JAKARTA - BYD has dismissed the decision of the United States Department of Defense (Pentagon) to include the company in the latest list of Chinese Military Companies. The electric vehicle manufacturer assessed that the designation had no solid basis and would not have a material impact on its business activities.
Reported by Carnewschina, Wednesday, June 10, the attitude was conveyed after the Pentagon released an update to the Section 1260H list which now includes 80 parent companies and 188 Chinese entities. The list was expanded to target the electric vehicle, battery, artificial intelligence (AI), and autonomous vehicle technology sectors.
In a voluntary disclosure published on June 9, BYD confirmed that the company is neither part of the Chinese military nor an entity involved in military-civilian fusion programs related to the country's defense industry.
BYD said it saw no justifiable reason for its inclusion on the list and stressed that the Pentagon's move was not a form of sanction. The company also ensured that the inclusion of BYD's name would not disrupt its normal business activities, trade relations, or securities trading.
According to BYD, restrictions related to procurement by the US Department of Defense will not have a significant impact on the company's operations. BYD even opened the possibility of going through the review process and legal channels to ask for its name to be removed from the list.
Nio also responded in a statement released on the Hong Kong Stock Exchange shortly after the Pentagon's list update was announced. The electric vehicle manufacturer confirmed that it is neither a Chinese military company nor part of a joint military-civilian program related to China's defense industrial base.
Nio said it would actively communicate with the US Department of Defense to request a correction to the status and did not rule out taking legal action to protect the interests of shareholders.
BYD and Nio's moves reflect a broader rejection of a number of Chinese technology and automotive companies affected by the Pentagon's latest policy. The latest Section 1260H list also expands the scope of surveillance beyond the automotive sector.
Chinese financial media reported that the expansion of the list includes various other strategic sectors, ranging from cloud computing, artificial intelligence, semiconductor manufacturing, to advanced robotics.
Unlike sanctions issued by the US Department of the Treasury or export control policies from the US Department of Commerce, the Section 1260H list does not automatically freeze assets, prohibit commercial transactions, or stop trading in the related company's shares.
Previously, the Pentagon argued that the companies on the list have direct or indirect ties to China's military industrial ecosystem or the country's military-civilian fusion program.
This latest decision comes amid increasing political pressure on China's automotive industry in the United States. In April, US Senator Elissa Slotkin even called Chinese-made vehicles a "cancer" for the global automotive industry and called for international support for a complete ban on Chinese-made vehicles.
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