U.S. Lawmakers Accuse CATL of Aiding Chinese Military

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What’s new: Two U.S. lawmakers have urged the Department of Defense (DoD) to “immediately” place Chinese battery giant Contemporary Amperex Technology Co. Ltd. (CATL) (300750.SZ) on a list of companies allegedly aiding China’s military.

While the list doesn’t carry sanctions or other direct penalties, it is expected to restrict access to some defense contracts.

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Two U.S. lawmakers requested the Department of Defense to list Chinese battery giant CATL as aiding China’s military, which could restrict its access to defense contracts.
CATL refuted the allegations, claiming their products are safe and not a national security threat.
U.S. concerns about Chinese companies' involvement in EV manufacturing include new laws preventing the DoD from using CATL’s batteries starting in October 2027.

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Who’s Who

Contemporary Amperex Technology Co. Ltd. (CATL): Contemporary Amperex Technology Co. Ltd. (CATL) is the world's largest producer of electric-vehicle batteries. Recently, two U.S. lawmakers urged the Department of Defense to add CATL to a list of companies allegedly supporting China's military. Although CATL denies these accusations, being added to the list is expected to restrict its access to some defense contracts. CATL's role in U.S. EV manufacturing has sparked concern among lawmakers.

BYD Co. Ltd.: BYD Co. Ltd. (002594.SZ) is among the Chinese companies from which the U.S. defense department will be prohibited from procuring batteries starting October 2027. This action is part of a broader move to reduce dependency on Chinese firms and address national security concerns.

Ford Motor Co.: Ford Motor Co.’s battery plant in Michigan faced resistance from Republican House committee chairs over its use of CATL’s technology. This led to the plant halting work twice before resuming construction in November. The pushback emphasizes the growing concerns among U.S. lawmakers about Chinese involvement in domestic EV manufacturing.

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What Happened When

Before November 2023：: Ford Motor Co.’s battery plant in Michigan, which would use CATL’s technology, encountered resistance, forcing Ford to stop work on the plant twice.

November 2023：: Construction of Ford Motor Co.’s battery plant in Michigan, which uses CATL’s technology, resumed.

December 2023：: President Joe Biden signed a bill into law preventing the defense department from procuring batteries from CATL, BYD Co. Ltd., and four other Chinese companies beginning in October 2027.

Wednesday, August 28, 2024：: Senator Marco Rubio and Representative John Moolenaar sent a letter to the defense department’s Secretary Lloyd Austin urging the placement of CATL on a list of companies allegedly aiding China’s military.

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