The Billion-Dollar Gamble: JPMorgan and Bank of America Bet on CATL Amid a Geopolitical Firestorm

In the high-stakes world of finance, few deals encapsulate the tension between profit and principle better than JPMorgan Chase and Bank of America’s role as lead underwriters for Contemporary Amperex Technology Co. (CATL), the world’s largest electric vehicle battery maker. As CATL’s $4.6 billion Hong Kong IPO debuted in early 2025, the banks faced an unprecedented dilemma: back a company central to the EV revolution—or abandon it due to accusations of ties to China’s military and human rights abuses. Their decision, to proceed, highlights a stark reality: in the era of U.S.-China tech rivalry, financial incentives often outweigh national security risks—even when the stakes are existential.

The Geopolitical Tightrope

The U.S. House Select Committee on China, led by Rep. John Moolenaar, has accused CATL of being a “Chinese military company,” citing its inclusion on the Pentagon’s list of entities linked to China’s defense modernization. The committee’s April 2025 letters to JPMorgan CEO Jamie Dimon and Bank of America’s Brian Moynihan warned of reputational and legal risks, alleging CATL supplies batteries for Chinese military submarines and engages in forced labor in Xinjiang. Yet both banks doubled down, citing CATL’s civilian focus and adherence to U.S. sanctions rules.

The calculus here is clear: CATL’s $200–300 million in underwriting fees represent a windfall for JPMorgan and BofA. But the risks are monumental. shows its Hong Kong shares spiked 18% on debut before retreating to a 12% year-to-date decline by April 2025—a volatility that underscores investor skepticism amid geopolitical headwinds.

Why the Banks Went All In

The banks’ stance hinges on two pillars: market opportunity and legal compliance. CATL, with a 38% global EV battery market share, is indispensable to automakers like Volkswagen, BMW, and Stellantis. Its growth is tied to the $1.2 trillion global EV market, which is expected to expand at a 22% annual clip through 2030. For underwriters, missing out on a deal this sizeable could mean losing credibility with clients in one of the hottest sectors.

Legally, CATL isn’t on U.S. sanctions lists—a loophole critics call “dangerously narrow.” The company denies military ties, emphasizing its role in civilian EVs and partnerships with Western automakers. JPMorgan and BofA argue they’re operating within a regulatory gray area, even as the House committee insists U.S. banks should “avoid enabling CCP-linked entities.”

The Broader Bet: China’s Tech Dominance vs. U.S. Backlash

This isn’t just about CATL. It’s about the battle for control of advanced technologies—from EV batteries to semiconductors—that will define the 21st-century economy. The U.S. has weaponized sanctions and export controls to curb China’s rise, but companies like CATL are outpacing rivals. reveals why these banks are doubling down: their Asia-Pacific investment banking fees rose 40% in 2024, fueled by deals like CATL’s.

Investors, too, are betting on CATL’s growth. Despite the Pentagon’s warnings, its Hong Kong IPO was oversubscribed, with cornerstone investors like Sinopec and the Kuwait Investment Authority committing $2.6 billion. The message? Fear of missing out (FOMO) trumps fear of geopolitical fallout—until it doesn’t.

The Write-Off Risk—and Why It’s Overblown

Critics warn that CATL’s DoD designation could lead to U.S. divestment or secondary sanctions. Yet CATL’s clients are global, not U.S.-exclusive. Even if Washington cracks down, automakers reliant on CATL’s scale and innovation will push for loopholes. Meanwhile, shows its dominance is unmatched.

The real risk? Missing out on a company that could eclipse Tesla in battery tech. CATL’s $5.3 billion IPO proceeds will fund factories in Europe and Indonesia, cementing its lead in a sector where scale is king.

The Bottom Line: Act Now—or Be Left Behind

JPMorgan and Bank of America have placed their bets, and investors should too. CATL’s IPO isn’t just a stock—it’s a proxy for the EV revolution. Yes, geopolitical risks linger, but they’re priced into the stock. With shares down 12% year-to-date, now is the time to buy.

The banks’ gamble signals a truth Wall Street won’t admit: in the U.S.-China cold war, profit will always trump principle—until the principles blow up. For now, the odds favor CATL.

Act fast. The next trillion-dollar bet won’t wait.