China’s CATL Refutes U.S. Lawmakers’ Allegations of Using Forced Labor

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CATL signage is displayed at an exhibition in Shandong province on June 5, 2024. Photo: VCG.

China’s electric car battery giant Contemporary Amperex Technology Co. Ltd. (CATL) (300750.SZ), the world’s largest lithium battery manufacturer, has refuted U.S. lawmakers’ allegations that the company uses forced labor in its supply chains, calling the accusations “groundless and completely false.”

In a statement published Friday, CATL said it had never procured products from some of the firms cited in the lawmakers’ letter, adding that, with other suppliers, it had ceased business relationships with some long ago, while for others, business was conducted with different subsidiaries and with “absolutely no connection to forced labor.”

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CATL and Gotion refute U.S. lawmakers' forced labor allegations, calling them "groundless" and "unfounded."
U.S.-China tensions impact lithium battery exports, with U.S. imports from China dropping by more than half in early 2023.
Small and medium Chinese battery firms are setting up U.S. subsidiaries to mitigate tariff increases, with investments like Capchem's $350 million in Louisiana.

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Who’s Who

Contemporary Amperex Technology Co. Ltd. (CATL): Contemporary Amperex Technology Co. Ltd. (CATL) is the world’s largest lithium battery manufacturer. Recently, U.S. lawmakers accused CATL of using forced labor in its supply chains, which the company called "groundless and completely false." CATL claims compliance with all U.S. laws and regulations and clarified it ceased business with some suppliers long ago. The allegations led to a 5.66% drop in CATL’s stock price. CATL does not have production capacity in the U.S., primarily acting as a technical partner.

Gotion High-Tech Co. Ltd.: Gotion High-Tech Co. Ltd., the fifth-largest power battery manufacturer in China, is partially owned by Volkswagen AG. It has one of only two Chinese lithium battery factories in the U.S., with a planned annual output of 40 gigawatt hours in Illinois. The company has rejected allegations of forced labor in its supply chains, calling the accusations unfounded and emphasizing its commitment to respecting human rights and employee rights.

Capchem Technology USA Inc.: Capchem Technology USA Inc. is investing $350 million in Louisiana, supported by a state government tax relief incentive worth $71.3 million.

Kedali Industry Co. Ltd.: Kedali Industry Co. Ltd., based in Shenzhen, has announced an investment of $49 million to build a plant in Indiana. This move aligns with the strategic efforts of some small and medium-sized Chinese battery material companies to establish subsidiaries in the U.S., leveraging flexible decision-making abilities and lower opportunity costs to enter the U.S. market despite increased tariffs.

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What Happened When

November 2023：: Ford resumed work on its Michigan battery plant after it faced resistance from the Republican chairs of two U.S. House of Representative committees.

December 2023：: Senator Marco Rubio and 26 other senators requested the Department of Defense to revoke the decision to install CATL’s batteries at Camp Lejeune.

May 2024：: The China Industrial Association of Power Sources analyzed the decrease in export value of lithium batteries to the U.S. due to a significant drop in lithium carbonate prices and the impact of the Inflation Reduction Act.

Friday, June 7, 2024：: CATL published a statement refuting U.S. lawmakers’ allegations of forced labor, noting it had ceased business with some suppliers and had no connection to forced labor with others.