Posted on April, 17 2023
When the Department of Energy announced a $200 million
grant to battery maker Microvast Holdings for a plant in
northern Tennessee last October, it seemed like a win-win.
The funds would enable the Texas-based company to
quickly ramp up production of its cutting-edge technology,
and bolster the U.S.’s battery supply chain — a key goal of
the Biden administration’s $1 trillion infrastructure spending
package. In the following months, however, Microvast found itself
embroiled in a political controversy that has left the status of
the DOE grant in doubt.
The dispute stems from Republican lawmakers’ criticism of
the company’s ties to China. In multiple letters to Secretary
of Energy Jennifer Granholm, Senator John Barrasso (R-WY)
and Congressman Frank Lucas (R-OK) have pointed out that
the majority of Microvast’s assets and revenues are in China,
and argued that the “DOE’s actions directly undermine the
United States’ position in its race against China for
The DOE, which did not respond to requests for comment, is
now reviewing the grant, in line with its normal procedures.
Microvast says that despite the scrutiny, it is optimistic that it
will receive the funding due to the merits of the project —
whose location has now switched to Kentucky, and which it
is building in partnership with General Motors.
Can we realistically expect the U.S.
having no exposure to China on
battery development, given their
status in the supply chain and
dominating the sector to date? I think
the answer to that is no.
Ben Steinberg, a former DOE official
who now co-chairs the critical
infrastructure practice at Venn
Whatever the outcome, the episode lays bare the political
liability that connections to China have come to represent for
U.S. companies, while underscoring just how difficult it is for
the government to build up American supply chains in
sectors like battery technology without funding companies
with at least some ties to China.
“We need to go into this eyes wide open, but also with the
recognition that China started down this path many years
before us,” says Ben Steinberg, a former DOE official who
now co-chairs the critical infrastructure practice at Venn
Strategies, a lobbying firm which represents companies in
the sector, not including Microvast.
“Can we realistically expect the U.S. having no exposure to
China on battery development, given their status in the
supply chain and dominating the sector to date? I think the
answer to that is no,” he says. “The question is, are there
good ways for the government and industry to build a
resilient supply chain together that limits risks? The answer
Founded in Houston in 2006, Microvast is run by Wu Yang, a
Chinese American entrepreneur who attended Southwest
Petroleum University in Chengdu and went on to run
Zhejiang Omex Environmental Engineering, a Chinese water
purification company which was acquired by Dow Chemical
in 2006. Wu currently owns 27.5 percent of Microvast,
according to filings.
Microvast’s R&D and manufacturing facility in Huzhou, Zhejiang, China. Credit: Microvast
The company does have an extensive footprint in China,
generating nearly two-thirds of its revenue there in 2022.
Until two years ago, all of Microvast’s manufacturing
capacity was in Huzhou, a city near China’s eastern coast.
The company also operates a 75,000 square foot R&D
center in Huzhou, and owns four subsidiaries in China.
In 2011, Microvast received $25 million from the International
Finance Corporation, the World Bank’s investment arm,
before raising $400 million in a 2017 funding round for one
of its Chinese subsidiaries from two major Chinese
investment firms, state-run CITIC Securities and CDH
Investment. Ying Wei, managing partner at CDH, sits on
Still, the company is now U.S. listed: it went public on
Nasdaq two years ago through a reverse merger with a
special purpose acquisition company (SPAC) called Tuscan
Holdings. Microvast’s shares shot up by over 50 percent
after the October DOE announcement, before steadily
declining since then amid uncertainty about the grant. Its
current market value is around $400 million.
Am I aware of China and U.S. tension?
Sure. Are we the right company they
should be focused on to make their
example? Absolutely not.
Shane Smith, Microvast’s chief
operating officer none. Despite the company’s initial focus on China, Shane Smith,
Microvast’s chief operating officer, emphasizes the
company’s growing presence in Europe and the U.S. due to
increasing demand outside of China — in 2021, the company
completed a Berlin plant, and the company has a new testing
center in Colorado and manufacturing plant in Tennessee.
“Here’s an American company that has just gotten in the
crossfires, that is spending money in the right way to make
the United States electrification supply chain stronger,”
Smith says. “Am I aware of China and U.S. tension? Sure. Are
we the right company they should be focused on to make
their example? Absolutely not.”
The company’s evolution,
Smith says, is reflective of the
broader market, in which
Chinese battery makers like
CATL and BYD have become
global leaders in production
following years of government
“If you were going to try to sell
any kind of battery that you
made before 2010, the only
place you could really sell that
was in Asia, specifically China,
because that was the China
government’s goal was to get going on electrification. And
so you had to build a battery there.” If the company had tried
to build an American presence earlier it wouldn’t have been
successful, he argues, citing the fact that many lithium ion
battery makers in the U.S. went out of business at that time.
