Duke Energy Bows To Pressure, Reportedly To Phase Out CATL Batteries At Its Civilian Projects

Duke Energy Corporation DUK is reportedly planning to decommission energy-storage batteries produced by Chinese battery maker CATL due to pressure from Congress.

The utility company is decommissioning the batteries at one of the nation’s largest Marine Corps bases and will phase out CATL products at its civilian projects, reported Reuters.

The company’s decision comes after top U.S. officials warn that hackers linked to the Chinese government are targeting network-linked critical U.S. infrastructure, including the power grid.

In December, Reuters reported that Duke Energy had temporarily disconnected industrial-scale CATL storage batteries from a project on Marine Corps base Camp Lejeune after lawmakers and experts raised concerns about CATL’s close links to China’s ruling Communist Party.

“In partnership with policymakers and the Department of the Navy, we have made the decision to decommission the CATL battery energy storage system at Camp Lejeune and replace it with a domestic or allied nation supplier,” Duke Energy said in a statement to Reuters questions.

“By 2027, we are voluntarily moving away from specifying CATL battery energy storage technologies,” the statement said, adding that the company supported a “robust American supply chain.”

The move signifies how the strategic competition between the U.S. and China are affecting the businesses.

While the Duke Energy executives told the staff that they were confident in the security of the batteries, they also expressed a desire to address congressional concerns, as per the report.

Mike Gallagher, the Republican chairman of the bipartisan select committee, and Senator Marco Rubio said in a statement to Reuters that they were pleased that the company had moved to decommission the CATL batteries at Camp Lejeune.

The lawmakers said, “Additionally, in our most recent meeting with company leadership, Duke committed to entirely phasing out CATL products from its supply chain.”

Yesterday, Duke Energy reported adjusted EPS of $1.51, up from $1.11 a year ago, missed the consensus of $1.54, and revenues of $7.21 billion missed the consensus of $7.49 billion. 

In FY24, Duke Energy expects adjusted EPS of $5.85-$6.10 vs. consensus of $5.98.

Price Action: DUK shares are trading higher by 0.38% at $93.00 premarket on the last check Friday.