The Pentagon's formal designation of BYD as a Chinese military company has renewed scrutiny of California Governor Gavin Newsom, who received $50,000 in campaign contributions from BYD's top American executive and awarded the company a $990 million no-bid state contract.
The Defense Department added BYD, alongside tech giants Alibaba and Baidu, to its official list of Chinese military companies on June 8, with the designation confirmed June 9 by NPR, ABC News, CNBC, and NBC News. The list now covers 188 firms, up from 134 in 2025. Under the classification, the Pentagon is barred from contracting directly with BYD beginning this month and from purchasing BYD products or services through third parties starting in June 2027. BYD rejected the classification in a statement, saying it "is not a military enterprise" and that the determination "seriously contradicts the facts."
For Newsom, the timing could not be more conspicuous. Ke Li, the president of BYD Americas, donated $50,000 to Newsom's 2018 and 2022 gubernatorial campaigns, according to state campaign contribution records reviewed by the Washington Free Beacon. Li, whom BYD has identified as a Chinese national, was among Newsom's notable corporate donors during the years he first won and then defended California's governorship.
The mask contract adds a further dimension. In April 2020, with states scrambling to secure scarce personal protective equipment, Newsom's administration awarded BYD a $990 million no-bid contract to supply California with surgical and N95 masks manufactured at BYD's factories in China, according to CalMatters. BYD had no prior history of producing masks. A subsequent extension pushed the total above $1 billion, PBS NewsHour reported. For weeks, Newsom's office refused to release the agreement despite demands from California lawmakers and press organizations. The Sacramento Bee editorial board called on the Legislature to use its subpoena power to obtain the contract. No formal disclosure or recusal by Newsom related to the deal has been reported.
BYD's financial ties to California Democratic politics extend well beyond the governor's campaigns. A January 2026 Washington Examiner investigation documented that BYD routed more than $80,000 to California Democrats, through direct donations and contributions from company executives, since 2018. That pattern accompanied BYD's steady commercial expansion in the state, including authorization in 2023 for state and local agencies to purchase BYD electric buses and contracts awarded by the city of Los Angeles. During a 2023 trip to China, Newsom publicly praised a BYD electric vehicle as a "preview of things to come" after test-driving a BYD YangWang U8 at the company's Shenzhen headquarters, according to Fox Business. Intelligence analyst Anders Corr told the Washington Free Beacon at the time that Beijing "seeks to compromise politically prominent individuals such as Newsom" and described the governor as "falling into all of these traps."
Legal Questions Mounting
The Pentagon designation landed the same day The Federalist published analysis of a National Association of Scholars report alleging that California's formal energy partnership with CCP-affiliated institutions may be illegal under the federal Supremacy Clause and may warrant a Department of Justice investigation. The arrangement was codified through Assembly Bill 39, signed by Newsom in 2021, which gave the California-China Climate Institute statutory backing and embedded it within the University of California system. The bill's effect, the scholars' report alleged, was to elevate California as an independent actor in international climate negotiations with China, bypassing federal oversight. When asked how the partnership avoided violating the Supremacy Clause, a spokesman for Newsom's office told The Federalist the agreement was "lawful and non-binding."
Newsom's office did not respond to requests for comment on the Pentagon's BYD designation or on the campaign contributions from Ke Li in light of the new classification. With Newsom widely viewed as a leading contender for the 2028 Democratic presidential nomination, the documented paper trail connecting him to a company now formally labeled a Chinese military affiliate is certain to draw sustained attention from Congressional Republicans and national security watchdogs. The most immediate marker comes later this month, when the Pentagon's direct contracting ban on BYD takes formal effect, keeping the spotlight on any continuing commercial relationships between California agencies and the Chinese electric vehicle maker.
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