JPMorgan, Bank of America underwrite CATL IPO despite Pentagon military designation

Three of Wall Street’s biggest names helped a Chinese battery manufacturer raise billions from global investors, months after the Pentagon slapped the company with a “Chinese military company” label. Congress would like to know why.

A new report from the House Select Committee on the Chinese Communist Party alleges that JPMorgan Chase and Bank of America served as book-runners for CATL’s Hong Kong secondary listing, which raised approximately $5.2 billion in May 2025. Morgan Stanley reportedly participated in a subsequent offering. All of this happened after the US Department of Defense designated CATL under its Section 1260H list of Chinese military-linked firms on January 7, 2025.

Congress warned them. They did it anyway.

On April 17, 2025, House Select Committee Chairman John Moolenaar urged JPMorgan and Bank of America to withdraw from the IPO. The letter explicitly flagged national security risks tied to CATL’s operations, including the company’s supply-chain connections with the Xinjiang Production and Construction Corps, an entity sanctioned under the Uyghur Forced Labor Prevention Act.

The banks proceeded anyway. CATL’s Hong Kong listing went ahead in May, becoming one of the largest secondary offerings of the year.

By July 2025, the committee escalated. Subpoenas were issued to both JPMorgan and Bank of America after the banks failed to comply with document requests regarding their due diligence on the deal.

CATL’s position in the global market

CATL, or Contemporary Amperex Technology Co. Limited, is the world’s dominant electric vehicle battery manufacturer, supplying cells to virtually every major automaker on the planet. Tesla, BMW, Hyundai, and Ford have all sourced batteries from the company at various points.

The Section 1260H designation doesn’t technically prohibit US banks from doing business with listed companies. It’s not a sanctions designation in the traditional sense. The list was created to increase transparency about Chinese firms with alleged military ties, not to impose outright transaction bans.

CATL’s links to Xinjiang add another layer of toxicity. The Uyghur Forced Labor Prevention Act, signed into law in 2021, creates a rebuttable presumption that goods produced in the Xinjiang region involve forced labor. The committee’s report alleges CATL maintains supply-chain connections with the Xinjiang Production and Construction Corps, which is specifically sanctioned under the act.

What this means for investors

Congressional subpoenas are not something banks shrug off. If the investigation reveals that due diligence was insufficient, or worse, that internal compliance teams raised red flags that were overridden by deal teams chasing fees, the fallout could extend well beyond this single transaction. It could reshape how Wall Street approaches any deal involving a Section 1260H-listed company.

Investors in EV and battery technology should be watching the regulatory trajectory closely. If Congress moves to expand restrictions on US financial institutions’ involvement with 1260H-listed companies, the capital-raising landscape for Chinese tech firms could tighten significantly. CATL’s competitors, particularly South Korea’s LG Energy Solution and Samsung SDI, could benefit from a reallocation of institutional capital away from Chinese suppliers.

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