Former Energy Sec Calls for Investigations Into DOE Grant to China-Based Battery Company

In bid to boost U.S. green energy, DOE gave $200 million to Chinese company under scrutiny from U.S. financial regulators

Secretary of Energy Jennifer Granholm / Getty Images
December 13, 2022

Former energy secretary Rick Perry said his Democratic successor, Jennifer Granholm, should face congressional investigations over the $200 million her department sent to a China-based battery company, predicting that those investigations would lead to calls for her resignation.

Perry’s comments come as U.S. Senate and House investigators have launched inquiries into the DOE grant to Microvast Holdings to build a battery separator facility in Tennessee, using federal funds that were intended to counter China’s dominance over the global lithium-ion battery supply chain. Microvast, a U.S. holding company, operates primarily from China and is under scrutiny from American financial regulators, the Washington Free Beacon first reported last week.

"This is just unacceptable behavior for the Department of Energy, the secretary of energy to be sending money to companies like this," said Perry, who served as secretary of energy under the Trump administration until 2019, during an interview with Fox News Sunday Morning Futures. "You’re gonna have the House investigating this. You’re gonna have the Senate investigating this."

"It’s not for me to call for somebody’s resignation. But I’m suggesting that these leaders in Congress, after they dig into this, it’s not gonna take them long to get to the real facts, that they will start calling for the resignation of the secretary of energy," he added.

The Biden administration's dash to implement its ambitious green energy agenda—pushed by anti-fossil-fuel hardliners such as climate czar John Kerry—has forced it to work with a global green industry dominated by China, where companies often have links to the adversarial Chinese Communist Party government, the state security apparatus, or widespread labor abuses.

The DOE has defended the grant, telling the Free Beacon that Microvast’s proposed facility in Tennessee "will use U.S. sourced raw materials in the proposed facility and equipment manufactured within the U.S. or by U.S. allies."

The department told Fox News on Sunday that the funding means that Microvast "no longer needs to look to China to establish its manufacturing facilities. The president’s historic agenda is helping to reshore manufacturing back to the U.S."

While the DOE describes Microvast as a "majority U.S.-owned company, traded on NASDAQ" and "headquartered in Stafford, Texas," financial records show the company operates primarily in China.

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" and disclosed 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." The company said it has received subsidies from the Chinese government and a significant portion of its customers are Chinese state-owned enterprises.

Earlier this year, the SEC added Microvast to a list of publicly listed companies linked to China that are in violation of the Holding Foreign Companies Accountable Act due to a lack of auditing transparency. Companies that remain on the list for three consecutive years will be delisted from U.S. stock exchanges.

Rep. Frank Lucas (R., Okla.), the ranking Republican on the House Science, Space, and Technology Committee, sent a letter to Granholm last week demanding records related to the grant.

The funding "raises serious concerns about the Department’s ability to protect U.S. taxpayer dollars from exploitation by the [Chinese Communist Party]," wrote Lucas.

Sen. John Barrasso (R., Wyo.), the ranking member of the Senate Energy and Natural Resources Committee, also sent a letter to Granholm demanding documents related to the grant last week. He said the funding "endangers our national security" and "undermine[s] the United States’ position in its race against China for technological supremacy."