Senators question $200M to battery company
WASHINGTON — Senators from both sides of the aisle on Thursday questioned the Biden administration’s decision to award a $200 million grant to a Texas-based battery manufacturer over its ties to China.
Stafford-based Microvast is planning to build a battery plant in Tennessee in partnership with U.S. carmaker General Motors but currently produces batteries at a plant in China.
At a hearing of the Senate Energy and Natural Resources Committee, Sen. John Barrasso, R-Wyo., questioned whether the grant would benefit the Chinese battery industry, pointing to a 2021 filing with the U.S. Securities and Exchange Commission in which Microvast said that “we may not be able to protect our intellectual property rights in the People’s Republic of China.”
In order to operate in China, foreign companies are often required by the government there to share their technology with Chinese businesses.
Sen. Joe Manchin, D-W.Va., chairman of the committee, asked Deputy Energy Secretary David Turk what steps the administration was taking to protect U.S. energy interests.
“You know our concern with China, and the economic war they’re waging on us,” Manchin said.
The controversy around Microvast comes at a time of rising tensions between the United States and China, with the Biden administration looking to reduce reliance on Chinese manufacturing chains in areas such as clean energy and computer chips.
The grant to Microvast was supposed to aid that effort, but the company has come under increasing scrutiny in recent months over its relationship with the Chinese government.
Turk said the Energy Department was still conducting due diligence on Microvast and that the $200 million grant had yet to be given to the company. He added that the “vast majority” of the world’s batteries were produced in China.
“We’re in a hole right now,” he said of the United States. “I’m
proud we have been given the tool belt to get our act together and onshore and reshore that production.”
A spokesperson for Microvast declined to comment.
The questioning follows an attack on the Biden administration by House Republicans late last year, in which they accused officials of supporting “pro-China policies,” pointing to the grant to Microvast as well as a report from the Department of Commerce that found that Chinese companies were circumventing U.S. tariffs on solar panels by running their supply chains through Cambodia, Malaysia, Thailand and Vietnam.
After the hearing, Manchin told reporters he was worried that Chinese interests might own some portion of Microvast, even if the company had so far passed government scrutiny. “They probably met on paper the requirements saying whether they’re a minority this and that,” he said. “We have to find out. That’s being done, (to see) if they’re maneuvering in order to take advantage of American taxpayers supporting (Chinese) technology.”
Last year, Microvast disclosed that the SEC had found the company in violation of the Holding Foreign Companies Accountable Act for using Chinese auditors that could obscure the company’s financial records from U.S. regulators. The 2020 law requires companies to declare that they are not owned or controlled by the Chinese government.
Asked about the questions around Chinese influence on the company last year, Shane Smith, Microvast’s chief operating officer, said in a statement that the company “is and has always been headquartered in Texas.”
“Microvast is leading the charge to secure domestic battery production,” he wrote, “which will strengthen our country’s manufacturing base and reduce reliance on Chinese manufacturers.”