(Yicai Global) Nov. 29 -- Gotion High-Tech, a major Chinese supplier of lithium battery raw materials, said all of its products meet international standards and national safety criteria following customer concerns about quality in the wake of a series of product mishaps. The Volkswagen-backed company’s shares fell.

Gotion blamed problems with its battery packs on defective guard plates bought by its client Anhui Oupeng Power Technology. “The accidents were caused by defects in the guard plates based on tests and verifications, and Oupeng bought the plates from other firms,” Hefei-based Gotion said in a statement today.

Gotion penned a supply agreement with battery pack maker Oupeng and an e-bike producer in October 2019, per publicly available information. Oupeng began supplying batteries to the e-bike maker in April last year, which was followed by dozens of spontaneous ignition and explosion accidents.

Gotion and Oupeng have been investigating the accidents.

Shares of Gotion [SHE: 002074] finished 2.5 percent lower today at CNY62.33 (USD9.80) amid a general rise in the stock prices of lithium battery makers.

Oupeng General Manager Lin Feng told a press conference yesterday that the two sides confirmed liquid leakage, corrosion, and explosion-proof valve malfunction in battery cells in the presence of Gotion’s technicians and marketing staff last November.

Gotion said today that under the supply deal it provides battery cells, while Oupeng develops, produces, and delivers battery packs, along with after-sales service. The firm also said Oupeng has not paid more than CNY20 million (USD3.13 million) for products it has bought, forcing it to file a lawsuit over the arrears and malicious slander.

Volkswagen China Investment became Gotion’s largest shareholder in May last year when it bought an almost 26.5 percent stake in the company for EUR1.1 billion (USD1.24 billion). From January to September, Gotion’s installed capacity for power batteries ranked third after Contemporary Amperex Technology and BYD.

Editor: Peter Thomas