With monthly sales exceeding 50,000 units, Li Auto has firmly secured its position as the leader among China’s new energy vehicle startups. This rapid growth has also spotlighted its supply chain partners, with one low-profile battery supplier now stepping into the limelight.
Industry sources reveal that Sunwoda, a key supplier for Li Auto’s L7 and L8 models, is quietly weaving itself into the supply chains of several other automakers. This rise echoes that of China Aviation Lithium Battery (CALB), which gained a foothold with GAC Aion just before its sales took off. It seems another second-tier battery manufacturer is about to break through.
In an exclusive interview with 36Kr, Sunwoda’s chairman Wang Wei shed light on why his company has become the secondary supplier of choice for many leading EV manufacturers.
Back in 1997, Wang Wei co-founded Sunwoda with his brother Wang Mingwang. Today, Wang Wei remains the driving force behind the company as its chairman.
Though typically media-shy, Wang Wei spoke candidly with 36Kr, much like Sunwoda itself—low-key, yet sincere.
Right now, the power battery industry faces two pressing challenges: oversupply and cutthroat price wars. As automakers push for lower battery costs, the pressure is mounting on every part of the supply chain.
Wang Wei attributes Sunwoda’s resilience to three factors: having the financial stability to ride out tough times, producing unique products, and ensuring that customers can’t do without them. “You can’t start by haggling over price,” he said. “First, you have to ask how much the product is really worth.”
Differentiation, Wang Wei explained, is the key to breaking through in a market dominated by giants like Contemporary Amperex Technology (CATL) and BYD. “These companies are already excellent, with well-established ecosystems. If they decide to compete on price, there’s no way to defend yourself.”
Sunwoda’s competitive edge is its fast-charging technology. In 2022, it began mass producing the SFC480 fast-charging battery, which debuted in Xpeng Motors’ G9 model. This year, Sunwoda has already pushed the technology to its third iteration, boasting a peak charging rate of 6C.
Sunwoda’s fast-charging expertise, however, didn’t come overnight. It traces back to the company’s early work on its first hybrid EV (HEV) battery.
In 2017, when Sunwoda formally announced its entry into the power battery market, the stock price took a dive. “People thought we were crazy,” Wang said. “Many companies were folding, and there we were, just entering the industry.”
That same year, battery maker OptimumNano faced a debt crisis that shook the industry, with many investors fleeing and weaker competitors being pushed out. Sunwoda survived by taking on the most challenging projects: HEV batteries, which had more stringent requirements for battery lifespan and fast charging capabilities. But this commitment paid off, laying the foundation for Sunwoda’s reputation as a leader in fast-charging technology, while also attracting major clients like Renault and Nissan.
Sunwoda’s first battery took 3–4 years to move from development to mass production, finally hitting the market in 2019. Today, HEV batteries are the backbone of Sunwoda’s power battery business, with production operating at nearly full capacity, according to Wang.
This low-key battery company has managed to attract both domestic and international automakers. In 2022, Sunwoda Power, its power battery subsidiary, secured about RMB 8 billion (USD 1.1 billion) through two rounds of funding. By then, major automakers like Li Auto, Nio, Xpeng, SAIC Motor, GAC Group, and Dongfeng Motor had already joined its roster of clients.
Still, in the power battery market, technology alone doesn’t always stand out. While Sunwoda has made strides with the fast-charging capabilities of its batteries, CATL’s Shenxing and Qilin batteries remain dominant, with even more models relying on its technology.
So, how does a second-tier battery maker like Sunwoda compete with an industry giant like CATL? Wang’s strategy has been to avoid head-on confrontation. Instead, Sunwoda has positioned itself as a secondary supplier, quietly integrating into supply chains. Against its non-CATL rivals, Sunwoda’s stable foundation has become its greatest strength.
According to its financial report, Sunwoda generated RMB 23.918 billion (USD 3.4 billion) in revenue during the first half of 2024, a year-on-year increase of 7.57%. Net profit rose by 87.89% to RMB 824 million (USD 116 million). The consumer battery segment made up around 55% of revenue, bringing in approximately RMB 13.2 billion (USD 1.8 billion), while the power battery business accounted for about 26%, or RMB 6.2 billion (USD 871.2 million).
Sunwoda’s confidence in its foundation is what sets it apart when bidding for automaker contracts.
Founded in 1997, Sunwoda has weathered several industry upheavals. At the heart of its success is the Wang brothers’ cautious and steady approach. “You have to have a deep respect for batteries,” Wang said.
Between 2021–2022, battery companies scrambled to scale up production. At that time, aside from CATL and BYD, most were producing batteries with a total annual capacity of less than 20 gigawatt-hours. Yet, their targets for 2025 were as high as 600 GWh.
Although Sunwoda is traditionally conservative, it continued ramping up production during this period. “We were careful, but we still stepped into a few traps,” Wang admitted. “Some clients made big promises—placed orders, paid in advance—but in the end, some of those orders didn’t materialize. It wasn’t just a loss for production lines and R&D. We lost opportunities too.”
But compared to other companies, Sunwoda’s expansion investments were modest. Wang believes that, based on its assets, revenue, and profits, Sunwoda has held its own.
If anything, caution and diligence have been the hallmarks of Sunwoda’s journey, propelling it to its current position. “You must respect the battery business,” Wang said.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Han Yongchang for 36Kr.