Senator Demands Answers on Whether Biden's Announcement of $3 Billion Green Energy Grants Misled Investors

Pre-election announcement led to surge in stock prices for grantees. Then Biden said they weren't final.

February 23, 2023

On the cusp of the midterm elections, the Biden administration announced nearly $3 billion in federal grants to a group of energy companies. Democratic senators cheered, and the companies’ stock prices surged: Shares of Microvast Holdings, one of the chosen companies, shot up 40 percent.

Now, one Republican senator is charging that the Biden administration misled investors because, in fact, those grants weren’t a done deal—they were held up, it appears, after the Washington Free Beacon reported that the Chinese government "exerts substantial influence" over Microvast.

Sen. John Barrasso  (R., Wyo.), the lead Republican on the Senate Energy Committee, said in a letter sent to the Department of Energy this week that the administration’s failure to do due diligence is no excuse for disseminating false financial information to shareholders.

Microvast Holdings came under congressional scrutiny after the Free Beacon reported that the company’s financial disclosure report indicated 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." And Republicans had warned that President Joe Biden’s aggressive green energy push is likely to benefit China, which holds a near-monopoly over the global electric vehicle battery and solar industries.

Such concerns led Deputy Energy Secretary David Turk to tell a Senate panel earlier this month that the administration is now conducting "a due diligence process" of the grantees and that "no taxpayer funding is going to any of these companies yet." The department also sent letters to concerned lawmakers that said the grants are undergoing review, Bloomberg reported last week.

But those statements are at odds with earlier statements from the department indicating the grants were final. DOE issued a press release in October listing 20 companies that it said "will receive a combined $2.8 billion" in energy grants to "expand domestic manufacturing" under Biden’s infrastructure law. It led to a significant increase in the share prices for the publicly traded companies named by DOE.

Microvast was selected for a $200 million grant to build a battery separator facility and saw its share prices spike 40 percent immediately following the DOE announcement, according to Bloomberg. Its shares fell 13 percent after the news came out that the grants were not finalized.

In another press release sent in October, DOE published statements it had solicited from nearly a dozen Senate and House lawmakers, who seemed to have the impression that the grants were finalized.

"These critical grants for two of Washington state’s very own battery manufacturing facilities … mean more good-paying jobs," said Sen. Patty Murray (D., Wash.).

Sen. Raphael Warnock (D., Ga.) said he was "proud to fight for and help secure the $178 million needed for this new facility [in Georgia]."

Sen. Jacky Rosen (D., Nev.) applauded grants to two companies for a project in Nevada: "Congrats American Battery Technology Company and Lilac Solutions!"

None of the lawmakers responded to requests for comment.