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On February 13, 2023, the Ford Motor Company and Chinese national champion Contemporary Amperex Technology Co. Limited (CATL) announced an agreement to build electric vehicle batteries in Michigan. This deal will only deepen U.S. reliance on the Chinese Communist Party for battery tech, and is likely designed to make the factory eligible for Inflation Reduction Act (IRA) tax credits.
U.S. Senator Marco Rubio (R-FL) sent a letter to U.S. Secretary of the Treasury Janet Yellen, U.S. Secretary of Energy Jennifer Granholm, and U.S. Secretary of Transportation Pete Buttigieg 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, Senator Rubio also requested a commitment from the Biden Administration not to support CCP efforts by providing tax credits or other funding for the deal.
Want more information? In December, Rubio warned about the Biden Administration using taxpayer funds to subsidize the Chinese Communist Party’s human rights abuses through the Inflation Reduction Act.
The full text of the letter is below.
Dear Secretaries Yellen, Granholm, and Buttigieg:
I write to convey concern over today’s announcement of a licensing agreement between Ford Motor Company (“Ford”) and Contemporary Amperex Technology Co. Limited (“CATL”), a People’s Republic of China (PRC)-based and regime-supported battery manufacturer that commands one-third of the global electric-car battery market.[1] In particular, I am alarmed at Ford’s plan to establish a large, Michigan-based factory, structured as a wholly owned subsidiary that licenses its technology from CATL.[2] As such, I write to request a Committee on Foreign Investment in the United States (CFIUS) review of the licensing agreement, as well as demand that no federal funds – especially monies or tax credits granted via the Inflation Reduction Act (P.L. 117-169) – go to enrich PRC national champion CATL, or any other Beijing-supported company, directly or indirectly.
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. 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. In particular, the CCP has worked to fund and develop EV battery technologies,[3] taking steps to ban foreign-made batteries from the market and striving to monopolize critical input processes, such as phosphoric acid production, in their industrial sector.
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. As described in a 2021 New York Times report, “Chinese government officials made sure CATL’s business stayed in Chinese hands. They created a captive market of battery customers. And when CATL needed money, they doled it out.”[4] As a result, CATL today is the world’s largest EV battery producer,[5] guaranteeing powerful ties with automakers anxious to respond to incentives from federal governments around the world toward shifting away from internal-combustion engines.
The deal announced today will reportedly leave ownership of the plant and land on which it is constructed in Ford’s hands, while CATL will own and supply critical technology involved, including lithium iron phosphate cathodes, via a licensing agreement.[6] The exact structure of this arrangement has yet to be reported, but policymakers should be clear-eyed about one takeaway: if Chinese companies like CATL are able to exploit both Chinese and United States incentives for battery and EV technology through clever corporate arrangements, then there is no use in investing federal funds toward industrial development in the first place. Taxpayer dollars should never be used to support PRC champions.
To that end, I request that CFIUS conduct a review of Ford’s and CATL’s licensing deal and ownership structure of the plant announced today, as well as request answers to the following questions, in writing, within 30 days:
2. To what degree has CATL relied on United States research and development in its own battery
production?
a. To what degree has it acquired United States research and development through illicit
means?
3. Does CATL provide equipment, technology, or other services to the People’s Liberation Army, the People’s Armed Police, or any other security body controlled by the CCP?
4. Has CATL acquired any assets through a transaction that is reviewable under the CFIUS?
5. Has CATL ever been implicated in forced labor or child labor?
6. To what degree will CATL have equity in, ownership over, or other forms of control over Ford’s planned subsidiary and the factory?
As your departments no doubt agree, under no circumstances should the Biden Administration be considering providing federal support to Chinese manufacturers, including PRC national champions – and especially not when American F-22s are being deployed in real time to shoot down Chinese spy balloons.
Thank you for your attention to this matter. I look forward to your prompt response.
Sincerely,