Sunwoda Supplies Batteries for Tesla's Global Models | Exclusive Report by 36Kr

Tesla's supply chain layout in China is still expanding.

36Kr Auto has learned from multiple industry insiders that Sunwoda Electric Vehicle Battery Co., Ltd., a subsidiary of Sunwoda that focuses on the power battery business, has entered Tesla's global supply chain and become the fifth global power battery supplier for Tesla.

Industry insiders who are involved in the project revealed that this type of battery has been shipped from Sunwoda's factory in Yiwu, Zhejiang, and is installed in models produced at Tesla's Shanghai factory and sold overseas. "It has been shipped for some time."

As for when this type of battery will be installed in domestic models, there is no conclusion yet. "Generally speaking, Tesla has an observation period of about a year for new components," a battery industry insider analyzed to 36Kr, but other decision - making factors cannot be ruled out.

All along, Tesla has been looking for a second Chinese power battery supplier outside of CATL to explore cost - reduction opportunities. BYD once shipped batteries to Tesla's European factory, but there has been no clear progress since then. Sunwoda is another major power battery supplier that Tesla has sought in China after that.

According to 36Kr, Tesla's cooperation with Sunwoda on power batteries also adopts a new model. Tesla directly purchases battery cells from Sunwoda and manufactures modules and PACKs (battery packs) by itself. Compared with the previous model of purchasing modules from CATL, this is also a new attempt by Tesla in square batteries.

Previously, Tesla already had power battery suppliers such as CATL, Panasonic, LG Energy Solution, and BYD globally. Introducing Sunwoda means that Tesla's global power battery supply chain has become more diversified, reflecting Tesla's urgent need to reduce costs.

Tesla Introduces Sunwoda Globally to Test Super - Fast Charging

Although power battery technology has become relatively mature and the cost of raw materials has stabilized, the procurement cost of power batteries still accounts for more than 30% of the total vehicle cost. Therefore, when any automaker wants to reduce costs, it will first target the battery. Tesla is no exception.

In January this year, Tesla released its full - year financial report for 2025. Among them, the financial data of the automotive business continued to decline.

In 2025, Tesla's new vehicle delivery volume declined year - on - year for two consecutive years, with a total annual delivery volume of 1.636 million vehicles; the automotive business revenue was $69.526 billion, a year - on - year decrease of 10%; after excluding carbon credits, the automotive gross profit margin was only 15.4%, nearly 40% lower than the peak of 27% in 2021. Therefore, although Tesla's energy storage business has shown some improvement, Tesla's revenue in 2025 still decreased by 3% year - on - year to $94.83 billion, and the net profit attributable to shareholders decreased by 26.4% year - on - year to $5.86 billion.

Relying on grand visions for the future AI world such as Optimus humanoid robots, Robotaxi, and xAI, Tesla's market value still remains at trillions of dollars. However, these businesses seem difficult to monetize in the short term. On the contrary, they still require long - term capital investment from Tesla and investors.

That is to say, the automotive business will still be the main source of income for the company for quite some time in the future. Therefore, how to gain more bargaining power in the supply chain, especially in the battery area, to increase gross profit and net profit, is a question that Tesla's automotive business must answer at present.

For a long time, Tesla's battery supply has mainly relied on CATL, Panasonic, and LG Energy Solution. CATL supplies lithium iron phosphate battery modules for Tesla, suitable for entry - level and mid - range models; Panasonic and LG Energy Solution focus on high - end ternary lithium batteries to support the needs of Tesla's high - performance models.

Among them, CATL has always adhered to a high - gross - profit strategy, so the scope for price cuts is naturally limited.

The other two global battery suppliers for Tesla, Panasonic and LG Energy Solution, supply ternary lithium batteries, whose cost is naturally higher than that of lithium iron phosphate batteries. Coupled with the fact that Panasonic's battery gross profit margin has only hovered around 5% in recent years, it seems difficult for Tesla to obtain more gross profit from these two suppliers.

