This is why we dont buy Chinese stocks: Pentagon to blacklist China’s largest EV battery and tech firms

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From Bloomberg:

The U.S. Department of Defense has added Tencent Holdings and CATL to its blacklist of companies allegedly linked to China’s military, causing Tencent’s U.S.-listed shares to drop nearly 10%. This move is part of the Pentagon’s “Section 1260H list,” which now names 134 firms believed to support China’s military-civil fusion strategy, where civilian tech is leveraged for military purposes.

Tencent, known for WeChat and major gaming investments, has denied the allegations and plans to work with U.S. authorities to clear up what it calls a misunderstanding. Similarly, CATL, a key supplier of EV batteries to Tesla, Ford, and BMW, refuted the claims, calling their inclusion a mistake and stating they have no involvement in military activities.

While the designation doesn’t impose immediate sanctions, it signals increased risk for U.S. investors and partners. Companies previously added to this list, like DJI, have faced serious business disruptions, including bans and reputational hits.

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Both Tencent and CATL are expected to challenge the decision, but this adds to the ongoing tensions between the U.S. and China. Investors should keep an eye on this situation as it could impact these stocks and broader U.S.-China market relations.

MSN:

The Pentagon will blacklist China’s largest EV battery manufacturer and its largest tech firm beginning in June 2026, barring them from Defense Department contracts and sending a powerful signal to American firms about the potential risks of doing business with them.

In a notice in the Federal Register on Monday, the Defense Department published a list of firms that it deems to be operating in the United States for, or on behalf of, the Chinese military or that contribute to China’s military buildup.

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The “1260H list,” mandated annually by Congress since 2021, now includes CATL, the world’s largest electric-vehicle battery-maker, which supplies Tesla, the EV manufacturer owned by President-elect Donald Trump’s ally Elon Musk. It also lists the social media giant Tencent, China’s most valuable technology company.

Federal Register:


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