An announcement by auto industry giant Ford that it will build an EV battery plant in Michigan with a Chinese firm supported by the Communist Party has brought criticism from politicians that America will become yet more dependent on the regime’s manufacturing capabilities.
Ford’s decision comes in spite of a caveat in the Biden Administration’s multi-trillion dollar Inflation Reduction Act spending scheme, which requires 40 percent of an EV battery’s components being extracted or produced within the United States or an FTA partner, to be eligible for a $7,500 federal tax credit.
The figure is set to increase to 80 percent in 2027.
On Feb. 13, Ford announced it will invest $3.5 billion to create the BlueOval Battery Park Michigan to create lithium and nickel electric vehicle batteries. Production is expected to commence in 2026 and bring 2,600 new jobs to Michigan.
“Ford will have the option to further grow its battery capacity at its Marshall, Michigan, plant, which will be part of a wholly owned Ford subsidiary,” the release stated.
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The press release noted near the end of its text, however, that Ford’s “wholly owned subsidiary” will “manufacture the battery cells using LFP [lithium] battery cell knowledge and services” in conjunction with China’s Contemporary Amperex Technology Co., Limited (CATL).
CATL, a company with a market capitalization of approximately $1.09 trillion yuan ($159 billion USD) was covered in The New York Times in December of 2021 during the stock market boom as being one of the EV craze’s biggest winners, next to Tesla.
CATL muscled out rival battery makers such as South Korea’s LG, with significant help from China’s government, the Communist Party, the Times wrote.
NYT stated that the Party “required that foreign automakers that want to sell electric cars in China transfer crucial technology to a local company. Only then would the government subsidize the sale of their autos, which could amount to up to $19,300 for car buyers.”
In a complicated corporate structuring schematic, CATL CEO Robin Zeng worked for a Japanese company called TDK that conducted business in China in the 90s. By 1999, Zeng had set up his own company inside of China supplying smaller-scale lithium batteries for retail electronics, such as cell phones.
“The team sold the company to TDK in 2005 for $100 million and continued to run it as a subsidiary,” the Times stated, adding that CATL was formed after “TDK allowed a group of Chinese investors led by Mr. Zeng to acquire an 85 percent stake in its nascent electric car battery business at the end of 2011.”
The Times also reported that Hunter Biden, President Joe Biden’s son, held a sub-one percent stake in CATL via Bohai Harvest RST (Shanghai) Equity Investment Fund Management Company, an entity established with “Chinese partners” in 2013.
Bohai Harvest’s 0.14 percent stake cost approximately $15 million in 2016, before being sold for $76 million in 2019, the article noted.
One of the highest profile opponents of Ford’s partnership with CATL was recently elected Virginia Governor Glenn Youngkin, a Republican, who in January, shut down a plan to build the facility in his state.
Youngkin said he would not allow taxpayer funds to be used to “recruit Ford as a front for China,” NBC reported.
In January, PV Magazine theorized that the issue may have actually been about protecting Virginia farmland from acquisition by China’s communist regime.
The outlet quoted Youngkin as stating during a speech that he had called on the State legislature to pass a bill for his signature that would “prohibit dangerous foreign entities tied to the Chinese Communist Party from purchasing Virginia’s farmland.”
The article cited Chief Legal Counsel Richard Cullen as telling The Washington Post at the time, “They (CATL) were looking for land and incentives to build something and I think that was the nucleus of the evolving concern about farmland.”
A spokesperson for Youngkin was even more hawkish, telling Detroit News, “While Ford is an iconic American company, it became clear that this proposal would serve as a front for the Chinese Communist Party, which could compromise our economic security and Virginians’ personal privacy,” PV Magazine stated.
After the announcement that Michigan had won the contract, Virginia Business magazine criticized Youngkin’s decision on the basis that, “Virginia Democrats decried Youngkin’s decision to block the plant from coming to Virginia as politically motivated and hypocritical, given his financial benefits from The Carlyle Group’s Chinese investments when Youngkin was co-CEO of the private equity company.”
Comparatively, Michigan Governor Gretchen Whitmer, a Democrat, called the plant a “generational investment by an American icon” that will “uplift local families, small businesses, and the entire community and help our state continue leading the future of mobility and electrification,” according to Ford’s press release.
But the plant also brought the ire of Sen. Marco Rubio (R-FL), the Vice Chairman of the Senate Intelligence Community. On Feb. 14, Rubio announced he had written to Secretary of Treasury Janet Yellen, Secretary of Transport Pete Buttigieg, and Secretary of Energy Jennifer Granholm, “Calling for an immediate Committee on Foreign Investment in the United States (CFIUS) review of the licensing agreement between Ford and CATL.”
In the letter, Sen. Rubio referred to Contemporary Amperex as “PRC national champion CATL” and demanded that the Biden Administration take a public stance that federal funding and Inflation Reduction Act tax credits will not be applied to Ford’s venture.
“As you are aware, the Chinese Communist Party (CCP) has not hidden its ambitious goals when it comes to developing and weaponizing its industrial capacity,” the Senator stated. “In 2015, Beijing published its Made in China 2025 plan, which specifically identified electric vehicles (EV) as a target industry to dominate within the decade.”
Rubio continued, “As you are also aware, even nominally private Chinese companies enjoy rich state support from Beijing, as well as important controls on their ownership. These firms are also obliged by numerous CCP policies and laws to support the regime’s objectives. CATL is no exception.”
But in Feb. 13 reporting by CNBC, Ford executives were adamant that they were only licensing technology and expertise from the Chinese firm.
Ford VP of EV Industrialization, Lisa Drake, told investors during a media call, “The LFP [lithium battery] technology is already here in the U.S. It’s in a lot of consumer electronics devices, it’s actually in another OEM product, but, unfortunately, it’s always imported.”
“This project is aimed at de-risking that by actually building out the capacity and the capability to scale this technology in the United States, where Ford has control,” she continued.
Company Chairman Bill Ford told investors and the media during an announcement event that CATL would only assist in bringing Ford “up to speed so that we can build these batteries ourselves.”
CNBC stated, “Ford declined to comment on the financial details of the licensing agreement with CATL.”