Republican lawmakers slam U.S. subsidy to China-linked battery company

WASHINGTON, Dec 7 (Reuters) – Two senior Republican lawmakers on Wednesday sharply criticized the U.S. Energy Department’s decision to award Microvast Holdings (MVST.O) $200 million over ties to the lithium battery company with the Chinese government.

In October, Texas-based Microvast won a US$20 million grant from the department to help build a new electric vehicle battery component plant in Tennessee.

Rep. Frank Lucas, a senior Republican on the House Science Committee, said nearly 80% of Microvast’s assets are in China and 61% of its revenue in 2021 comes from China.

“Awarding funding to a company with known ties to the Chinese Communist Party (CCP) raises serious concerns about the department’s ability to protect American taxpayers’ money from exploitation by the CCP,” Lucas wrote in a letter to Energy Secretary Jennifer Granholm.

In November, Microvast and General Motors (GM.N) said they would work together “to develop specialized electric vehicle battery separator technology and build a new separator plant in the United States, which is expected to create hundreds of new jobs”. The companies are investing $304 million in the project, Microvast said.

Separators are used to separate the anode from the cathode in batteries. GM said it would bring its advanced separator technology to the Microvast collaboration.

Senator John Barrasso, the top Republican on the Energy and Natural Resources Committee, wrote to Granholm in a separate letter saying that Microvast “is tied at the hip with China.” He called the award “clearly antithetical” to the intent of the $1 trillion infrastructure act of 2012.

The Department of Energy said “Microvast is an American battery company” and with the grant “it no longer needs to look to China to establish its manufacturing facilities” and “will allow Microvast to build a separator production plant here at home”.

More than 200 companies applied for $2.8 billion in Department of Energy grants and 20 received awards.

Microvast and General Motors did not immediately comment.

A $430 billion climate bill approved in August imposes escalating mineral and battery component sourcing requirements on a $7,500 tax credit for electric vehicles and aims to phase out the content from countries like China.

Reporting by David Shepardson Editing by Bill Berkrot

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