The Department of War added electric car company BYD to its list of “Chinese military companies,” meaning the Shenzhen-based manufacturer will lose out on future Pentagon contracts.
The list, updated on Monday, now includes e-commerce giant Alibaba and search engine Baidu, China’s Google equivalent. The inclusion of BYD comes as the automaker looks to capitalize on positive consumer sentiment and break into the North American market.
The Pentagon said that BYD is “directly and indirectly affiliated” with China’s State-owned Assets Supervision and Administration Commission of the State Council and is “indirectly affiliated” with the Ministry of Industry and Information Technology.
The Pentagon’s published list further describes BYD as a “military-civil fusion contributor to the Chinese defense industrial base because it is affiliated with MIIT and because it resides in or is affiliated with a military-civil fusion enterprise zone.” A Pentagon spokesperson declined to provide further details on those claims.
BYD edged out Tesla to become the dominant global electric vehicle manufacturer in 2025. The company sold 2.26 million vehicles that year, a 28% increase from 2024. Tesla managed 1.64 million sales.
The entry-level BYD Seagull is not available in the United States, though it is set to launch in Canada by the end of the year for $25,000 Canadian dollars, roughly $18,000. Tesla’s Model 3, meanwhile, starts at just under $37,000.
Ottawa and Beijing reached a trade agreement in January to slash the country’s tariff on imported Chinese electric vehicles from 100% to 6.1%. Canada will allow 49,000 such cars onto its roads each year.
Strong consumer sentiment has American automakers and politicians on the defensive. One trade group told the Trump administration in March that BYD vehicles “pose a direct threat to America’s global competitiveness, national security and automotive industrial base.”
“The only thing that terrifies me is BYD,” said Rep. Don Beyer (D-VA), a former chairman of the American International Automobile Dealers Association, at a May event in Washington, D.C. “The fact that it’s so inexpensive would destroy every other car company’s investment in electric vehicles.”
In an attempt to get ahead of their Chinese competition, Ford announced in August 2025 that it would bring a $30,000 midsize electric pickup truck to the American market by 2027.
President Donald Trump previously expressed a willingness to allow BYD to sell its vehicles in the U.S.
“If they want to come in and build the plant and hire you and hire your friends and your neighbors, that’s great,” Trump said at a January meeting of the Detroit Economic Club. “I love that. Let China come in, let Japan come in. They are, and they’ll be building plants, but they’re using our labor.”
“As we said at the time in public statements, while we are always looking for more investment into the United States, we are never going to compromise on national security,” a White House spokesperson told the Washington Examiner when asked about the Pentagon’s recent policy move.
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BYD also faces an uphill battle on Capitol Hill, where lawmakers have introduced legislation to restrict the importation of Chinese electric vehicles and solidify data collection requirements.
The Washington Examiner reached out to BYD and the Chinese Embassy for comment.