President Joe Biden’s Department of Energy is promoting a grant to a lithium battery company as a move that would help usher in the green energy transition and ensure the United States cultivates domestic energy sources. However, it was not said that the Texas company receiving the grant operates primarily out of China and is under scrutiny by American financial regulators.
The DOE announced in October that it will give Microvast Holdings the $200 million grant to build a battery separator facility in Tennessee using funds from the bipartisan Infrastructure Act. At the time, Secretary of Energy Jennifer Granholm said the grant would “charge the private sector to ensure our clean energy future is American.”
While the DOE described Microvast as a “majority US-owned company traded on the NASDAQ” and “headquartered in Stafford, Texas,” the financial records show the company operates primarily out of China. Microvast itself says that the Chinese government “exercises significant influence over the manner in which we must conduct our business activities and can intervene at any time and without notice”. The company was also recently placed on a Securities and Exchange Commission watch list of Chinese companies on the way to being delisted from NASDAQ for failing to meet US auditing requirements.
The DOE award highlights the challenges posed by the green energy transition envisaged by Democrats and the Biden administration and raises questions about the touted $1.2 billion in bipartisan Infrastructure Bill funding. This bill should give a boost to US battery companies and strengthen the domestic clean energy supply chain, which is heavily dependent on China. The grant also draws calls for additional oversight from Congress. The Infrastructure Act, as written by the Legislature, says the DOE should avoid funding projects that use “battery material supplied by or sourced from a foreign entity of concern,” which includes companies that are “of the jurisdiction or instruction” of China.
Sen. Marco Rubio (R., Fla.) said that Washington Free Beacon that the Biden administration “has a lot to explain.”
“Giving hundreds of millions of taxpayer dollars to a company that is based in China and refuses to comply with US securities regulations is insane,” Rubio said. “Moreover, given Microvast’s activities there, any new technology developed in this partnership will almost certainly benefit China. It’s just another example of the Biden administration not understanding the threat posed by the Chinese Communist Party.”
Former DOE officials said the funding is extremely concerning and likely to raise alarms among lawmakers.
“Biden’s appointees knew from the start that because of China’s aggressiveness in infiltrating US energy and high-tech companies, they needed to be extra vigilant about where they were [infrastructure] Funds went,” a former DOE official told dem Free beacon. “A simple Google search reveals enough of a relationship between China and the shell company they use to access US taxpayer dollars to raise questions.”
“Well Congress, [the Government Accountability Office]or someone needs to ask what information the applicant provided about their relationship with China, how far that relationship goes,” the official said.
The DOE did not respond to a request for comment.
In its 2021 SEC annual report, Microvast describes itself as a “holding company” that conducts its business “primarily through our subsidiary in China.”
“A significant portion of our operations and manufacturing, and most of our current customers, are located in the [People’s Republic of China]Microvast said, adding that it has received subsidies from the Chinese government and that most of its customers are affiliated with “state-owned enterprises in the PRC.”
In May, the SEC added Microvast to a list of Chinese companies that do not meet US audit requirements under the Holding Foreign Companies Accountable Act. The law, which went into effect last spring, aims to prevent Chinese companies listed on US stock exchanges from using unauthorized Chinese-based auditors to conceal their finances.
Companies that remain on the list for three consecutive years are delisted from NASDAQ. They must also disclose whether they have directors who are Chinese Communist Party members or CCP-owned.
Microvast CEO Yang Wu is a US citizen, according to Microvast spokeswoman Sarah Alexander. Another Microvast director, Arthur Wong, a Hong Kong citizen based in Beijing, chairs the audit committee of Daqo New Energy Corporation, whose subsidiary was sanctioned by the Biden government last year for its links to slave labor in Xinjiang.
Alexander said none of Microvast’s directors, including Wu, are CCP members. She said the company mainly operates from Huzhou, China, but has expanded its manufacturing and research facilities to Germany and the United States.
Alexander said the company’s inclusion on the SEC’s non-compliance list could also change due to “recent developments at the SEC.” [Holding Foreign Companies Accountable Act]including an agreement between the US and Chinese governments to allow “full inspections”. SEC officials have reportedly been trying to negotiate an agreement with Beijing since September.