Nio Inc (NYSE: NIO) has strongly responded to the US Department of Defense’s (DOD) decision to add it to the „Chinese military companies“ list.
The company said on Tuesday that the decision is unjustified and threatened to take legal action if necessary.
The Chinese EV pioneer said in a statement that it is not a Chinese military company, nor is it a military-civil fusion contributor to the Chinese defense industrial base.
Nio also sought to reassure investors, clarifying that the roster is not a sanctions list.
US government procurement limitations tied to the list will not have any impact on the company’s daily business operations, Nio said.
Furthermore, inclusion on the list does not restrict investors from transacting in the company’s securities, the company added.
Nio said it will proactively engage with the DOD to correct this inclusion, taking legal action if necessary to protect the interests of the company and its shareholders.
The DOD accused top Chinese firms, including BYD (HKEX: 1211) and Nio, of supporting the Chinese military. This decision doubles down on America’s previous stance of treating the crown jewels of corporate China as national security threats.
Under Section 1260H of the US National Defense Authorization Act, the Pentagon designated a raft of Chinese enterprises as „Chinese military companies.“
The list was briefly published in February this year but was withdrawn minutes later without any explanation.
In the document, the Pentagon claimed that Nio is directly and indirectly affiliated with China’s SASAC (State-owned Assets Supervision and Administration Commission).
The filing also noted that Nio is a military-civil fusion contributor affiliated with the Ministry of Industry and Information Technology (MIIT).
For BYD, the Pentagon provided a similar rationale, noting that it resides in a military-civil fusion enterprise zone.
With this move, the US has now declared that China’s most prominent EV makers are aiding the country’s armed forces.
John McEntee, a former senior Trump White House official who lobbies for Tencent Holdings (HKEX: 0700), criticized the decision. He said that expanding the list to car companies like BYD and Nio reveals how ridiculous the justification is, according to a Bloomberg report.
McEntee added that, by the Pentagon’s logic, Ford and General Motors should also be classified as American military companies.
The addition of these enterprises signals that Washington’s focus is shifting from the traditional defense industry to emerging commercial technologies.
Beyond automakers, the list also hits a broad swath of the EV supply chain and key component suppliers. Battery makers CATL (HKEX: 3750), CALB (HKEX: 3931), and Eve Energy (SZSE: 300014) were also included.
Key hardware suppliers for autonomous driving technology were similarly not spared from the Pentagon’s latest scrutiny. LiDAR manufacturers Hesai Group (NASDAQ: HSAI) and RoboSense (HKEX: 2498) both appeared on the updated roster.
