Wednesday, October 23

Energy Dept. cancels $200M grant to battery maker after GOP criticism over alleged ties to China

WASHINGTON — The Biden administration has canceled plans to award a $200 million grant to a U.S. battery producer amid criticism from Republican lawmakers over the corporate’s alleged ties to China.

Texas-based Microvast was one among 20 firms to win preliminary grants totaling $2.8 billion to spice up home manufacturing of batteries for electrical autos. The firm is constructing a battery plant in Tennessee and was in talks with the Energy Department for a $200 million grant funded by way of the 2021 infrastructure legislation.

A spokeswoman for Energy Secretary Jennifer Granholm confirmed Tuesday that negotiations with Microvast had been canceled, however didn’t supply a selected purpose.

The Energy Department stated in an announcement 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 finally be denied a federal grant.

“The department can confirm that it has elected to cancel negotiations and not to award Microvast funds from this competitive funding opportunity,” spokeswoman Charisma Troiano stated.

The firm didn’t instantly return a request for remark.

Republicans and Democrats praised the division’s choice.

“This is a win for taxpayers and American businesses,” House Science Committee Chairman Frank Lucas, R-Oklahoma stated in an announcement. “On no account should our tax dollars be funding a company with substantial ties to the Chinese Communist Party. These funds are intended to strengthen America’s battery production and supply chain, not to tighten China’s stranglehold on these supplies.”

Lucas and different Republicans stated they had been annoyed that it took greater than six months for the Biden administration “to come to such an obvious conclusion.” Lucas and different GOP lawmakers have repeatedly complained about what they name Microvast’s hyperlinks to the Chinese Communist Party.

New Jersey Rep. Frank Pallone, the highest Democrat on the House Energy and Commerce Committee, stated the choice to rescind the grant “exhibits that the DOE is taking its stewardship of taxpayer cash very severely.″

At a Senate Energy Committee listening to in February, Sen. John Barrasso, R-Wyo., questioned whether or not the deliberate grant to Microvast would profit China. Barrasso cited an organization submitting with the Securities and Exchange Commission during which Microvast stated it could not be capable of defend its mental property rights in China.

China usually requires international firms to accomplice with Chinese companies so as to function within the nation.

In a May 1 letter to Granholm, Barrasso stated Microvast’s CEO had “bragged to Chinese media about Microvast’s strong ties to the People’s Republic of China.”

The 2021 infrastructure legislation “was ostensibly intended to develop robust domestic manufacturing bases and supply chains” for electrical autos and different clear vitality, Barrasso stated. “DOE’s distribution of $200 million in taxpayer funds to a company joined at the hip with China” can be “demonstrably antithetical to the Bipartisan Infrastructure Law’s intent,” he added.

Barrasso known as the Microvast grant an instance of “the Solyndra Syndrome,” a reference to an Obama-era program that disbursed greater than $500 million in mortgage ensures to the failed photo voltaic firm Solyndra. He and different Republicans stated each circumstances demonstrated poor vetting by Democratic administrations.

The mortgage program largely went dormant below President Donald Trump however has been revived by President Joe Biden. It is separate from infrastructure legislation funding that was conditionally awarded to Microvast and different firms.

Grants introduced in October had been meant to assist U.S. firms extract and course of lithium, graphite and different battery supplies. The Biden administration is in search of to spice up manufacturing and gross sales of electrical autos as a key a part of Biden’s technique to sluggish local weather change and construct up U.S. manufacturing.

“This is critically necessary, as a result of the way forward for autos is electrical,″ Biden stated at a White House occasion final yr. The Energy Department grants – together with different spending accredited within the 2022 local weather legislation – are a bid “to ensure we’re again within the (battery manufacturing) recreation in a giant method,″ Biden stated.

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