WASHINGTON, July 21 (Reuters) – Two U.S. House of Representatives committees said Friday they are investigating Ford Motor Co’s (F.N) partnership with Chinese battery company CATL (300750.SZ).
Ford announced in February it is spending $3.5 billion to build a battery plant in Michigan using technology from CATL, the world’s largest battery maker.
Jason Smith and Mike Gallagher, Republican chairs of the House Ways and Means Committee and the Select Committee on China, in a joint letter demanded Ford answer questions about the deal.
They warned that if the company remains reliant on China for inputs to produce electric vehicle batteries, “the company will be exposing itself and U.S. taxpayers to the whims of the Chinese Communist Party and its politics.”
Ford said Friday it is reviewing the letter and will respond. Ford said it “will own and run this plant in the United States, instead of building a battery plant elsewhere or exclusively importing LFP (lithium iron phosphate) batteries from China like our competitors do.”
The committees said several hundred of the 2,500 Ford plant jobs will be filled by CATL employees from China who will be in charge of setting up and maintaining equipment.
The letter said public disclosures and media reporting suggest that shortly following the Ford and CATL partnership announcement, “CATL took steps to maintain effective control while appearing to divest its ownership stake” in companies based in Xinjiang that allegedly are connected to forced labor practices.
Human rights groups accuse Beijing of abuses against Xinjiang’s Uyghur inhabitants, including the mass use of forced labor in internment camps. China denies the allegations.
In 2022, Congress passed the $430 billion Inflation Reduction Act that will in the future bar EV tax credits if any EV battery components were manufactured or assembled by a “foreign entity of concern.”
Ford still is awaiting guidance from the U.S. Treasury to ensure the partnership does not run afoul of the requirement.
“We are concerned that the deal could simply facilitate the partial onshoring of PRC-controlled battery technology, raw materials, and employees while collecting tax credits and flowing funds back to CATL through the licensing
agreement,” the House letter said.
Republican Senator Marcio Rubio has urged the Biden administration to investigate the deal and introduced legislation that seeks to bar consumer tax credits for EVs produced using CATL technology.
