'Endangering Our National Security': Senator Launches Inquiry Into Biden's $200M Grant to China-Based Battery Company

Sen. John Barrasso (R., Wyo.), the ranking member of the Senate Energy and Natural Resources Committee
December 8, 2022

The top Republican on the Senate energy committee launched an inquiry on Wednesday into a Biden administration grant to a China-based battery company under scrutiny from U.S. financial regulators. The announcement came in the wake of a Washington Free Beacon report about the Biden administration's attempt to spin the grant as a boon for American-made clean energy.

Sen. John Barrasso (R., Wyo.), the ranking member of the Senate Energy and Natural Resources Committee, said the Department of Energy’s grant to Microvast Holding "endangers our national security" and "undermine[s] the United States’ position in its race against China for technological supremacy," in a letter to DOE secretary Jennifer Granholm on Wednesday.

The inquiry comes after the DOE gave the $200 million award to Microvast, a holding company that operates primarily in China, to build a lithium-ion battery separator facility in Tennessee, the Free Beacon reported on Tuesday. Granholm said the funding, which came from the Bipartisan Infrastructure Law, would help "supercharge the private sector to ensure our clean energy future is American-made."

Barrasso asked Granholm to turn over records detailing the "security review process" for companies receiving DOE funding, and the names of officials who are responsible for approving the payments.

"Microvast’s close relationship with China is no secret," wrote Barrasso. "I remind you that the Bipartisan Infrastructure Law was ostensibly intended to develop robust domestic manufacturing bases and supply chains free from the predations of the [People’s Republic of China]."

"DOE distributing $200 million in taxpayer funds to a company joined at the hip with China is demonstrably antithetical to the Bipartisan Infrastructure Law’s intent," he added.

Barrasso asked Granholm to provide him with the information by Dec. 21.

The DOE described Microvast as a "majority U.S.-owned company, traded on NASDAQ" and "headquartered in Stafford, Texas." Microvast’s 2021 annual report with the Securities and Exchange Commission said it is a "holding company, and we conduct all of our operations through our subsidiaries, and principally through our subsidiary in China." Microvast said it has received subsidies from the Chinese government and a significant portion of its customers are Chinese state-owned enterprises.

"The PRC 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," said the company’s filing.

Earlier this year, the Securities and Exchange Commission added Microvast to a list of public companies with China-based auditors and whose financial records are subject to restrictions by the Chinese government. Companies that remain on the list for three consecutive years will be delisted from U.S. stock exchanges under the Holding Foreign Companies Accountable Act.

A DOE spokesman defended the grant in a statement to the Free Beacon on Wednesday, saying the company "will use U.S. sourced raw materials in the proposed facility and equipment manufactured within the U.S. or by U.S. allies."

The Bipartisan Infrastructure Law states that the DOE should avoid funding projects that "use battery material supplied by or originating from a foreign entity of concern," which includes a "foreign entity … subject to the jurisdiction or direction" of China.

The DOE told the Free Beacon that Microvast "does not meet these criteria." A spokesman did not immediately respond to follow-up questions about how this was determined.

Microvast spokeswoman Sarah Alexander told the Free Beacon that the company is majority U.S.-owned and primarily operates out of Huzhou, China, but has been expanding its manufacturing and research facilities to Germany and the United States.