U.S. lawmakers have enacted a ban prohibiting the Department of Defense from purchasing batteries made by China’s largest manufacturers. This move is part of a broader effort in Washington to reduce the Pentagon’s dependence on Chinese supply chains.
The rule, included in the latest National Defense Authorization Act passed on December 22, 2023, will prevent the acquisition of batteries from leading Chinese firms such as Contemporary Amperex Technology Co. Ltd. (CATL), BYD Co., and four others starting in October 2027.
The ban, however, does not impact commercial transactions by companies like Ford Motor Co., which is licensing CATL technology for electric vehicle battery production in Michigan. Tesla Inc. also sources some of its battery cells from BYD, the world’s top EV seller in late 2023. CATL’s deal with Ford attracted scrutiny from U.S. politicians, with Senators Ted Cruz and Marco Rubio raising national security concerns about the use of CATL batteries in defense.
In addition to CATL and BYD, the ban includes Envision Energy Ltd., EVE Energy Co., Gotion High Tech Co., and Hithium Energy Storage Technology Co. Out of the world’s top 10 battery suppliers, only three are non-Chinese, with CATL and BYD continuing to expand their global market shares.
Pentagon officials are still working to clarify the full scope of the rule. This new measure adds to prior restrictions, such as limitations on Chinese semiconductors, aimed at reducing U.S. military dependence on Chinese technologies.
Though the restrictions apply solely to defense procurement, they often serve as a guideline for industries and lawmakers when determining trusted materials and suppliers. The Pentagon has yet to issue an official comment on the decision.
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