The Pentagon on Tuesday added a Chinese EV battery giant to a list of companies working directly or indirectly with the Chinese military, a move that’s poised to have ripple effects for EV makers including Ford and Tesla.
The Department of Defense added Contemporary Amperex Technology Co., or CATL, the world’s largest producer of lithium-iron-phosphate batteries, to its list of 134 “Chinese military companies” that have both military and commercial technology, in a notice published Tuesday. The list was created by a 2021 defense spending bill.
The move is significant given that Ford is currently working to build an EV factory near Marshall, Michigan, with the use of technology from CATL.
Under that agreement, CATL will license its EV battery technology to Ford, which has said it will operate the plant. CATL is also working to provide faster charging batteries for Tesla. A top CATL executive also told Reuters last year that it would seek to build another facility in the U.S. if incoming president-elect Donald Trump would allow it.
While Ford and Tesla did not immediately respond when asked for comment, CATL issued a statement rebutting the designation.
“CATL has never engaged in any military-related business or activities, so this designation by the Department of Defense is a mistake,” the company said. “It does not restrict CATL from conducting business with entities other than DoD and is expected to have no substantially adverse impact on our business.”
“We will proactively engage with DoD to address the false designation, including legal action if necessary, to protect the interests of our company and shareholders as a whole,” CATL added.
The Pentagon’s designation adds fodder to China hawks on Capitol Hill already skeptical of the company, including incoming president-elect Donald Trump’s appointee to lead the State Department, Sen. Marco Rubio (R-Fla.).
Republicans in both chambers of Congress have pushed the Biden administration to ramp up scrutiny of CATL and Gotion High-Tech Co., another Chinese battery-maker, accusing the companies of working with China’s military and using forced labor in their supply chains.
In August, Rubio and Rep. John Moolenaar of Michigan, the new chair of the House Select Committee on the Chinese Communist Party, joined their colleagues in calling on the DOD to add CATL and Gotion to the list of companies tied to China’s military.
Last year, the House passed by voice vote H.R. 8631, the “Decoupling From Foreign Adversarial Battery Dependence Act,” which would prohibit the Department of Homeland Security from buying batteries from six companies with China ties — including CATL.
