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Automaker’s Troubling Deal with Chinese Company Raises Questions About Democrats’ Electric Vehicle Tax Credits

April 17, 2023

Washington, D.C.Taxpayer dollars may be getting funneled to a Chinese company and potential “foreign entity of concern” through its partnership with Ford, thanks to the automaker’s use of electric vehicle tax credits in the Democrats’ so-called Inflation Reduction Act, writes Ways and Means Committee Chairman Jason Smith (MO-08) to Ford CEO Jim Farley in a new letter.

Ford is partnering with China’s Contemporary Amperex Technology Co. LTD (CATL) to spend $3.5 billion on a new electric vehicle battery factory in Michigan. According to Ford’s public statements, the green corporate welfare checks from the Inflation Reduction Act were “incredibly important” in establishing this partnership with a company tied to the Chinese Communist Party. Virginia rejected the same factory because of national security concerns surrounding CATL.

The Biden Administration’s electric vehicle sourcing rules appear to be encouraging American companies to funnel taxpayer money to Chinese companies through similar deals:

This arrangement appears to leverage a loophole in the IRA rules regarding battery components manufactured or assembled by a “foreign entity of concern.” I am alarmed about how Ford has structured this project in the context of the IRA’s clean vehicle credits and am concerned that other automakers may seek to use loopholes in the IRA to avoid guardrails meant to protect American enterprise and workers. Therefore, I write today to seek information about your company’s investments and planned investments connected to the IRA’s clean vehicle credits to better understand how those credits are being used and whether they are working as the Biden Administration and congressional Democrats claimed they would.”

“Green” energy handouts the Inflation Reduction Act are now projected to cost upwards of $1 trillion, at least three times the original projection. Independent analysis shows that money will flow to the wealthy, foreign countries, and major corporations. Instead of moving America’s supply chain out of the Chinese Communist Party’s control, the Biden Administration’s loose interpretation of those rules opens the door for companies tied to the CCP to profit off American tax dollars.

Given concerns that other automakers may follow Ford in partnering with companies that are listed as a “foreign entity of concern” or affiliated with the CCP, Chairman Smith also sent separate letters today to 10 other automakers (Audi of America, BMW of North America, General Motors, Hyundai Motor America, Nissan North America, Rivian Automotive, Stellantis, Tesla, Volkswagen Group of America, Volvo Car North America) that have sold electric vehicles qualifying for tax credits in recent months to inquire whether they too are using loopholes in the IRA to circumvent protections for American workers.

Read the letter here.

READ: Analysis: Democrats’ “Green” Energy Subsidies Costing Taxpayers $1.2 Trillion–THREE TIMES Original Price Tag

READ: Biden Admin Rewards Foreign Countries with Access to American Taxpayer-Funded EV Credits

This post has been updated to include the letters to other automakers.