CATL Shares Drop After U.S. Lawmakers Call for Import Ban

By Jiahui Huang

Contemporary Amperex Technology's shares fell sharply on concerns that the Chinese maker of batteries for electric vehicles risks an import ban in the U.S. amid alleged labor violations.

Shares of the Shenzhen-listed company dropped 5.6% to 193.41 yuan ($26.70) on Friday afternoon, on track for their biggest one-day drop since October 2022.

On Thursday, some Republican lawmakers in the U.S. called for the addition of CATL to the entity list under the Uyghur Forced Labor Prevention Act, which designates businesses the U.S. believes are involved in the use of forced labor from China's Xinjiang region.

"CATL has widespread upstream connections to several key lithium compound and cathode material suppliers that have potential forced labor risks in their supply chains," the lawmakers, led by Rep. John Moolenaar, Rep. Mark Green and Sen. Marco Rubio, wrote in a letter to Department of Homeland Security Undersecretary Robert Silvers dated June 5.

CATL didn't immediately respond to requests for comment.

The battery manufacturer is the most recent in a series of Chinese companies that U.S. lawmakers have sought to ban.

Companies including Chinese contract drugmaker WuXi AppTec and its affiliates and China-linked biotechnology companies have been facing U.S. scrutiny over their alleged ties with the Chinese government.

Analysts said CATL's shares are likely to face short-term pressure but added that the battery maker's exposure to the U.S. isn't very significant.

"The overall impact on CATL would be limited as its exposure to the US market is low (less than 10% of its total battery shipment in 2023)," Citigroup analysts led by Jack Shang said in a note.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

June 07, 2024 02:51 ET (06:51 GMT)

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