The U.S. Defense Department faces an upcoming ban on batteries procured from China’s largest manufacturers as lawmakers aim to separate the Pentagon’s supply chain from its geopolitical adversary.
What Happened: The ban is part of the recently passed National Defense Authorization Act (NDAA). It will prevent purchases from Contemporary Amperex Technology Co. Ltd., BYD Co. BYDDF BYDDY, and four other Chinese firms, beginning in October 2027, Bloomberg reported on Thursday.
The prohibition does not extend to commercial purchases. For instance, Ford Motor Co. F can continue licensing technology from CATL for its electric vehicle batteries in Michigan.
The Department of Defense did not immediately respond to Benzinga’s request for comment.
Increased scrutiny on CATL’s dealings with Ford emerged last year due to concerns over the influence of Chinese companies on the electric vehicle sector.
Other manufacturers affected by the ban include Envision Energy Ltd., EVE Energy Co., Gotion High Tech Co., and Hithium Energy Storage Technology Co. Notably, only three of the top 10 global battery suppliers are non-Chinese entities.
Pentagon officials are yet to offer a clear definition of the new rule’s scope. The NDAA has previously introduced provisions to separate the Defense Department’s supply chain from China, with restrictions on Chinese semiconductors.
While the ban strictly applies to defense procurement, industries and lawmakers often use such rules as guidelines to determine trustworthy materials, products, and companies for their business operations.
Check out more of Benzinga's Future Of Mobility coverage by following this link.
Read Next: Fancy A Spin In A Cybertruck? Rent One On Turo For $1000 A Day
Mario Duran Via Wikimedia Commons
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
