GOP reps want feds to investigate Ford’s deal with Chinese companies

Ford has been looking to build the first LFP battery facility in the US, boosting domestic production. But it has been leaning on Chinese tech from CATL to make that happen, and Republican lawmakers have criticized the project. Now they’ve asked the Biden administration to investigate four Chinese companies involved in the plant.

The chairs of two US House committees are asking the US government to investigate four Chinese companies in connection with Ford’s new Michigan battery plant, according to a report in Reuters.

The four Chinese companies are thought to have direct ties to the Chinese military, the Chinese Communist Party, the North Korean government, and alleged human rights abuses in China’s Xinjiang region, the report said.

Last year, the US automaker announced a licensing agreement with China-based Contemporary Amperex Technology Co. Ltd. (CATL) to use its tech for lithium-iron-phosphate batteries for EVs. Ford plans to build the batteries and operate its plant independently, but US Republican lawmakers have said that US tax subsidies could be used to fund Chinese interests.

Now, two GOP lawmakers are asking the US Commerce and Treasury departments to investigate the four companies involved in the Ford project – the company names have been redacted in letters provided to media, but the companies are involved in concept design of the plant and IT services, according to Reuters.

The committee chair alleges connections with a number of Chinese government and military operations, and human right abuses of Uyghur Muslims in China’s Xinjiang region, which China outright denies.

The representatives involved are Mike Gallagher of Wisconsin with the CCP committee and Cathy McMorris Rodgers of Washington with Energy and Commerce. Both are calling for a review of whether or not to impose export restrictions.

“It is unconscionable for Ford to purchase critical IT infrastructure from a Chinese company that facilitates sanctions evasion activity on behalf of the North Korean government,” the two Republicans wrote. “Indeed, this poses significant cybersecurity risks.”

Ford CEO Jim Farley requests that a Ford rep get a chance to present its due diligence around its partnership with CATL. “We’ve been helping the committees understand this Ford wholly owned and operated project,” a Ford spokesperson told The Detroit News.

“We follow all government regulations across our business. Beyond legal requirements, Ford suppliers also must meet our higher standards for conduct, including to protect human rights, and are obligated to extend them to the vendors they might work with, too.”

City Dwellers’s Take

All this lands as Ford is already scaling back on its investment in the plant, due to what it says it slowing EV demand. The original plan was a $3.5 billion plant that could produce around 35 GWh of new battery capacity a year, but now Ford has slashed that investment by almost half.

It’s, no doubt, a political game too, and this is likely only the beginning of what will be a complex year in that regard. President Biden has made the focus on transitioning American drivers to EVs a central part of his policy – while Republicans have been working hard to dismantle those efforts, and we’re sure to see more of this happening this year. Republicans, and a couple of Democrats, have been pushing back on Biden’s $7.5 billion plan to build out EV infrastructure in the US by focusing on a short-term waiver that allows federally subsidized EV chargers to include materials from China. Republicans aiming to block the waiver don’t like this – but Biden exercised his veto power, for now at least.

We’ll stayed tuned to see how this latest chapter unfolds.

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