The Biden administration informed lawmakers on Monday that it would no longer award a $200 million grant to a Chinese-linked energy technology firm in an unexpected reversal.
In a call with congressional staff on Monday evening, Department of Energy (DOE) officials said that MicroVast, a Texas-based company that makes technology for electric vehicle batteries, will not receive a profit grant under the 2021 infrastructure package.
Republican lawmakers have called for months to revoke the grant to the agency after the Chinese ties were revealed last year.
“As responsible stewards of U.S. taxpayer dollars, the Department of Energy maintains a rigorous review process prior to releasing any awarded funds, and it is not unusual for selected organizations to enter award negotiations under a DOE competitive funding opportunity. Don’t finally get to participate. an award,” a DOE spokesperson told Fox News Digital in a statement.
“The Department can confirm that it has chosen to cancel negotiations and not award Microwaste funds from this competitive funding opportunity,” the statement continued.
The spokesperson did not say what specifically led DOE to cancel talks with Microwaste.
During the grant award process, DOE is required to evaluate a number of factors, including the applicant’s past performance, including audit reports, its financial management and its accounting systems, to meet the scope of its responsibilities under the award.
Grantees are required to share a large amount of confidential information during the process that may factor into DOE’s final decision.
The DOE announced in October that Microwaste would be one of only 20 U.S. companies to receive a share of nearly $3 billion appropriated by the infrastructure bill for a program designed to boost domestic battery manufacturing capabilities.
Energy Secretary Jennifer Granholm cited MicroVast and other grant recipients as examples of companies that would promote “American-made” batteries.
However, 69% of Microvast’s revenue was generated in China and only 3% came from the US, according to a third-quarter financial disclosure it filed with the Securities and Exchange Commission (SEC) last month. In the same filing, the company acknowledged that the Chinese government has “considerable influence” over its business activities and “may intervene at any time and without notice.”
“The Department of Energy has finally backed away from sending U.S. taxpayer dollars to Microwaste, an electric vehicle battery company with close ties to Communist China,” Senate Energy and Natural Resources Committee Ranking Member John Barroso, R-Wyo., said in a statement. .
“I’m surprised it took so long for the Biden administration to acknowledge the obvious: No company looking at Communist China should be considered for US government grants or loans,” he added. “The administration should immediately reject other applicants with such connections. It should also fine-tune its grant-making process and conduct due diligence before issuing press releases. “
Fox News Digital previously reported that when MicroWast incorporated in Stafford, Texas, in 2006, it incorporated a subsidiary firm MicroWast Power Systems in Huzhou, China.
Four years later, in 2010, Microwast began producing components for lithium batteries in Huzhou where it has a subsidiary.
Microwaste Power System signed an agreement with Huzhou Saiyuan, a local government body, to issue convertible bonds in December 2018.
As part of the arrangement, Microvast pledged its 12.39% equity holding of Microvast Power Systems to Huzhou Saiyuan to facilitate the issuance of convertible bonds.
“The PRC government may, at any time and without notice, make significant interventions and effects on the way we conduct our business activities, which we may not be able to anticipate,” the company said in a recent SEC filing. said in
The SEC placed Microvast on a watch list in April 2022 over financial auditing issues related to its foreign relations, an action that could result in the company being delisted.
Yang Wu, CEO, Chairman and Founder of Microvast, attended Southwest University of Petroleum in Chengdu, China.
The Bilateral Infrastructure Law, through which Microwaste received the grant, requests the DOE not to issue grants to companies that are “under the jurisdiction or direction of China” or companies “supplied by a concerned foreign entity.” or use derived battery materials”.
Still, the DOE defended the grant for months, saying the company was, in fact, American and that the grant would eventually allow Microwaste to build manufacturing capabilities on American soil.
“This is a win for taxpayers and American businesses,” House Science, Space and Technology Committee Chairman Frank Lucas, R-Okla., said Monday evening. “On no account should our tax dollars fund a company with ‘significant’ ties to the Chinese Communist Party. The purpose of these funds is to strengthen America’s battery production and supply chain, not China’s stranglehold on these supplies.
“I am pleased with the DOE’s decision, but incredibly disappointed that it took the department six months and multiple letters from our committee to reach such a clear conclusion,” Lucas added. “We will continue to hold the administration accountable for its funding decisions and ensure that American taxpayer dollars are protected from exploitation by the CCP.”
