CCP-tied battery firm’s dominance could pose major national security and espionage threats, new report warns

A battery manufacturer with extensive connections to the Chinese Communist Party (CCP) could pose significant intelligence and national security risks to the U.S., according to a new report by the Foundation for Defense of Democracies (FDD).
About one-third of the world’s EVs currently use CATL batteries, and the company has been the world’s largest manufacturer of medium- and large-sized EV batteries in addition to being involved in deals with U.S. utility and battery storage companies, according to the FDD report and various media reports.
“Our pursuit of green energy shouldn’t be at the cost of handing over the keys of our electrical infrastructure to foreign powers,” Craig Singleton, the report’s author and senior China fellow for FDD, told the Daily Caller News Foundation.

A battery firm with considerable ties to the Chinese Communist Party (CCP) could pose significant espionage and national security risks to the U.S. as policymakers move to electrify American life, according to a new report by the Foundation for Defense of Democracies (FDD), a non-partisan research institute focused on issues of national security and foreign affairs.

CATL, a battery manufacturing firm headquartered in Fujian, China, is a major player in the global battery market, as it already holds a dominant position in the global electric vehicle (EV) battery market and is poised to supply crucial large-scale energy storage systems to American utility companies to help them provide the decarbonized power grids of the future, according to the FDD report. CATL, which has subsidiaries based in the U.S. and several European countries, has already had equipment installed within a U.S. military base, and the burgeoning dependence on the Chinese company’s products may leave essential American infrastructure vulnerable to espionage and malware attacks, according to the FDD report.

“Our pursuit of green energy shouldn’t be at the cost of handing over the keys of our electrical infrastructure to foreign powers,” Craig Singleton, the report’s author and senior China fellow for FDD, told the Daily Caller News Foundation.

“CATL’s deep ties to America’s electrical grids without stringent oversight is a looming national security blind spot,” he continued, adding that “just as Huawei sought control in telecom, CATL is strategically positioning itself to dominate our electric future. It’s a playbook we’ve seen before.”

About one-third of the world’s EVs currently use CATL batteries, according to Electrive, and the company has been the world’s largest manufacturer of medium- and large-sized EV batteries, according to Bloomberg. CATL partners with Tesla, Volkswagen, BMW, Volvo, and General Motors, according to the FDD report, and the company has also launched a joint venture facility with Ford in Michigan; its foothold in the Western car market could allow for the surreptitious collection of drivers’ data and other information, according to the FDD report.

However, Ford, which continues to deal with the United Auto Workers (UAW) strike, announced in September that the Michigan facility’s construction would be paused indefinitely without citing a concrete reason. The Ford-CATL plant would receive U.S. subsidies via the Inflation Reduction Act if it is eventually completed, according to the Heritage Foundation.

CATL equipment has been installed at energy generation facilities in Florida, Virginia, Nevada, and California, and also at a solar farm on leased land inside Camp Lejeune, a U.S. Marine Corps base in North Carolina, according to the FDD report. The company has also engaged in projects with a handful of American utility and battery storage companies to date, according to the FDD report.

Some of the key hazard categories identified in the FDD report include data security, supply chain risks, potential soft spots in crucial power infrastructure, and the possibility that a firm acting in alignment with China’s interests could exercise political influence on American rules and regulations. (RELATED: Blacklisted Chinese Tech Giant Building Shadow Network Of Factories To Evade US Sanctions)

REPORTER: “Is the automakers strike in the contract impasse partly a result of the President’s forced transition to electric vehicles?”

JEAN-PIERRE: “Uhh, no.” pic.twitter.com/2CNf6N0BEE

— Daily Caller (@DailyCaller) September 15, 2023

According to the White House, the administration has committed $12 billion to allow manufacturers to retrofit their plants for EV production and $7.5 billion from the bipartisan infrastructure law to develop a national charging network, while the Inflation Reduction Act (IRA) contains $12.5 billion worth of tax credits to entice consumers into switching to an EV, according to UtilityDive.

The administration is also planning to have battery storage technology and systems play a much larger role in the power grid of the future as existing fossil fuel-fired plants are increasingly retired and replaced with intermittent generation sources like solar and wind. All of these policies are aligned with the administration’s goal of having the U.S. economy reach net-zero carbon dioxide emissions by 2050.

CATL is not the first CCP-linked battery company to draw scrutiny for those ties. Gotion, a U.S.-based subsidiary “wholly owned and controlled” by China-based Gotion High-Tech, has come under the microscope of concerned citizens and Republican lawmakers for its CCP connections.

The DCNF reported that Gotion High-Tech counted 923 CCP members among its employees as of 2022, entered into a joint venture with a U.S.-government designated “Communist Chinese Military Company Subsidiary” and hosted field trips for employees in which attendees role played as soldiers of the Red Army and established a talent recruitment program out of its subsidiary’s U.S. headquarters in 2017.

“Last week, for the first time, all Five Eyes (the intelligence sharing countries) members met in the United States to level a whole-of-society warning of the aggressive subnational incursions and influence operations underway by the People’s Republic of China (PRC) and the CCP,” Joseph Cella, a leading member of the Michigan-China Economic and Security Review Group and a former U.S. ambassador, told the DCNF. “These moves by the PRC and the CCP are national security threats and expose our countries to espionage and intellectual property theft.”

CATL, Ford, the Department of Energy, the Treasury Department, the National Security Council, and the White House all did not respond immediately to requests for comment.

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