WASHINGTON (AP) – The Biden administration has scrapped plans to award a $200 million grant to a U.S. battery maker amid criticism from Republican lawmakers over the company’s alleged ties to the china
Texas-based Microvast was one of 20 companies to win preliminary grants totaling $2.8 billion to boost domestic manufacturing of electric vehicle batteries. The company is building a battery plant in Tennessee and was in talks with the Department of Energy for a $200 million grant funded through the 2021 infrastructure law.
A spokeswoman for Energy Secretary Jennifer Granholm confirmed Tuesday that negotiations with Microvast were canceled, but did not offer a specific reason.
The Energy Department said in a statement that it “maintains a rigorous review process prior to the release of any awarded funds, and it is not uncommon for entities selected to participate in award negotiations” to ultimately be denied a federal grant.
“The department can confirm that it has chosen to terminate negotiations and not award Microvast funds from this competitive funding opportunity,” spokeswoman Charisma Troiano said.
The company did not immediately return a request for comment.
Republicans and Democrats praised the department’s decision.
“This is a win for American taxpayers and businesses,” House Science Committee Chairman Frank Lucas, R-Oklahoma, said in a statement. “Under no circumstances should our tax dollars fund a company with substantial ties to the Chinese Communist Party. These funds are intended to strengthen America’s battery production and supply chain, not strengthen China’s control over these supplies.”
Lucas and other Republicans said they were frustrated that it took the Biden administration more than six months to “come to such an obvious conclusion.” Lucas and other Republican lawmakers have repeatedly complained about what they call Microvast’s ties to the Chinese Communist Party.
New Jersey Rep. Frank Pallone, the top Democrat on the House Energy and Commerce Committee, said the decision to rescind the grant “shows that the DOE is taking its stewardship of taxpayer dollars very seriously.” .
At a Senate Energy Committee hearing in February, Sen. John Barrasso, R-Wyo., questioned whether the planned subsidy to Microvast would benefit China. Barrasso cited a company filing with the Securities and Exchange Commission in which Microvast said it might not be able to protect its intellectual property rights in China.
China often requires foreign companies to partner with Chinese companies to operate in the country.
In a May 1 letter to Granholm, Barrasso said Microvast’s CEO had “bragged to the Chinese media about Microvast’s strong ties to the People’s Republic of China.”
Barrasso said the 2021 infrastructure law “was ostensibly aimed at developing robust domestic manufacturing bases and supply chains” for electric vehicles and other clean energy. “DOE’s distribution of $200 million in taxpayer funds to a China-linked company” would be “demonstrably antithetical to the intent of the bipartisan Infrastructure Act,” he added.
Barrasso called the Microvast grant an example of “Solyndra syndrome,” a reference to an Obama-era program that disbursed more than $500 million in loan guarantees to failed solar company Solyndra. He and other Republicans said both cases demonstrated shoddy investigations by Democratic administrations.
The loan program was largely dormant under President Donald Trump, but President Joe Biden has revived it. It is separate from infrastructure law funding that was conditionally awarded to Microvast and other companies.
The subsidies announced in October were aimed at helping US companies mine and process lithium, graphite and other battery materials. The Biden administration is looking to increase production and sales of electric vehicles as a key part of Biden’s strategy to curb climate change and boost U.S. manufacturing.
“This is very important, because the future of vehicles is electric,” Biden said at a White House event last year. The Energy Department grants, along with other spending approved in the 2022 climate law, are a bid “to make sure we get back in the (battery production) game in a big way,” Biden said.
