The U.S. Congress recently passed a provision as part of the National Defense Authorization Act of 2024 (NDAA 2024) that bans the Department of Defense from purchasing batteries produced by six Chinese companies, including CATL and BYD. This ban is part of an effort to further “decouple” the Pentagon’s supply chain from China, according to reports from Bloomberg.
The ban, which will go into effect in October 2027, also encompasses batteries from Envision Energy, Yiwei Lithium Energy, Guoxuan Hi-Tech, and Haichen Energy Storage. While the ban applies specifically to defense procurement, it is expected that industries and lawmakers will use these regulations as a basis for their own business processes.
The U.S. Treasury Department has also announced measures to reduce the dependence of the American electric vehicle industry on China. Starting in 2024, electric vehicles produced in the United States containing battery components manufactured or assembled in countries such as China will no longer be eligible for up to $7,500 per vehicle in tax credits provided by the U.S. Inflation Reduction Act.
It is reported that the U.S. Congress is attempting to sever ties with China in key supply chain areas, including chips and batteries. The Pentagon has not yet responded to request for comment on the ban.
This move is the latest in a series of efforts aimed at reducing the reliance of the U.S. on Chinese-manufactured products, particularly in the defense sector. The NDAA 2024 has already seen restrictions on the use of Chinese chips by the Department of Defense, and the current ban on batteries from Chinese companies is a continuation of these efforts.