Arkansas lawmakers press DOE over $200 million subsidy for CCP-linked company

The Arkansas Republican delegation is demanding answers from the Department of Energy on why it awarded a $200 million grant to a Chinese Communist Party (CCP)-linked company using US taxpayer money that should be used to make the United States less dependent on from China. for battery production.

In a letter sent this week, Senators Tom Cotton, John Boozman and Representatives Rick Crawford, French Hill, Steve Womack and Bruce Westerman asked DOE Secretary Jennifer Granholm why a federal subsidy was given to Microvast, despite the company having documented ties to the CCP and operating primarily outside of China.

“While US companies were denied funding opportunities, the DOE supported a company that admits that the Chinese government ‘exerts substantial influence over how we conduct our business activities and can intervene, at any time and without notice.’ The DOE’s verification and oversight process is deficient,” they said in the February 7, 2023 letter.

The donation was part of the Infrastructure Investment and Employment Act (IIJA), which aims to help protect America’s domestic supply chains by being less reliant on China for materials like lithium-ion battery cells or critical minerals. According to Reuters, more than 200 companies competed for concessions under the IIJA last year, but only 20 companies were awarded.

GOROMONZI, ZIMBABWE - JANUARY 11: A mill installed at the Arcadia Lithium mine on January 11, 2022 in Goromonzi, Zimbabwe.  Last month, Chinese company Zhejiang Huayou Cobalt said it would pay more than $400 million to mine hard rock lithium, whose product is a key ingredient in rechargeable batteries used in electric vehicles.  The world's transition to

One of the mills installed in the mine on January 11, 2022, in Goromonzi, Zimbabwe. China’s Zhejiang Huayou Cobalt has agreed to acquire a 100% stake in the hard-rock Arcadia lithium mine in Zimbabwe from Prospect Lithium Zimbabwe for US$422 million. (Photo by Tafadzwa Ufumeli/Getty Images)

The DOE announced the grant to Microvast in October, with Granholm saying in a statement, “This truly is a remarkable time for manufacturing in America, as President Biden’s Agenda and historic investments burden the private sector to ensure that our future of clean energy is manufactured in the United States. .”

Microvast claimed it was “majority owned by the United States” and disclosed its status as a publicly traded company listed on the NASDAQ. The company’s grant was for the construction of a lithium-ion battery separation facility near its battery plant in Clarksville, Tennessee, as a joint project with General Motors.

However, members of Congress learned of the company’s relationship with China.

Microvast belongs to the holding company Microvast Holdings Inc. On December 14, 2021, filing with the Securities and Exchange Commission (SEC), Microvast Holdings Inc. declared: “A substantial part of our facilities are currently located in the People’s Republic of China, which we call ‘RPC’ or ‘China.'”

The document also said: “We are a holding company and we conduct all of our operations through our subsidiaries and primarily through our subsidiary in China.”

He also stated that investing in Microvast Holding Inc. involved “substantial risks” related to the fact that the company “conducts the substantial majority of our operations through our operating entities established in the PRC”:

Our operations are subject to extensive PRC government regulation, and changes in such regulations may increase our costs or limit our ability to sell products and conduct business in China. Specifically, as a result of our extensive and significant operations in China, we may in the future be subject to regulations issued by the Cyberspace Administration of China) and the requirements of the PRC Cyber ​​Security Law or Data Security Law.

And in a more recent SEC filing in November 2022, Microvast Holdings Inc. he said:

We plan to continue expanding our (research and development) presence in the US. We also plan to continue leveraging our knowledge base in the PRC and continue to expand our R&D efforts there as well.

It is unclear whether Microvast merged with another company, Tuscan Holdings Corp., to become a publicly traded company listed on the NASDAQ and hide its deep connections to China.

Microvast, on February 1, 2021, issued a press release titled “Microvast, a leading innovator in EV battery technologies, will be listed on Nasdaq through merger with Tuscan Holdings Corp.”

The press release said:

Microvast, Inc., a leading global provider of next-generation battery technologies for commercial and specialty vehicles (“Microvast” or the “Company”), and Tuscan Holdings Corp. (Nasdaq: THCB) (“Tuscan”), a publicly traded special purpose acquisition company (“SPAC”), today announced that they have entered into a definitive merger agreement that will result in Microvast becoming a publicly traded company. Upon closing of the transaction, the combined company will be named Microvast Holdings, Inc. and is expected to be listed on the Nasdaq Stock Market under the new symbol “MVST”.

Eight days later, it was announced by Tennessee Governor Bill Lee that Microvast planned to build a lithium-ion battery facility in the United States.

The company hid its China connections so well that it was initially able to gain support for the DOE grant from some Tennessee members of Congress, including some who are China hawks.

A familiar source told Breitbart News in a statement on Friday: “Last year, Senator (Marsha) Blackburn’s office, along with Congressman (Mark) Green, wrote a letter supporting a Department of Energy grant for the Microvast, a company with operations in Tennessee, Florida and Texas, which is proposing to create more jobs in Tennessee. The company presented itself to members as an American company based in Texas and hid any possible affiliation with Beijing. Following the recent allegations, Blackburn and Green wrote to the DOE seeking a full investigation and urged the agency to rescind the lease if the company is truly connected with the PCC.”

According to its December 31, 2021 annual report, Microvast Holdings Inc. it still has three subsidiaries in Huzhou, China: Microvast Power Systems, Co., Ltd.; Huzhou Microvast Electric Vehicle Sales Service Co., Ltd.; and Huzhou Hongwei New Energy Automobile Co., Ltd.

In May 2022, before Microvast received the grant, it was listed by the SEC as a non-compliant company under the Holding Foreign Companies Accountable Act, which seeks to prevent companies that employ Chinese auditors from concealing financial records from US regulators. USA. .

The Arkansas delegation is trying to get responses from the DOE before the project goes ahead. In their letter to Granholm they wrote:

DOE’s verification and oversight process is deficient. This is especially alarming given that there is $7 billion in IIJA funding that has yet to be distributed. Not only was this award in direct conflict with the stated intent of the grant, it hinders Arkansas’ economic growth due to the large deposits of lithium in our state.

The US government cannot continue to funnel taxpayer funds to Chinese-controlled companies and must apply strict verification and oversight to any current or future federal funding opportunities.

The Associated Press

A reflection of a 2021 Ford Mustang Mach E is seen in the window as it charges at a Ford dealership in Wexford, PA, May 6, 2021. (AP Photo/Keith Srakocic, Archive)

“If the purpose of this funding is to reduce US dependence on foreign entities for critical minerals, why would the DOE provide funding to a company with obvious ties to the CCP?” they asked.

They requested responses by February 21, 2023.

Victoria Coates, senior fellow specializing in national security and international affairs at The Heritage Foundation, called Microvast the “front of the PRC” in a recent article on the subject in the National Interest.

She urged Congress to explicitly ban federal grants to Chinese entities. “Doing this should be a top priority for the 118th Congress,” she wrote.

“If companies like Microvast want to receive US government contracts and grants, they must divest themselves of Chinese involvements and submit a clean bill of health to the Department of Energy before receiving funding,” she said.

“The Biden administration shouldn’t try to lure the company out of China with handouts, however desperately it wants cheap lithium batteries,” Coates said. “If the Department of Energy cannot do this on its own initiative, as appears to be the case, Congress should require it to certify that no recipients of grants or grants have ties to the PRC.”

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