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US DOE withdraws $200m Microvast grant amid China row

May 26, 2023

The Department of Energy has withdrawn a $200 million grant that had been awarded Microvast – a manufacturer of lithium-ion batteries for energy storage – amid allegations that the company has close ties with the Chinese government and Chinese Communist Party.

Microvast had previously announced plans to build a mass production facility in the US for its polyaramid separator, a high-temperature resistant, fire-retardant component used in lithium-ion batteries. The $200 million DOE grant had been part of a larger investment of $504 million.

US Senator John Barrasso (R-WY), a member of the Senate Committee on Energy and Natural Resources, said: “The Department of Energy has finally retreated from sending US taxpayer dollars to Microvast, an electric vehicle battery company with close ties to Communist China. I’m stunned it took the Biden Administration this long to admit the obvious: no company beholden to Communist China should be considered for US government grants or loans. The administration should immediately reject other applicants with similar ties. It should also overhaul its grant making process and conduct due diligence before issuing press releases.”

In response, Yang Wu, Microvast’s founder, chairman, president, and chief executive officer, said: “The company is surprised by the DOE’s decision to withdraw the grant, which was designed to help build a new facility in Kentucky that would employ hundreds of people. Microvast is based in Texas, its shares are traded on Nasdaq, and the operations for our global business are centralised in the US. Neither the Chinese government nor the Chinese Communist Party has any ownership in the company, nor do they control or influence company operations in any way. The company is therefore considering all of its options.”