Tesla has broadened its battery supply chain in China by officially adding Sunwoda Electric Vehicle Battery Co Ltd (Sunwoda EVB) as a global power battery supplier, according to a report from Chinese media outlet 36Kr. Industry sources indicate that Sunwoda EVB is now Tesla’s fifth supplier of power batteries worldwide.
The first shipments of these batteries have left Sunwoda’s manufacturing facility in Yiwu, Zhejiang province, and are currently installed in vehicles produced at Tesla’s Shanghai plant for overseas deliveries. There is no confirmed timeline for their integration into models sold within China.
Under the new arrangement, Tesla is purchasing battery cells directly from Sunwoda EVB, then handling the assembly of modules and packs in-house. This approach represents Tesla’s first direct engagement with prismatic-cell suppliers, moving beyond its previous practice of procuring fully assembled modules from its long-standing partner CATL. The shift allows Tesla to exert tighter control over battery costs and manufacturing processes.
Diversifying its supply base has been a strategic priority for Tesla, which has sought an alternative to CATL alongside exploratory talks with BYD for European operations. Power battery procurement still accounts for more than 30 percent of a vehicle’s production cost. In 2025, Tesla’s automotive revenue declined 10 percent year-on-year to $69.5 billion, and its automotive gross margin, excluding regulatory credits, stood at 15.4 percent—well below its 2021 peak—driving the company to bolster its supply-chain leverage.
The cells supplied by Sunwoda EVB employ third-generation lithium iron phosphate (LFP) chemistry and support up to 3C charging rates, aligning with growing industry demand for ultra-fast charging capabilities. Sunwoda has built its market presence on competitive pricing and service offerings, and already operates a joint venture with Chinese electric vehicle maker Li Auto.
Sunwoda EVB filed for a Hong Kong listing in July last year, reporting total revenue of 56 billion yuan in 2024. The company recently settled a battery-quality lawsuit with a Geely subsidiary, addressing claims of up to 2.31 billion yuan. The settlement is projected to affect net profit attributable to shareholders by 500 million to 800 million yuan in 2025, with all processed battery packs remaining under Sunwoda’s ownership.
Source: CNEV Post
