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 May 24, 2023

The Biden Administration terminates a $200 million grant to a Chinese-backed EV battery manufacturer

The Biden administration has decided not to award a grant of $200 million to a manufacturer of lithium batteries that has been subjected to significant scrutiny due to the proximity of its operations to China.

According to a report by The Daily Caller, the United States Department of Energy (DOE) had selected the electric battery maker Microvast as one of its grant recipients in order to carry out the provisions of the Bipartisan Infrastructure Act.

According to a report by Reuters, the DOE has confirmed to the Daily Caller News Foundation that it is no longer in negotiations with Microvast regarding the award.

The grant was going to be used to establish a production facility for electric vehicle batteries that would be used by General Motors.

Microvast, like many companies with corporate connections to China, allegedly is among the groups that the Chinese Communist Party has a "substantial influence" on in the way it does business. This which has led some Republican senators to condemn grant discussions with the company.

These politicians cited the company's close ties to China, where around 80% of its assets are situated, as the reason for their criticism.

“As responsible stewards of American taxpayer dollars, the Department of Energy maintains a rigorous review process prior to the release of any awarded funds,” a DOE spokesperson told the DCNF.

“It is not uncommon for entities selected to participate in award negotiations under a DOE competitive funding opportunity to not ultimately receive an award.”

In statements released on Monday, longstanding Republican critics of the potential grant, House Science Committee Chairman Frank Lucas and Senate Energy and Natural Resources Committee Ranking Member John Barrasso, expressed mixed reactions to the decision.

While Lucas lauded the decision as a "win for taxpayers and American businesses," he expressed "incredibly frustratited" that it took several months and significant political pressure from GOP legislators to block the potential deal.

“I’m stunned it took the Biden Administration this long to admit the obvious: no company beholden to Communist China should be considered for U.S. government grants or loans,” said Barrasso, in a similarly mixed response.

“The administration should immediately reject other applicants with similar ties. It should also overhaul its grant making process and conduct due diligence before issuing press releases.”

The domestic manufacturing of products that are based on environmentally friendly technologies is a central tenet of President Joe Biden's approach to economic and environmental policy.

Tax credits to produce electric vehicle batteries under the president's landmark climate law, the Inflation Reduction Act, could cost approximately $136 billion over the next decade, according to estimates provided by private analysts. This figure is more than four times the initial estimate provided by the government.

Written By:
Charlotte Tyler

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