Beijing-backed green energy firm is expanding in US, posing serious national security risk: report

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The Chinese government is leveraging green energy companies in an effort to create technological dependencies and "achieve strategic, political, and intelligence advantages" over the U.S., according to a sprawling new report.

The report — published Monday by the Foundation for Defense of Democracies (FDD), a nonpartisan national security research institute — focuses particularly on the rapid ascent of Fujian, China-based electric vehicle (EV) battery maker Contemporary Amperex Technology (CATL). With the support of China's government, CATL dominates the global EV battery industry and has gained a substantial foothold in the U.S. market.

"CATL’s reach, which has grown through its strategic acquisitions and partnerships with Western automakers and utility companies, amplifies these fears. These connections serve as potential access points for intelligence collection, cyber espionage, and sabotage," the report states.

"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," it continues. "Furthermore, the company could execute a shut-down of EV charging networks or even disable targeted vehicles through hardware infiltration."

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CATL CEO Robin Zeng presents plans for the construction of a factory. (Paul Zinken/picture alliance via Getty Images)

According to the FDD report, CATL, which is closely linked to the Chinese Communist Party (CCP), is, in addition to batteries and EV charging infrastructure, developing power storage stations — projects designed to store electricity in industrial-scale batteries during times of high renewable energy supply — in conjunction with American utility companies. Such projects give the company direct access to the U.S. power grid.

"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," the report states. "In a worst-case scenario, an attack on these control systems could result in widespread blackouts impacting industrial centers or financial hubs."

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The report further recommends policies to address potential infrastructure and data security risks posed by CATL and other CCP-linked firms expanding in America. And it states that U.S. policymakers should scrutinize and potentially limit CATL’s joint ventures and partnerships with U.S. firms, imploring them to create stringent oversight protocols protecting Americans' data and sensitive U.S. technologies.

Overall, CATL, founded by Chinese billionaire Zeng Yuqun in 2011, provides the battery for one in three EVs worldwide, as of 2022. Since 2018, CATL has emerged as the single-largest mid-to-large-sized battery manufacturer for EVs, signing a major supply contract with Tesla and establishing partnerships with General Motors, Volkswagen, BMW, Volvo and other large automakers.

Ford CEO Jim Farley announces that his company will be partnering with the China-based company Contemporary Amperex Technology to develop an electric-vehicle battery plant in Marshall, Michigan, on Feb. 13, 2023. (Bill Pugliano/Getty Images)

Earlier this year, Ford Motor Company announced it would invest $3.5 billion to build a new EV battery plant in Marshall, Michigan, using services provided by CATL. The project earned the support of state Democrats, led by Gov. Gretchen Whitmer, but was heavily criticized by Republicans, former State Department officials and national security experts.

Ford abruptly put the project on pause late last month without providing a reason for the decision.

In addition, CATL storage batteries have already been installed at facilities in Florida, Virginia, Nevada and California, and at a solar farm on leased land inside a Marine Corps outpost in North Carolina, the report shows.

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"There's a lack of understanding about how these complex technologies work, and the Chinese are very keen to exploit subnational engagement to deepen their influence, and access, across the United States," Craig Singleton, the author of Monday's report and deputy director of FDD's China Program, told Fox News Digital in an interview.

"I think we need to take a step back and say, ‘Here are the suite and the range of potential vulnerabilities, are we comfortable with them — what can we possibly contain and implement and cauterize, and what can we not live with?’ And those conversations and assessments have to happen before these Chinese systems are deployed and pervasive across the United States," he continued.

China's President Xi Jinping arrives to attend an Asia-Pacific Economic Cooperation summit in Bangkok on Nov. 19, 2022. (Jack Taylor/Pool Photo via AP)

In the report, Singleton notes that CATL's revenue in the first three months of 2023 alone surged to $13 billion, compared to its full-year 2016 revenue of just north of $3 billion.

The company has achieved such staggering growth thanks in large part to the Chinese government granting it subsidies, tax incentives, favorable procurement deals and additional policy benefits, the report states. In 2017, CATL was listed by the Chinese Ministry of Industry and Information Technology on a so-called "white list" of approved battery manufacturers, giving it preferential access to government contracts and tax benefits.

CATL has also likely been buoyed by the fact that Zeng, the firm's founder and CEO, maintains an affiliation with the Chinese People’s Political Consultative Conference (CPPCC). According to a U.S. government report published in 2018, the CPPCC is a "critical coordinating body" that brings together representatives of Chinese interest groups and is led by the CCP’s Politburo Standing Committee.

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"At every step along the way, the Chinese Communist Party took care of this Chinese national champion to ensure it had the resources and the subsidies to build out its global footprint with the goal, explicitly, according to the 13th and 14th Five-Year Plan, to establish competitive advantages over the United States," Singleton told Fox News Digital. 

"I think it's the clearest example in recent memory of the Chinese directly intervening through industrial policy to shape a cutting-edge technology and quickly scaling that technology such that it has become the market champion. And none of that could have happened without direct support and intervention from the Chinese Communist Party."