AutoBeta(AutoBeta.net)06/09 Report--

On June 7, the website of the U.S.-China Special Committee on Strategic Competition disclosed a bill co-sponsored by the chairman of the special committee, John Mullerner (John Moolenaar), and other members of the House of Representatives. The bill, called the Foreign hostile Battery dependence Act, would prohibit the U.S. Department of Homeland Security from purchasing batteries from six Chinese battery companies, including Ningde Times, BYD, Guoxuan Tech, Vision Energy, Yiwei Lithium Energy, and Haichen Energy Storage. It also hopes to promote decoupling from US geopolitical rivals in the supply chain.

The above-mentioned Chinese battery companies have the highest market share in the field of power or energy storage batteries in the world, and as of press time, the relevant companies have not responded to related issues.

The Defense Authorization Act for fiscal year 2024 passed by the US Senate and House of Representatives in December 2023 will prohibit the US Department of Defense from purchasing batteries made by the above-mentioned six Chinese battery companies, which has been signed by US President Joe Biden and will take effect in October 2027.

At that time, Yiwei LiNeng and Guoxuan Tech responded that the ban was mainly aimed at the core battery supply of the US Department of Defense, restricted the procurement of batteries for the military side of the Department of Defense, and had no impact on private commercial cooperation. The two companies did not supply goods to the US Defense Department military and had no related cooperation plans, so they had no impact on the company.

On Thursday, five US Republican lawmakers jointly wrote to the Department of Homeland Security, demanding that Ningde Times and Guoxuan Tech be added to the list of so-called "Uighur forced labor" entities and ban the products of the two companies from entering the United States. Affected by the news, Ningde Times shares fell 5.66% to close at 193.2 yuan per share, while Guoxuan Hi-Tech shares fell 2.13% to close at 19.28 yuan per share.

On June 7, the Ningde era issued a statement in response that members of the United States Congress accused the Ningde era of being associated with forced labor, which was groundless and completely wrong. Ningde Times said in a statement that the company's business relations with some of the suppliers mentioned in the letter have long been terminated, and its business relations with other suppliers are also conducted with different subsidiaries. There is absolutely no forced labor or any violation of applicable laws and regulations in the United States. In addition, there are some companies from which Ningde era has never purchased any products, and the information quoted is completely wrong. The Ningde era strictly abides by all laws and regulations applicable to the operation and conduct of business activities in the United States. Ningde Times said that the Ningde era established strict internal procurement controls to ensure full compliance with all applicable requirements. At the same time, the audit toolkit "CREDIT" is also deployed to assess the sustainable performance of enterprises throughout the battery supply chain in order to promote global energy transformation and green development.

Ningde Times is the world's largest power battery manufacturer, accounting for 1/3 of the total global power battery share, the main partners include BMW, Mercedes-Benz, Tesla, Volkswagen and so on. Chinese enterprises are the major power battery producers in the world, with an overall market share of more than 60%. According to the latest data released by South Korean research institute SNE Research, the number of batteries installed in electric vehicles registered worldwide from January to April 2024 is about 216.2GWh, an increase of 21.8% year on year. Among them, Ningde Times is the only battery manufacturer with a share of more than 30%, up 31.9% from a year earlier, ranking first with a significant advantage.

Previously, the Ningde era also licensed technology to Ford, and the two sides planned to build a battery factory in Michigan. Ford owns the new factory, while Ningde Times provided preparatory construction and operation services. but since the Ford-Ningde era cooperation project was announced, US Republicans have been investigating the Ford battery plant plan, fearing it may promote the flow of US tax subsidies to China. And make Ford dependent on technology from China. Industry insiders said that the products exported to the United States in the Ningde era were mainly energy storage, and there were no more physical list details, but there must be a public opinion crackdown on China's dominant industries before and after the US election.

Guoxuan Hi-Tech also responded that the company has always adhered to the values of respecting human rights and protecting the rights and interests of employees, and that the selection of partners is also based on strict audit mechanisms and evaluation criteria. Any allegations about the use of forced labor or related to forced labor by Guoxuan Tech are groundless and absolutely wrong.

For Guoxuan Tech, its layout in the United States is also more in-depth. Earlier, Guoxuan Tech plans to build a plant for 10GWh lithium-ion battery packs and 40GWh lithium-ion battery batteries in Illinois, as well as a $4.364 billion battery cathode material project in Michigan, but the project is also under scrutiny.

In addition to the ban, the US government announced last month that it would sharply raise tariffs on imports of lithium batteries from China. The tariff rate on Chinese automotive lithium batteries will be raised from 7.5% to 25% this year, and from 7.5% to 25% for non-automotive lithium batteries by 2026. Listed companies such as Yiwei LiNeng, Guoxuan High Tech and Funeng Technology have all responded to the potential impact of imposing tariffs, saying that they do not export battery products directly to the United States or account for a relatively small proportion, which will not have a significant impact on the company's business for the time being. Ningde Times did not make a statement on this.

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