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Ford CEO Jim Farley announced at a press conference that Ford Motor Company will partner with the world’s largest battery company, a China-based company called Contemporary Amperex Technology, to build an electric vehicle battery plant in Marshall, Michigan, on February 13, 2023 in Romulus, Michigan.
Bill Bogliano | Getty Images News | Getty Images
DETROIT – US lawmakers are seeking to review their licensing deal Ford Motor and China-based CATL, which will allow the automaker to produce battery cells developed by the global supplier at a $3.5 billion plant in Michigan.
In a letter Thursday addressed to Ford CEO Jim Farley, the chairmen of the Chinese Communist Party’s (CCP) House Select Committee and Ways and Means Committee The automaker demanded that it provide a copy of the licensing agreement and any communication about the deal between the two companies as well as between Ford and the Biden administration regarding any potential tax credits.
The letter also asks how many Americans the factory will employ compared to Chinese workers; whether the transaction should qualify for federal tax funding; potential CATL links to forced labor practices; And if the deal really helps reduce the country’s dependence on China for parts and materials for electric vehicles.
The Michigan plant is expected to open in 2026 and employ about 2,500 people, according to the Detroit automaker. It will produce lithium iron phosphate, or LFP, batteries, unlike the much pricier nickel manganese-cobalt batteries the company is currently using. The new batteries are expected to offer various benefits at a lower cost, helping Ford increase electric vehicle production and profit margins.
Ford follows the EV leader Tesla in using LFP batteries in part of its vehicles, in part to reduce the amount of cobalt needed to make battery cells and high-voltage battery packs.
According to the letter, several hundred of the proposed 2,500 jobs Ford manages will be staffed by CATL employees from China until the license agreement expires in 2038.
“Indeed, although the executives of the proposed project will be employees of Ford in the United States, it appears that the project will rely on CATL employees from the People’s Republic of China to maintain operations in the long term,” the lawmakers wrote.
Ford CEO Jim Farley at the automaker’s battery lab in suburban Detroit, announcing a new $3.5 billion electric vehicle battery plant in the state to produce lithium iron phosphate batteries, February 13, 2023.
Michael Weiland/CNBC
Ford has vigorously defended the deal since it was announced in February, saying it would simply license the company’s operations to its rural Michigan facility, which would be a wholly owned subsidiary creating thousands of jobs in the United States.
Ford spokesman TR Reid said on Friday that the company is reviewing the letter but declined to comment directly on the letter.
“Overall, much of what has been said and implied about this project is false. Instead of buying these batteries from suppliers in Asia—as other automakers are doing today—we are investing $3.5 billion to make them in a plant built and operated by a wholly owned subsidiary of Ford, creating 2,500 new American jobs in the process. This is good for customers, good for the country and good for our company,” he said in an emailed statement.
Company officials said they expect the battery cells produced at the factory to be eligible for federal incentives under the Biden administration’s Inflation Reduction Act.
IRA incentives for domestically produced battery cells include credits of $35 per kilowatt-hour produced and $10 per unit. Ford said in May that it expects the plant to have annual production of about 42 gigawatt-hours once it’s fully up and running.
relations with China
The association between Ford and Cattle has been criticized by some Republican lawmakers such as Senator Marco Rubio and Representative Jason Smith, chairman of the House Ways and Means Committee. Smith signed the letter Thursday with Rep. Mike Gallagher.
Gallagher, who chairs the Chinese Communist Party’s House Select Committee, has led several investigations into US-Chinese business interests. The Wisconsin Republican recently questioned US companies’ willingness to work with Chinese companies in light of the Chinese Communist Party’s alleged human rights abuses and military crackdowns.
“You treat the Chinese Communist Party as your trading partner when you do business in China,” Gallagher told reporters earlier this week. “For me, the most fundamental question is why do so many US companies and asset managers want CCP as a business partner?”
House Majority Leader Kevin McCarthy (R-Calif.) speaks to reporters after his election to House Minority Leader for the upcoming Congress with Rep. Jason Smith (R-Missouri) (L) and House Majority Whip Steve Scales (R-LA) in the Longworth House office building on Capitol Hill on November 14, 2018 in Washington, DC.
Chip Somodevilla | Getty Images
Smith previously sent a letter to Farley in April seeking information about the deal with CATL, officially named the contemporary technology company Amperex. The new letter states that Farley’s previous responses “did not provide the level of detail the committee sought.”
CATL also has ties to Xinjiang Lithium through its former senior manager Guan Chaoyu, who bought the brand through a limited partnership after CATL quietly divested its 23.6% ownership interest shortly after the licensing agreement was announced.
“Xinjiang Lithium – which aims to become the largest producer of lithium carbonate in the world – is linked through wholly-owned subsidiaries and other relationships with companies that participate in state-sponsored labor transfer programs in the Xinjiang region,” the lawmakers wrote. Workers in these programs are in many cases transported directly from the camps to the factories and are “under constant supervision.”
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