If Rep. John Moolenaar (R-MI-2), the newly minted Chairman of the House Select Committee on the CCP, gets his wish, there won’t be any Chinese EV battery investments in the U.S.
The core issue is whether Chinese companies should qualify for tax credits to build EV batteries in the U.S. under the 2022 Inflation Reduction Act (IRA). Chairman Moolenaar is one of many lawmakers in Congress who thinks they shouldn’t. One of his top targets is Gotion High-Tech, a new EV battery maker that was planning to invest over two billion dollars in a northern Michigan battery manufacturing facility.
“Right now, China is massively subsidizing its auto industry and battery development. In America, we need more time to develop our own battery technology to catch up,” Moolenaar said during a July 26 roundtable discussion in Green Charter Township.
Other than Tesla, which relies primarily on Panasonic and CATL, no American car companies have been able to produce EV batteries to scale. GM’s Ultium battery partners with LG of South Korea to produce what may be the only real U.S. made EV battery. But they have had a hard time rolling these batteries off the assembly line and into cars. Ultium Cells LLC, the 50/50 joint venture with LG Energy Solutions, suspended the construction of a new battery factory this year and their completion of a factory in Michigan, planned to be operational by mid-year 2024 is now postponed until 2025 or later.
Moolenaar’s comments at the roundtable seemed purposed for the workers at Ultium Cells and GM.
“Can you imagine working for an American company, working tirelessly to develop battery technology, and then you find out that your tax dollars are being used to subsidize a competitor from China? I think we all know that is wrong,” he said, with Rep. Darin Lahood (R-IL-16) by his side. Lahood serves on the House Select Committee on the CCP.
Moolenaar’s bill, the No Gotion Act (H.R. 6175), co-sponsored by Lahood, would make CCP-affiliated companies ineligible from receiving the 45x tax credit under the IRA law.
Section 45x allows producers of solar, wind and EV batteries to receive a tax credit for costs associated with manufacturing those items domestically. Chinese companies receive all sorts of incentives and subsidies from the Chinese government, which is why many U.S. lawmakers like Moolenaar and Lahood view this as a double subsidy.
Gotion Vice President of North American Manufacturing Chuck Thelen was invited to the roundtable but did not attend due to family vacation plans, Moolenaar said.
“We have to be dubious and skeptical about Chinese companies, especially any that has ties to the Chinese Communist Party,” Lahood said in his opening remarks.
Horizon Advisory co-founder Emily de la Bruyere spoke at the roundtable. Horizon wrote a report about China’s solar supply chains in February.
“China’s goal is to lock in the dependence of the rest of the world, to make sure we rely on China and the CCP uses that dependence to coerce,” she said. “China prioritizes vertical integration of supply chains, so companies are participants all along that supply chain no matter where they are. Electric vehicles, batteries, and the minerals that go into them are a critical industry – these are major growing markets because they drive jobs and growing industrial capacity. If our business models depend on China, Beijing will use all of this for leverage,” she said, including using American labor as a means to lobby against political pressure to treat China companies differently.
Gotion has been pushing back against plans to derail its investment for the past two years. Removing Gotion from the 45x tax credit could, in theory, upend their plans here.
Last June, the Committee on Foreign Investment (CFIUS) – an agency that decides whether a foreign investment represents a national security risk – said Gotion’s purchase of land in Mecosta County, Michigan was not under its jurisdiction and could not weigh in on the matter.
Months after the CFIUS decision, numerous Republican lawmakers asked the Treasury Department to look again, citing China-government connections to Gotion.
Gotion has deep ties to the CCP, and its shares are listed on the Shenzhen stock exchange.
Gotion was founded in 2006 by Zhen Li. They make lithium ion phosphate batteries, which do not need nickel or cobalt, of which the latter is mostly sourced from the Congo. Gotion is an important Chinese multinational so it goes without saying that its executives must abide by Chinese law or face the consequences.
Political pressure is mounting on China companies because of the IRA.
The lead country investing in the U.S. solar industry, in terms of number of companies announcing new investments, are all from China.
In the automotive space, Ford signed a deal with CATL shortly after the IRA became law. CATL is a Chinese company and the world’s leading EV battery designer and producer. Due to a number of factors, including prevailing political headwinds, the investment was put on hold in September. It has since been scaled back in size but is currently being built out to produce batteries for smaller EVs.
