Sunwoda has made an announcement stating that its subsidiary, Sunwoda Electric Vehicle Battery Co., Ltd., had been embroiled in a sales contract dispute with VREO. This disagreement prompted VREO to initiate legal proceedings by filing a lawsuit with the Ningbo Intermediate People's Court in Zhejiang Province in December 2025. VREO sought compensation and other payments from Sunwoda Electric Vehicle Battery Co., Ltd. Following negotiations, the two parties have successfully signed a Settlement Agreement, which has now come into effect. Consequently, VREO has withdrawn its lawsuit. According to the terms of the agreement, the parties will share the costs associated with replacing power battery packs, with the sharing being based on the actual costs incurred. As of December 31, 2025, the outstanding amount payable by Sunwoda Electric Vehicle Battery Co., Ltd. stands at 608 million yuan, which will be paid in installments over a five-year period. It is estimated that this incident will have an impact on Sunwoda's net profit attributable to shareholders for the year 2025, with the impact ranging from 500 million to 800 million yuan.