US opens investigation into Tesla rival BYD’s connections to the Chinese Communist Party

The House Homeland Security Committee has launched a formal investigation into BYD, the Chinese electric vehicle manufacturer that overtook Tesla in global EV sales last year.

The committee, according to Bloomberg, has requested that BYD submit a wide range of internal documents to examine whether the company’s ties to the Chinese Communist Party is a threat to US national security.

The letter, sent directly to Stella Li, head of BYD’s US operations, and Patrick Duan, the co-CEO, calls for a full breakdown of the company’s structure, cybersecurity protocols, and its American activities.

Lawmakers are focused on BYD’s presence in the electric bus market, especially as its vehicles continue to operate in multiple American public transportation systems.

The committee described the growing use of these buses as a potential channel for foreign data exposure, surveillance, and backdoor access to US networks, said Bloomberg.

Lawmakers push for full transparency on BYD’s US footprint

The investigation zeroes in on BYD’s rebranded US bus business, RIDE, which the company spun off in 2023. Even though RIDE is based in America, it is still entirely owned by BYD, which is headquartered in China.

That status makes RIDE legally subject to Chinese national security laws, and lawmakers argue that it obligates the company to cooperate with Chinese intelligence agencies if asked. That point was clearly stated in the committee’s letter.

Carlos Gimenez, the Florida congressman who chairs the subcommittee on transportation and maritime security, said in a statement, “The Chinese Communist Party is our greatest adversary, and we must identify and mitigate threats posed by companies under its influence.”

He also described the probe as “a necessary step toward decoupling from entities that compromise our national security.”

The list of requested materials is extensive. The committee is demanding records of every US contract, tax incentive, grant, and loan awarded to BYD or RIDE since 2018.

Chinese EV maker’s rise triggers national security concerns

BYD began as a manufacturer of lithium-ion batteries for gadgets. It later expanded into cars, buses, and tech manufacturing, including making Apple’s trackpad at its plant in Vietnam. Today, BYD has announced or launched factories in at least ten countries, trying to grow internationally while reducing dependency on Chinese production hubs.

In 2023, BYD briefly outsold Tesla in pure electric vehicle sales, pushing it into the spotlight. Despite US concerns, the company kept building its footprint.

In 2013, BYD opened a bus factory in Lancaster, California, and since 2014, it has spent over $1.7 million lobbying California officials on clean-air laws, gas tax policies, and state subsidies for zero-emission vehicles, according to Bloomberg.

In 2024, BYD received a $30 million grant from California to expand its school bus production at the Lancaster site.

The committee’s investigation comes while Washington is taking a broader look at other Chinese firms too. Huawei Technologies, the developer of the HarmonyOS mobile system, was recently flagged by the House Select Committee on China.

Members called on the Biden administration to dig into the system’s architecture and codebase. Huawei remains on the Commerce Department’s Entity List and the FCC’s Covered List, which identifies tech deemed risky to US security.

Earlier this year, the House passed two bills aimed at reducing Chinese influence in the American supply chain. One would bar government agencies from buying batteries from six Chinese companies tied to the Chinese Communist Party.

The second demands a deeper investigation by the Department of Homeland Security into Chinese-linked identity theft, illegal border activity, and influence operations inside the US.

Both of those bills are currently sitting with the Senate.

The House Homeland Security Committee has given BYD a June 9 deadline to hand over the requested records. As of now, no confirmation has come from the company.