Biden Admin Cancels $200 Million Grant to Battery Maker Run by Chinese 'Talent Program' Recruit

Energy Department drops controversial project after the Free Beacon revealed company's Chinese ties

Energy Secretary Jennifer Granholm testifies before Congress / Getty Images
May 23, 2023

The Biden administration canceled a pending $200 million grant to lithium battery maker Microvast on Monday, nearly six months after the Washington Free Beacon first reported on the company’s extensive operations in China.

The major reversal comes after Republican lawmakers spent months pressing Energy Secretary Jennifer Granholm to scrap the deal, citing Microvast’s extensive operations in China and its CEO’s participation in a Chinese government-sponsored talent recruitment program.

The Chinese foreign ministry said it opposed the White House’s decision, according to the state-controlled Global Times. Microvast’s stock dropped sharply on Tuesday following the news.

The Department of Energy has faced criticism from lawmakers since it announced last October that it selected Microvast for a $200 million grant to build a battery separator facility in Tennessee. The proposed plant would have drawn funding from the Bipartisan Infrastructure Law that was intended to counter China’s dominance over the global battery industry.

Although Microvast’s corporate headquarters is in Texas, financial records show the company operates primarily out of China, the Free Beacon reported in December. The company disclosed to shareholders last year that the Chinese government "exerts substantial influence over the manner in which we must conduct our business activities and may intervene, at any time and with no notice."

Microvast’s founder and CEO was also reportedly recruited to move back to China from the United States in 2000, as part of a Chinese government-sponsored "talent program." An Energy Department official said in February that the department is "prohibited" from funding people who are involved in such talent programs, which the FBI says are often used as fronts for economic espionage.

Sen. John Barrasso (R., Wyo.)—who launched an investigation into the grant in December and grilled Granholm about it in a hearing last month—welcomed the announcement but questioned why the decision took six months.

"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, the ranking Republican on the Senate Committee on Energy and Natural Resources.

"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."

House Science, Space, and Technology Committee chairman Frank Lucas (R., Okla.) said the decision was a "win for taxpayers and American businesses," but added that he was "frustrated that it took the Department six months and multiple letters from our Committee to come to such an obvious conclusion."