White House adviser Elon Musk, two major U.S. banks, and a major law firm have all maintained or strengthened business relationships with a Chinese battery manufacturer that Defense Department officials believe is a participant in the Chinese Communist Party’s military-industrial complex and that analysts have flagged for patent irregularities.
Those relationships have continued against the backdrop of growing scrutiny from the Trump administration of companies with ties to the Chinese military industry. On Feb. 21, the White House issued a memorandum directing various arms of the federal government to assist it in barring Americans from investing in companies working to advance China’s “Military-Civil Fusion strategy,” an effort sources tell the Washington Examiner has recently been raised with Commerce Secretary Howard Lutnick and the U.S. Patent and Trademark Office.
Contemporary Amperex Technology Co., Limited is a Chinese manufacturer specializing in producing and developing electric vehicle batteries. The Pentagon placed CATL on its 1260h entity list in January, indicating its belief that the manufacturer was either controlled by or a collaborator with the Chinese military. While the 1260h list itself carries no formal sanctions, the Trump administration’s announcements indicate that corporations with such a designation could soon be cut off from U.S. business.
Federal law defines “Military-Civil Fusion strategy” collaborators as entities that engage in joint research with the Chinese armed forces, receive assistance from Beijing for the development of military technology, are designated as “defense enterprises” by the Chinese government, are Chinese military contractors, or advertise their wares on Chinese military procurement platforms. Pentagon officials did not disclose the specific reason behind CATL’s addition to the list.
As sanction discussions, prompted by national security concerns, are ongoing, Musk’s Tesla is reportedly negotiating to bring CATL’s equipment to the United States. Reuters reported on Jan. 8, shortly after CATL was added to the 1260h list, that Tesla and the Chinese battery manufacturer were working on an agreement to license CATL technology for battery production in Nevada. CATL and Tesla are already deeply intertwined, with the former providing the latter with batteries for vehicles made in its Shanghai factory, which is its largest facility. Tesla is looking to expand its procurement of CATL battery cells as its Shanghai factory grows, according to Reuters.
The national security implications of Chinese-made car batteries may not be obvious, but experts have made the case that consumers should be concerned.
“By compromising internet-connected public charging infrastructure, CATL could install malware on EVs, consequently allowing for the extended monitoring of countless vehicles and gathering sensitive information about their owners,” Foundation for the Defense of Democracies China program director Craig Singleton wrote in October 2023. “Furthermore, the company could execute a shut-down of EV charging networks or even disable targeted vehicles through hardware infiltration. Sophisticated, sometimes undetectable malware on these energy storage stations could pose a threat to the industrial control systems connected to the U.S. energy grid. In a worst-case scenario, an attack on these control systems could result in widespread blackouts impacting industrial centers or financial hubs.”
Musk’s entanglements with China have already caused some drama within the Trump administration. Axios, for instance, reported on March 20 that President Donald Trump had personally barred Musk from attending a planned top-secret briefing on China.
“What the f*** is Elon doing there? Make sure he doesn’t go,” Trump said at the time, according to an anonymous top official who spoke with Axios.
Musk has also repeatedly butted heads with prominent China hawks in the Trump administration, notably Secretary of State Marco Rubio and Treasury Secretary Scott Bessent. Some of the cuts made by Musk’s Department of Government Efficiency have received pushback from critics of China for, in their view, weakening America’s ability to counter Chinese influence abroad.
While Trump denied the reporting that Musk was privately scheduled to attend a top-secret China briefing, he has publicly voiced concerns about the billionaire’s ties to Beijing.
“I certainly wouldn’t want, you know — Elon has businesses in China, and he would be susceptible, perhaps, to that,” the president told reporters. “But it was such a fake story.”
Musk is not the sole player in the U.S. business community who is casting his lot with CATL. Bank of America and J.P. Morgan are underwriting CATL’s upcoming Hong Kong initial public offering. The U.S. law firm Kirkland & Ellis, meanwhile, is providing legal advice to CATL as the IPO approaches. The banks have faced calls from Rep. John Moolenaar (R-MI), chairman of the House Select Committee on the CCP, to pull out of the deal.
“If J.P. Morgan and Bank of America proceed with this IPO, they risk complicity in underwriting genocide, undermining American industry, and endangering U.S. service members,” Moolenaar said in a statement. Moolenaar’s comment alludes to allegations that CATL sources goods from forced Uyghur labor, a claim the battery manufacturer denies.
Beyond the Pentagon’s designation of CATL as a “Chinese military company” and allegations of slave labor, the company’s Hong Kong IPO has been criticized by some analysts for having irregularities as it relates to patent approval and waivers from the Chinese government.
CATL has aggressively ramped up its submission of patent applications in recent years, according to a review of business records conducted by the intellectual property research firm Pellegrino and Associates and obtained by the Washington Examiner. This figure is suspect, according to the analysis, given that 66% of CATL’s total patents were granted between 2022 and 2024, with the firm’s top 25 inventors accounting for roughly 40% of its patents in 2023. One inventor was listed on almost 1,400 patents granted in 2023, which would require nearly four inventions per day. If accurate, it would make CATL’s researchers among “the most prolific in human history.”
Further complicating things, a large number of CATL’s patents were granted by China, which has a less stringent application process and grants intellectual protection on a shorter timeline than the U.S., according to the analysis. The Chinese government granted some patents to CATL in under 100 days. Beijing has shown that it is willing to give privileged treatment to CATL, showering it with billions in subsidies and tax abatements while granting it preferential access to government contracts and entering into strategic partnerships with the firm.
CATL has also received waivers from the Chinese government, exempting it from the standard disclosure requirements associated with listings on the Hong Kong stock exchange. That means investors will be forced to rely on the lower-quality disclosure requirements in mainland China.
Members of Congress have raised red flags about IPOs such as CATL’s, arguing that, by giving Chinese military-linked firms access to U.S. capital markets, U.S. retirement dollars effectively fund the CCP.
BEIJING-LINKED GROUPS FUND OPPOSITION TO AGRICULTURE BILL IN MOVE THAT COULD BOOST CHINA
“We are currently letting Chinese companies list on our stock exchanges without complying with [U.S. disclosure requirements], like every American company is doing,” former USPTO Patent Public Advisory Committee Chair Suzanne Harrison and intellectual property expert Peter Harter told the Washington Examiner. “We are allowing Chinese companies to use US banks, law firms and accounting firms to use their credibility to make investors feel safe investing in these companies. In reality, these deals are fraught with accounting irregularities, rule of law issues and massive geostrategic risk that has not been adequately addressed or priced. Many ETF’s rely on the investment banks to do the diligence on such opportunities and it just isn’t happening. Therefore, American retirees’ assets are at risk in these deals, as the banks have no fiduciary duty.”
CATL, Kirkland & Ellis, the Treasury Department, and Tesla did not respond to requests for comment. J.P. Morgan and Bank of America declined to comment.