The United States Energy Department, on Monday, informed lawmakers that it will no longer award a $200 million grant to the lithium battery company Microvast Holdings, according to Reuters reports.
The unexpected reversal happened after lawmakers cited concerns over Microvast’s alleged links to China’s government.
Two Republican lawmakers had condemned the Biden administration’s decision to award funding to the company. They wrote a letter last year in the month of December to Energy Secretary Jennifer Granholm, stating Microvast had ties to the Chinese Communist Party (CCP) that raised “serious concerns about the department’s ability to protect US taxpayer’s dollars.”
Representative Frank Lucas, a Republican, said the grant’s cancellation was “a win for taxpayers and American businesses.”
These funds are intended to strengthen America’s battery production and supply chain, not to tighten China’s stranglehold on these supplies,” he said in a statement.
However, the lawmakers did not provide any details about the company’s alleged ties to the Chinese government.
The US Energy Department had been in talks with the lithium battery company over the grant that would help in constructing a plant in Tennessee. The grant emanated from the $1 trillion 2021 bipartisan infrastructure law.
The Texas-based company, Microvast has manufacturing plants in Tennessee, Germany and China.
The Energy Department has “a rigorous review process prior to the release of any awarded funds, and it is not uncommon for entities selected to participate in award negotiations … to not ultimately receive an award,” a spokesperson said.
“What the US government decides about US companies is a matter for the US itself, and I will not comment on it,” said Mao Ning, a spokeswoman at China’s Ministry of Foreign Affairs, when asked about the case at a regular news conference on Tuesday.
Barrasso, on Monday, said the administration of President Joe Biden, a Democrat, should “overhaul its grant-making process and conduct due diligence before issuing press releases” on grants.