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CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
China EV Battery Maker Gotion Faces Challenges by Chairman of House Select Committee on the CCP
If Rep. John Moolenaar (R-MI-2), the newly minted Chairman of the House Select Committee on the CCP, gets his wish, there won’t be any Chinese EV battery investments in the U.S.
The core issue is whether Chinese companies should qualify for tax credits to build EV batteries in the U.S. under the 2022 Inflation Reduction Act (IRA). Chairman Moolenaar is one of many lawmakers in Congress who thinks they shouldn’t. One of his top targets is Gotion High-Tech, a new EV battery maker that was planning to invest over two billion dollars in a northern Michigan battery manufacturing facility.
“Right now, China is massively subsidizing its auto industry and battery development. In America, we need more time to develop our own battery technology to catch up,” Moolenaar said during a July 26 roundtable discussion in Green Charter Township.
Other than Tesla, which relies primarily on Panasonic and CATL, no American car companies have been able to produce EV batteries to scale. GM’s Ultium battery partners with LG of South Korea to produce what may be the only real U.S. made EV battery. But they have had a hard time rolling these batteries off the assembly line and into cars. Ultium Cells LLC, the 50/50 joint venture with LG Energy Solutions, suspended the construction of a new battery factory this year and their completion of a factory in Michigan, planned to be operational by mid-year 2024 is now postponed until 2025 or later.
Moolenaar’s comments at the roundtable seemed purposed for the workers at Ultium Cells and GM.
“Can you imagine working for an American company, working tirelessly to develop battery technology, and then you find out that your tax dollars are being used to subsidize a competitor from China? I think we all know that is wrong,” he said, with Rep. Darin Lahood (R-IL-16) by his side. Lahood serves on the House Select Committee on the CCP.
Moolenaar’s bill, the No Gotion Act (H.R. 6175), co-sponsored by Lahood, would make CCP-affiliated companies ineligible from receiving the 45x tax credit under the IRA law.
Section 45x allows producers of solar, wind and EV batteries to receive a tax credit for costs associated with manufacturing those items domestically. Chinese companies receive all sorts of incentives and subsidies from the Chinese government, which is why many U.S. lawmakers like Moolenaar and Lahood view this as a double subsidy.
Gotion Vice President of North American Manufacturing Chuck Thelen was invited to the roundtable but did not attend due to family vacation plans, Moolenaar said.
“We have to be dubious and skeptical about Chinese companies, especially any that has ties to the Chinese Communist Party,” Lahood said in his opening remarks.
Horizon Advisory co-founder Emily de la Bruyere spoke at the roundtable. Horizon wrote a report about China’s solar supply chains in February.
“China’s goal is to lock in the dependence of the rest of the world, to make sure we rely on China and the CCP uses that dependence to coerce,” she said. “China prioritizes vertical integration of supply chains, so companies are participants all along that supply chain no matter where they are. Electric vehicles, batteries, and the minerals that go into them are a critical industry – these are major growing markets because they drive jobs and growing industrial capacity. If our business models depend on China, Beijing will use all of this for leverage,” she said, including using American labor as a means to lobby against political pressure to treat China companies differently.
Last June, the Committee on Foreign Investment (CFIUS) – an agency that decides whether a foreign investment represents a national security risk – said Gotion’s purchase of land in Mecosta County, Michigan was not under its jurisdiction and could not weigh in on the matter.
Months after the CFIUS decision, numerous Republican lawmakers asked the Treasury Department to look again, citing China-government connections to Gotion.
Gotion has deep ties to the CCP, and its shares are listed on the Shenzhen stock exchange.
Gotion was founded in 2006 by Zhen Li. They make lithium ion phosphate batteries, which do not need nickel or cobalt, of which the latter is mostly sourced from the Congo. Gotion is an important Chinese multinational so it goes without saying that its executives must abide by Chinese law or face the consequences.
Political pressure is mounting on China companies because of the IRA.
The lead country investing in the U.S. solar industry, in terms of number of companies announcing new investments, are all from China.
In the automotive space, Ford signed a deal with CATL shortly after the IRA became law. CATL is a Chinese company and the world’s leading EV battery designer and producer. Due to a number of factors, including prevailing political headwinds, the investment was put on hold in September. It has since been scaled back in size but is currently being built out to produce batteries for smaller EVs.
MADE IN AMERICA.
CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
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