Domestic second - and third - tier power battery manufacturers represented by Sunwoda adopt the strategy of "affordable and high - volume" to win orders - providing competitive prices while using newer materials.

A person familiar with the matter told 36Kr that the power battery cells supplied by Sunwoda to Tesla use materials such as the third - generation lithium iron phosphate, which supports the charging rate to be increased to 3C.

Super - fast charging technologies such as 3C and even 5C are energy - replenishment solutions commonly promoted in the Chinese market and are also considered one of the industry trends. Tesla also seems to be interested in testing the waters, and the products provided by Sunwoda just meet this need.

In addition, Tesla only purchases battery cells from Sunwoda, and the pricing and customization rights for modules and PACKs are all in Tesla's hands. This also helps Tesla to better control battery costs.

From the perspective of Tesla's global layout, as a second - tier manufacturer, Sunwoda will have a higher degree of cooperation. According to public information, Tesla is building a factory in Mexico with a planned annual production capacity of one million vehicles.

For these factories to be put into production smoothly, every component of the vehicle is indispensable. It is a more economical choice to have suppliers build factories overseas together.

However, there are usually many restrictive factors for leading battery manufacturers to closely follow Tesla's steps. For example, Panasonic refused to build a factory in Shanghai with Tesla when the Shanghai factory was under construction.

In contrast, as long as they are given enough orders, second - tier power battery manufacturers like Sunwoda are more motivated to go overseas with the automaker.

Sunwoda Leverages Cost - Effectiveness and Service to Win Customers

According to the new prospectus submitted by Sunwoda to the Hong Kong Stock Exchange at the end of January this year, as of the end of the third quarter of last year, more than 50% of the company's revenue was still contributed by the consumer battery business, and the loss of the power battery business has also narrowed to the level of one billion yuan.

Entering Tesla's power battery supply chain means an excellent opportunity for Sunwoda to break through.

In the automotive manufacturing industry, which highly emphasizes scale, scale is, in a sense, equivalent to profitability. At present, the pattern of the domestic power battery industry is that CATL's power battery shipments have long accounted for about half of the market share; Fudi Battery, relying on BYD's annual new vehicle sales of millions, has also maintained a high loading volume for a long time.

Except for these two companies, the loading volumes of second - and third - tier power battery manufacturers such as CALB, Gotion High - Tech, and Sunwoda are not very different. Therefore, an order for a star model is often an opportunity for them to increase their shipments and market share.

Although Tesla's new vehicle delivery volume has declined year - on - year for two consecutive years, it still reaches about two million vehicles a year. Therefore, Tesla as a customer is, to some extent, an important turning point for Sunwoda's power battery business.

Moreover, in addition to quantifiable performance indicators such as revenue and net profit, entering Tesla's supply chain will undoubtedly give Sunwoda a more convincing endorsement of its product strength.

Tesla is not the first major customer that Sunwoda has won.

Before Tesla, Sunwoda had established a joint venture with Li Auto, a leading new - energy vehicle startup. This year, the "Li Auto - branded" batteries developed by Li Auto and manufactured by Sunwoda will be installed in vehicles; a new Xiaomi vehicle equipped with Sunwoda batteries will also be released this year.

What impresses these automakers is, on the one hand, the cost - effectiveness of Sunwoda's products; on the other hand, Sunwoda's low - key attitude also makes automakers willing to cooperate with it.

An industry insider told 36Kr that Sunwoda once specially formed a team of 30 - 50 people and stationed it next to Xiaomi's automotive office in Jinqiao, Shanghai, waiting to respond to customers' needs at any time.

In the cooperation between Sunwoda and Li Auto, core links such as battery cell development and battery design are all controlled by Li Auto, and Sunwoda mainly plays the role of a contract manufacturer.

In today's increasingly fierce competition in the automotive industry, automakers are more eager to squeeze out every bit of cost, which gives second - and third - tier power battery manufacturers hope of winning customers from leading companies. Sunwoda is undoubtedly a company that has made relatively obvious progress in this regard.

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