Geely has reached a settlement with Xinwangda.

Author | Zhou Zhiyu

At the end of last year, Geely Holdings’ Wayray Electric filed a lawsuit against Xinwangda, claiming damages of up to 2.3 billion yuan due to battery cell quality disputes. This amount broke the record for claims in China’s battery supply chain.

The game finally saw a turning point recently. On February 6, Wall Street Insights learned that Xinwangda’s subsidiary, Xinwangda Power, had reached a settlement with Wayray Electric under Geely. The 2.3 billion yuan compensation lawsuit will officially enter the withdrawal process. The amount Xinwangda needs to pay has been reduced from 2.3 billion yuan to approximately 608 million yuan.

At the end of last year, Wayray Electric, a subsidiary of Geely, accused Xinwangda Power of supplying battery cells with serious quality defects.

The focus was on the once-star product—the Zeekr 001 WE86 version. This pure electric coupe, built on the SEA Harbin architecture platform, was once a pioneer in Zeekr’s market conquest. However, after 2024, this model experienced significant declines in charging speed and abnormal battery pack degradation.

Wayray Electric believes the fault stems from the battery cells provided by the other party, which deviated from the agreed-upon process and material standards, leading Zeekr to need to replace battery packs for tens of thousands of owners free of charge. The costs and brand damage from this must be borne by the battery cell manufacturer.

Xinwangda’s defense is that it has conducted extensive experiments on the same specifications of battery cells, and products supplied to other clients show no issues.

If the lawsuit goes to the end, it would be unhelpful for both sides. The 2.3 billion yuan compensation is equivalent to Xinwangda’s net profit over two years. Wall Street Insights also learned from industry insiders that after Wayray Electric’s claim, some OEMs that purchased Xinwangda products are now in a wait-and-see stance. For Geely, prolonged court battles do not benefit the brand image.

This led to the current settlement. According to the latest agreement, both parties agree to recognize the actual costs incurred for replacing battery packs and share them proportionally. For costs already incurred before the end of 2025, Xinwangda will pay the remaining 608 million yuan after deducting amounts already paid. This payment will not be made all at once but settled over five years: 60% in 2026, then 10% annually until 2030.

All old battery packs replaced will belong to Xinwangda, leaving space for subsequent reuse or material recycling. Ultimately, Xinwangda expects to record a loss of 500 million to 800 million yuan in its 2025 financial statements after the settlement.

An industry analyst pointed out that whether from the amount involved in this lawsuit or the final outcome, this is a case worth paying attention to in the development of China’s automotive supply chain.

In the past, quality disputes between OEMs and suppliers were usually resolved privately. An industry insider said, “Before, it was either negotiated over drinks or deducted from the next model’s price. This lack of transparency, while saving face, hurt the industry’s integrity.”

Due to the lack of public precedents and responsibility standards, automakers can fall into the same quality pitfalls, paying expensive tuition repeatedly.

By choosing to file a public lawsuit, Geely made the issue transparent. This also indicates that competition in China’s new energy vehicle sector has entered a new phase—where hiding quality flaws behind relationships is no longer acceptable.

The core data of vehicle operation has always been controlled by the OEM, often serving as a shield to “pass the buck.” But Geely’s willingness to bring these data to court and professional appraisal agencies breaks the cycle of mutual blame between suppliers and automakers, setting a transparency benchmark for the industry.

This public confrontation has prompted all participants—whether large battery manufacturers or core software providers—to develop a genuine respect for quality. It shows everyone that technical specifications in contracts are not just for legal teams but are a lifeline that truly determines a company’s survival.

The settlement between Geely and Xinwangda marks a key step toward a more regulated and healthier Chinese new energy vehicle industry chain. The deeper significance of this event is that it promotes the establishment of a clearer and fairer responsibility-sharing mechanism. It tells the industry: problems are not scary; what’s frightening is the inability to assign responsibility. Through this collision of right and wrong, China’s automotive supply chain is bidding farewell to the wild growth of the past and moving toward rule of law and standardized maturity.

In the future, when people look back at this 2.3 billion yuan lawsuit, they may realize it was not just an internal conflict among brands, but an inevitable pain point in China’s path toward high-quality development of new energy vehicles. This open, transparent, and legal approach is the necessary route for China’s automotive industry to align with global standards and even export “Chinese standards.”

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