The U.S. Department of Defense on Monday added CATL, the world’s largest EV battery manufacturer, to its list of “Chinese Military Companies,” citing concerns about China’s Military-Civil Fusion strategy. The designation, which restricts CATL from conducting business with the U.S. Defense Department, has sparked controversy and prompted a strong response from the battery giant.
CATL, a key supplier for global automakers such as Tesla, BMW, Ford, Volkswagen, and Toyota, issued a statement denying any involvement in military-related activities. “CATL has never engaged in any military-related business or activities,” the company said, describing the designation as a mistake. The company added that the blacklisting “is expected to have no substantially adverse impact” on its operations and vowed to work with the DOD to reverse the decision, including through legal action if necessary.
The Defense Department asserts that its list aims to counter China’s Military-Civil Fusion strategy, which it claims supports the People’s Liberation Army’s modernization efforts by leveraging technologies developed by ostensibly civilian entities. “This strategy ensures the PLA can acquire advanced technologies and expertise,” the DOD said in its statement.
Despite the designation, CATL continues to strengthen its leadership in the EV battery market, accounting for nearly 37% of global EV battery sales through the first 11 months of 2024. The company recently unveiled innovations such as the Bedrock Chassis, touted as the “world’s first ultra-safe skateboard chassis,” and expanded its battery swap network with its Choco-SEB batteries designed to simplify the process.
However, the blacklisting appears to have dented investor confidence, with CATL’s stock falling approximately 3% following the announcement. As the situation unfolds, the company’s ability to address the designation and mitigate reputational damage will be closely watched by industry stakeholders.
Source: US Department of Defense
