US Defense blacklists world’s leading Chinese battery maker CATL

In its latest update of the ‘Chinese military companies’ list, the US Department of Defense (DoD) mentions the Chinese battery giant CATL for the first time, along with Tencent, another Chinese giant in gaming and communications. CATL is the world’s biggest EV battery maker, with nearly 37% market share.

It is way ahead of the number two, Chinese BYD (17.1%) and Korean LG Energy Solutions (11.6%). CATL’s batteries are used in many EVs worldwide, including Teslas made in Shanghai, EVs from American Ford and French-American-Italo group Stellantis, European brands like Volkswagen, BMW, and Mercedes-Benz, and big Asian players like Toyota, Nissan, Honda, and Hyundai.

“Designation by DoD is a mistake”

The Chinese are not ‘amused’ with their name being blacklisted: “CATL has never engaged in any military-related business or activities, so this designation by the Department of Defense is a mistake. 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,” the official reply states.

“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.”

Instigated by Trump

The list was first made at the instigation of former and future President Trump to ‘identify’ Chinese companies working in the US that are used by the Chinese authorities to work for their defense industry.

The list is updated regularly and considered important by the US Department of Defense (DOD): “Updating the Section 1260H list of ‘Chinese military companies’ is an important continuing effort in highlighting and countering the People’s Republic of China’s (PRC) Military-Civil Fusion strategy.”

“The PRC’s Military-Civil Fusion strategy supports the modernization goals of the People’s Liberation Army (PLA) by ensuring it can acquire advanced technologies and expertise developed by PRC companies, universities, and research programs that appear to be civilian entities.”

Damaging CATL’s reputation

Being blacklisted has no direct legal implications but may damage CATL’s reputation and restrain American companies from working with them. Stellantis, for instance, with former American Chrysler, which builds the popular Jeep brand, has set up a 50/50 joint venture with CATL.

CATL (Contemporary Amperex Technology Co Ltd.) will invest 4.1 billion dollars to build a giga-battery factory in Spain to produce low-cost lithium iron phosphate (LFP) batteries. This will be its third battery factory in Europe.

At the same time, the Chinese are finishing a second 100 GWh battery plant in Debrecen in the eastern part of Hungary. The foundation stone was laid in April 2023, with serial operations testing starting in 2024 and production beginning in 2025. Debrecen, Hungary, is also where BMW is building the first EVs from the ‘Neue Klasse’ series.

Mercedes-Benz is one of the big consumers of battery cells and modules produced there. In 2020, Mercedes initiated an alliance with CATL and will be the first to use the cells for its next-generation models made in Germany and Hungary.

For Mercedes-Benz, the deal with CATL is another milestone in reaching a production capacity of more than 200 GWh at eight global production sites by the end of the decade. However, the Debrecen factory will also supply BMW, Volkswagen, and Stellantis.

More than batteries only

CATL’s EV technology goes further than batteries only. It launched a new skateboard called ‘Bedrock’ the day before Christmas. It should be as hard to crush as the name suggests, and it is the safest EV chassis so far. Moreover, it promises a range of over 1,000 kilometers and supports Level 3 and 4 autonomous driving.

The skateboard chassis includes a base structure or a platform, which houses the batteries, electric motors, and other electronic components fundamental to an electric vehicle. CATL says the core powertrain, brake-by-wire systems, steering, suspension, and three-electric module are all integrated into the skateboard.