CATL, a leading Chinese battery supplier, has restructured the shareholdings of two key executives to avoid potential regulatory hurdles in the United States. This move is aimed at preventing a “Foreign Entity of Concern” (FEOC) designation under the Inflation Reduction Act (IRA).
The company cited the need to adapt to evolving internal and external dynamics, enhance decision-making capabilities, and promote sustainability. However, industry analysts suggest that the restructuring may also be driven by a desire to qualify for tax incentives available under the IRA.
Before the restructuring, CATL faced the risk of being labeled an FEOC due to its ties to the Chinese government. To comply with IRA requirements and secure tax incentives, CATL is distancing itself from governmental associations. This move is crucial for CATL’s partnerships with major US automakers like Ford, with whom they are collaborating on a significant battery production facility in Michigan.