The world’s largest EV battery maker was designated as a “Chinese Military Company” on Monday by the US Defense Department. CATL, which supplies EV batteries to Tesla, BMW, Ford, Volkswagen, Toyota, Nissan, Honda, and many others, is now on the US blacklist. Here’s what that means.
It’s no secret that CATL dominates the global EV battery market. In the first 11 months of 2024, CATL accounted for nearly 37% of all electric vehicle batteries sold globally.
China’s BYD came in a distant second, with a share of around 17%. LG Energy (11.6%), CALB (4.6%), and SK On (4.5%) rounded out the top five.
CATL batteries power major Chinese OEMs like Geely, NIO, and Li Auto, but global EV leaders like Tesla, VW, Nissan, BMW, and Mercedes-Benz also choose to use them.
After landing on the US blacklist, CATL said in a statement that it “has never engaged in any military-related business or activities.” The battery giant added that the blacklisting is “a mistake” by the US Department of Defense (DOD).
The designation only restricts CATL from doing business with the DOD and “is expected to have no substantially adverse impact” on the company.
Why is CATL now on the US blacklist?
CATL will work with the DOD to “address the false designation,” including legal action if needed. The battery maker said it would protect the interests of the company and its shareholders.
If anything, it could be a bigger blow to the company’s reputation. Following the news, CATL’s stock was down around 3% on Monday.
The DOD says the list is an important continuing effort to highlight and counter the People’s Republic of China’s (PRC) Military-Civil Fusion strategy.
According to the DOD, the 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.”
Meanwhile, CATL continues to launch new tech to maintain its commanding lead in the global EV battery market. Last month, CATL revealed plans to list on the Hong Kong Stock Exchange to fuel its global expansion.
Two weeks ago, CATL launched its new Bedrock Chassis, deeming it the “World’s first ultra-safe skateboard chassis.” It’s also quickly expanding its EV battery swap network with plans to gradually phase out gas stations. Its new Choco-SEB batteries make swapping a battery even easier than filling a gas tank.
Meanwhile, a senior executive from Panasonic Energy told Reuters on Monday that reducing its supply chain dependence on China for EV batteries made in the US is the number one priority.
Check back for more soon, as this is an ongoing story. We will keep you up to date with the latest.
Source: US Department of Defense, CATL
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