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Tesla’s battery supplier in China, CATL, was tagged by Washington as a company that works with the Chinese military.
Lawmakers in Washington argue that CATL’s ties to the Chinese military may result in security threats. According to Citi estimates, CATL’s electric vehicle (EV) and electric storage systems (ESS) accounted for 4% and 35% of the US market in 2023, respectively.
CATL joins a list of other Chinese companies, like tech giant Tencent Holding, with connections to China’s military. As of this writing, Washington has not placed any restrictions on the Chinese companies in that list. However, the designation might dissuade US companies from working with those on the list.
CATL’s new designation might not affect Tesla’s operations in the United States. The Chinese battery supplier primarily works with Tesla’s Gigafactory Shanghai in China. Tesla Giga Shanghai exports vehicles to markets outside China, including Europe and Canada. However, it has not shipped Tesla cars to the United States for some time.
Reuters reported that Tesla and CATL discussed a potential license agreement for the Chinese company’s technology in Nevada. Tesla is currently expanding its battery production facility in Nevada.
Besides Tesla, Ford will use CATL technology in its battery production plant in Marshall Township of Western Michigan. General Motors is reportedly also considering using CATL technology in battery production.
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