarily unable to assess its impact on the company’s profit. The company is actively seeking reasonable solutions and strengthening communication and negotiation with relevant parties.