Tesla and CATL: Navigating Tensions Amid U.S. Military Ties

Washington has added CATL to a list of firms linked to China's military, which could affect Tesla's dealings with it. Despite the military designation, Tesla plans to maintain its partnership with CATL due to its strategic importance in China, as CATL is a major battery supplier to Tesla's Shanghai factory.


Devdiscourse News Desk | Updated: 08-01-2025 04:30 IST | Created: 08-01-2025 04:30 IST
Tesla and CATL: Navigating Tensions Amid U.S. Military Ties
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Washington's recent addition of CATL to a list of firms allegedly collaborating with China's military poses potential challenges for Tesla founder Elon Musk. The designation, although not directly restricting business, casts a shadow over CATL's reputation. CATL, a major lithium iron phosphate battery supplier, significantly contributes to Tesla's Shanghai manufacturing operations.

Despite potentially severe political implications, analysts believe Tesla will uphold its partnership with CATL. The collaboration is crucial for Tesla's coherence with the Chinese government, outweighing potential U.S. political ramifications. The U.S. Treasury Department faces pressure for implementing sanctions following the Department of Defense's designation.

Plans are underway for Tesla and CATL to license battery technology for production in Nevada by 2025 while increasing battery supplies to meet growing Megapack demands. As tensions rise, Musk's rapport with President Trump may offer Tesla a waiver against impending restrictions related to the military company list.

(With inputs from agencies.)

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