China Hawks Target IRA Subsidies for Chinese EV Investments

House Select Committee on the Chinese Communist Party Chairman Mike Gallagher (R-Wisc) and Rep. John Moolenaar (R-Mich) are calling on Treasury Secretary Janet Yellen to withhold any federal support for Chinese battery companies in the United States.   

The lawmakers – in a letter to Ms. Yellen – specifically scrutinized Treasury for greenlighting new plans for a Michigan battery factory owned and operated by China based Gotion High-Tech Company.  

The largest individual shareholder in Gotion is Volkswagen China.  Gotion supplies batteries to Vingroup's EV arm and is building a plant in Vietnam with the conglomerate. In India, Gotion delivers EV batteries to Tata Motors.

They identified shortcomings in the Committee on Foreign Investment In the United States process, questioning "why the CCP can not only own and operate battery factories in the United States, but also remain eligible for US taxpayer subsidies."   

“It appears that Treasury – as one of the primary implementing agencies behind the Inflation Reduction Act – may be offering Gotion large government subsidies for the project. We write to request information regarding Treasury’s plan to help fund this billion-dollar Beijing battery project with U.S. taxpayer dollars and the tools Treasury needs from Congress to ensure that it has sufficient jurisdiction under CFIUS to scrutinize such projects in the future,” they wrote.

In July Rep Gallagher sent a sternly worded letter to CEO Jim Farley of the Ford Motor Company, lashing into that company’s plans to license Chinese technology for electric vehicle battery production, calling for access to Ford’s business records and correspondence related to the deal.

Call for Immediate Action

The lawmakers urged Congress and Treasury to take immediate action to stop  the Chinese Communist Party from exploiting US taxpayer dollars.  They also asked Ms. Yellen to respond to the following questions no later than September 29th:

1. Does Treasury intend to provide any US taxpayer funding or other support to Gotion High-Tech Co. in connection with its construction of a lithium-ion battery manufacturing plant? Follow-up: If so, what is the amount of US taxpayer dollars that Treasury plans to allocate for this project?
2. Has Treasury been in communication with Gotion High-Tech Co. in connection with its plans to construct a lithium-ion battery manufacturing plant and possible tax inducements it could receive?Follow-up: If so, please describe the nature of these communications.
3. Has Treasury been in communication with the State of Michigan – including but not limited to Governor Gretchen Whitmer’s office – regarding Gotion High-Tech Co.’s planned project?  Follow-up: If so, please describe the nature of these communications.
4. Why does Gotion High-Tech Co.’s project not currently fall under the jurisdiction of CFIUS?  Follow-up: What does Congress need to provide via new reforms to ensure these types of PRC projects fall under the jurisdiction of CFIUS?