Biden admin withdraws grant for energy firm with ties to China in stunning reversal
The Biden administration informed lawmakers on Monday that it would no longer award a $200 million grant to a China-linked energy technology company in an unexpected U-turn.
In a phone call with congressional staff late Monday, Department of Energy (DOE) officials said Microvast, a Texas-based maker of electric vehicle battery technology, would not receive the lucrative grant that had was planned as part of the 2021 infrastructure package. Republican lawmakers for months called on the agency to rescind the grant after its ties to China were exposed last year.
“The Department of Energy has finally given up sending U.S. taxpayers’ money to Microvast, an electric vehicle battery company with deep ties to Communist China,” said John Barrasso, R-Wyo, a member of the Senate Committee on energy and natural resources, in a press release.
“I’m amazed it’s taken this long for the Biden administration to face the obvious: no company beholden to communist China should be considered for US government grants or loans,” he said. added. “The administration should immediately reject other applicants with similar ties. It should also review its grantmaking process and exercise due diligence before issuing press releases.”
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The DOE announced in October that Microvast would be one of 20 U.S. companies to receive a portion of the nearly $3 billion allocated through the infrastructure bill for a program designed to bolster domestic battery manufacturing capabilities. . Energy Secretary Jennifer Granholm pointed to Microvast and the other grant recipients as examples of companies that would boost “made in the USA” batteries.
However, 69% of Microvast’s revenue was generated in China and only 3% came from the United States, according to a third-quarter financial statement filed with the Securities and Exchange Commission (SEC) last month. In the same filing, the company acknowledged that the Chinese government “exerts substantial influence” over its business operations and “may intervene at any time and without notice.”
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Fox News Digital previously reported that while Microvast was incorporated in Stafford, Texas in 2006, it simultaneously incorporated Microvast Power Systems, a subsidiary, in Huzhou, China. Four years later, in 2010, Microvast began producing lithium battery components in Huzhou, where its subsidiary is based.
Microvast Power Systems also signed an agreement in December 2018 with local government entity Huzhou Saiyuan to issue convertible bonds. As part of the arrangement, Microvast has pledged its 12.39% stake in Microvast Power Systems to Huzhou Saiyuan to facilitate the issuance of convertible bonds.
“The PRC government may, at any time and without notice, exercise substantial interference and influence over the way we conduct our business, which we may not be able to anticipate,” the company said in a statement. recent filing with the SEC.
The SEC placed Microvast on a watch list in April 2022 for financial audit issues related to its foreign ties, an action that could result in the company being delisted.
Yang Wu, CEO, Chairman and Founder of Microvast, attended Southwest Petroleum University in Chengdu, China.
The bipartisan infrastructure legislation, through which Microvast received the grant, implores the DOE not to award grants to companies that “use battery equipment supplied by or sourced from a relevant foreign entity” or to companies “subject to jurisdiction or control” of China.
Yet the DOE had defended the grant for months, saying the company was in fact American and that the grant would ultimately allow Microvast to develop manufacturing capabilities on US soil.
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“This is a win for American taxpayers and businesses,” House Science, Space and Technology Committee Chairman Frank Lucas, R-Okla, said Monday night. “Under no circumstances should our tax dollars fund any company with ‘substantial’ ties to the Chinese Communist Party. These funds are intended to bolster US battery production and supply chain, not to tighten China’s stranglehold on those supplies.”
“I am pleased with the DOE’s decision, but incredibly frustrated that it took the Department six months and several letters from our committee to come to such an obvious conclusion,” Lucas continued. “We will continue to hold the administration accountable for its funding decisions and ensure that American taxpayers’ money is protected from exploitation by the CCP.”
The DOE and Microvast did not immediately respond to requests for comment.