Heard on the Street: Asia's Battery Makers Have a Lot Riding on the U.S. Election -- WSJ

Dow Jones06-07

By Stephen Wilmot

President Bidens latest tariffs havent ended the debate about the spread of Chinese clean-energy technology in America.

Shares in Contemporary Amperex Technology $(CATL.UK)$, the worlds largest battery maker and sector bellwether, fell almost 6% on Friday, their worst day in close to two years.

The apparent trigger was a letter published by a group of Republican lawmakers calling for a ban of CATL's products and those of a smaller Chinese manufacturer called Gotion High-Tech. They cited links with forced labor.

An outright ban would be a bigger challenge for CATL and its peers than the tariffs announced by the White House last month, which included a 25% rate on lithium batteries as well as an eye-catching 100% rate on electric vehicles.

Behind the headlines, President Biden has tried to please China hawks and the clean-energy lobby alike, combining restrictions on the Chinese supply chain with targeted loopholes for products that cant be quickly sourced elsewhere.

For example, while most of the new tariffs take effect this year, batteries used in energy storage systemsan area where the U.S. is heavily reliant on Chinese importswill be exempt until 2026. This helps explain why investors took the earlier news in their stride, sending CATLs shares down just 2% last month.

The Republicans letter hints at how Washingtons approach could tighten under a different administration, even if an outright ban proves impractical.

A further clampdown on Chinese imports would energize efforts to bring the technology onshore. Ford plans to license CATL's technology to make low-cost batteries in the U.S.

The restrictions are also helpful for Chinas rivals. Shares of Korean battery supplier LG Energy rose 2% Friday.

Washington seems unified in worrying about Chinese technology, but not in what to do about it. Add battery makers to the list of companies with a lot riding on the U.S. election.

This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).

(END) Dow Jones Newswires

June 07, 2024 11:00 ET (15:00 GMT)

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Heard on the Street: Asia's Battery Makers Have a Lot Riding on the U.S. Election -- WSJ

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