Pentagon Blacklist Spreads to EV Industry, BYD and Nio Affected

JAKARTA - The United States Department of Defense (Pentagon) has updated the list of companies categorized as "Chinese military companies" in the Section 1260H List. A number of big names from the electric vehicle, battery, and technology sectors are included in the latest list, including BYD, Nio, and CALB.

In addition to the three companies, the list scheduled to be published through the Federal Register this week also lists Alibaba, Baidu, EVE Energy, Hesai, RoboSense, WuXi AppTec, TP-Link, to the robotics company Unitree. This step expands the scope of the list which previously focused more on the defense and telecommunications sectors.

The entry of Unitree is of particular concern after Nvidia announced its cooperation with the company in early June. Meanwhile, EVE Energy is known as a battery supplier for a number of global automotive manufacturers such as Tesla, BMW, and Mercedes-Benz.

In the same update, the Pentagon also removed several entities from the previous list, including CNOOC China Ltd and CNOOC International Trading, which have links to China National Offshore Oil Corporation.

However, inclusion on the list does not automatically trigger sanctions against the companies concerned. However, this status has the potential to limit future US government procurement opportunities and may complicate business relations with US partners, especially those related to defense supply chains, capital markets, and government contracts.

Companies on the list also have the right to apply for removal to the Pentagon. Based on Defense Department documents quoted from CarNewsChina, Tuesday, June 9, the Pentagon said BYD has direct and indirect affiliations with the China State-owned Assets Supervision and Administration Commission (SASAC), as well as indirect links with the Ministry of Industry and Information Technology China (MIIT).

The Pentagon also assessed BYD as a contributor to military-civilian fusion due to the relationship and its presence in the region associated with the military-civilian fusion program. For Nio, the Pentagon stated that the electric vehicle manufacturer has direct and indirect ties to SASAC and is considered to contribute to the military-civilian fusion program through its affiliation with MIIT.

Interestingly, both companies still have business footprints in the United States. BYD has been operating an electric bus production facility in Lancaster, California, since 2014 after announcing the project a year earlier.

The factory was then expanded to have an area of more than 500,000 square feet. Meanwhile, Nio in its 2026 ESG report named San Jose as one of its global research and development centers, along with other facilities spread across China, Europe, Singapore, and Abu Dhabi.

In addition to BYD and Nio, the Pentagon also included EVE Energy, Hesai, RoboSense, and Unitree on the list. EVE Energy is said to have ties to SASAC and received government support through the China Single Champion program.

CALB, which is also on the list, is one of the largest electric vehicle battery manufacturers in China. The company supplies batteries for brands such as Xpeng, Leapmotor, GAC, Mazda, Changan, and Deepal.

The 1260H List update shows the US government's expanded focus on various strategic Chinese technology sectors, ranging from electric vehicles, batteries, artificial intelligence, robotics, biotechnology, semiconductors, solar energy, to lidar technology. Washington argues that these companies have the potential to support China's military-civilian fusion strategy.

It should be noted, the 1260H List is different from the Entity List of the US Department of Commerce and the US Department of the Treasury's sanctions list. The inclusion of a company on the Pentagon's list does not automatically prohibit its operations in the United States, but it can increase legal and reputational risks and open the door to the emergence of additional restrictions in the future.

This latest move also recalls a February incident when the Pentagon briefly published a similar list that included Alibaba, BYD, Baidu, and TP-Link, before later withdrawing it just minutes after it was published without an official explanation.