The grant to Microvast was one of 21 the DOE has awarded
to battery projects across the country, with money allocated
from the infrastructure bill signed last year. The Microvast
project, which the company expects to create 562 new jobs,
is focused on battery “separators” — the membrane
between the two sides of a battery. The company
manufactures separators with a patented material similar to
that used in bulletproof vests or firefighting garments, thus
“Improv[ing] safety for electric vehicles” and “enable[ing]
faster charging and longer battery life,” according to DOE
The Republican lawmakers’ criticism of the DOE grant to
Microvast centers on fears that the U.S. government will be
funding the development of intellectual property which could
land in Chinese hands, as well as concerns that the DOE did
not conduct adequate due diligence before allocating money
to the company.
Microvast executives, including founder and CEO Wu Yang (center) outside the Orlando
R&D facility. December 10, 2021. Credit: Microvast
Microvast, which opened a second R&D facility in Florida in
2016, maintains that although development of its separator
technology started in China, one of the company’s U.S.
subsidiaries own the IP. It also argues that the DOE is
already familiar with its global operations from past
experience of working together — for example, the
department awarded Microvast $1.5 million in 2018 as part
of a project to fund research on fast battery charging.
“The decision to award a grant to a company with well documented.
ties to the Chinese Communist Party raised red.
flags,” Congressman Lucas, who chairs the House Science,
Space, and Technology Committee said in a statement to
The Wire. “Our concern is much broader than any individual.
company—our primary goal is to make sure that the
Department of Energy is doing its due diligence on everyone.
of these awards, which means conducting appropriate.
investigations and verifying that there are guardrails in place.
that will protect this taxpayer investment.”
In a letter reviewed by The Wire from Kathleen Hogan, a DOE
official, in response to Senator Barrasso’s concerns, she
wrote: “The technology was developed in China and would
be manufactured in the U.S. for the first time, obviating the
typical risk of intellectual property loss and jump-starting
progress toward the Administration’s goal of rebuilding U.S.
Big picture, the government should be
wary of any company with reliance on
China, either in manufacturing or
research. Emily de La Bruyère, co-founder of
Horizon Advisorynone Smith, the Microvast COO who is a former submarine officer
in the U.S. Navy, has been reaching out to lawmakers to
dispel their concerns, but he says that none have been
interested in engaging with him.
“China tech issues have become a major focus point of both
political parties. There is a good reason behind that,” says
Fabian Villalobos, an associate engineer at the RAND
Corporation, citing the long history of Chinese IP theft
But he adds that while there is a degree of risk involved in a
project like Microvast’s, the government should be
considering whether the benefits outweigh the potential
costs. “If part of the risk is IP transfer, either licit or illicit,
then that’s a risk we take on. But the benefit is that we have
a more resilient industrial base because China no longer
dominates battery materials. I believe it is a net benefit.”
Others have a different calculus. “Big picture, the
government should be wary of any company with reliance on
China, either in manufacturing or research,” says Emily de La
Bruyère, co-founder of Horizon Advisory, a China focused
consultancy. “I don’t think we should be letting companies
play both sides. We are only cementing a system of
Microvast, in the meantime, appears determined to keep
playing both sides: In 2022, it obtained a $111 million loan
from a group of lenders led by a Chinese bank to fund
expansion of its Huzhou facility. Smith, Microvast’s COO,
says it remains an “America first” company, but that it is still
approaching China “opportunistically, just like any good
General News / Posted on April, 13 2023 / Author: By Timothy Cama, Hannah Northey
GREENWIRE | The Biden administration’s climate change agenda has spurred an unprecedented lobbying boom driven by mineral and battery companies in search of incentives for expanding North American operations.
More than 30 of those companies retained lobbying firms for the first time since President Joe Biden took office in 2021, an E&E News analysis of disclosure records found, while many others boosted their lobbying might or greatly increased spending.
The National Mining Association, which had reduced its spending amid the coal downturn, more than doubled its federal lobbying expenditures from 2020 to 2022, when it reached $2.2 million.
The rush to influence lawmakers and agencies is evidence of the challenges and opportunities related to meeting the president’s goal of seeing half of all new cars sold be zero-emission vehicles by 2030. That push requires a mineral and battery production capacity that largely resides abroad — something policymakers are scrambling to change.
“There’s a real frenzy of activity and a genuine excitement in the manufacturing spaces that were very precarious investments a short time ago, said Mike Carr, a former Hill aide and Obama administration official who is now partner at the bipartisan lobby firm Boundary Stone Partners. “So everybody’s scrambling to ensure that their voices are heard.”
Boundary Stone has signed clients including solar cell maker Hanwha Q Cells, battery storage company Antora Energy Inc. and battery maker Form Energy. The firm last year launched the Coalition for American Battery Independence to push for U.S. battery incentives.
Critical minerals, battery and other clean-tech companies have already scored major policy wins during the Biden administration and are now working to secure their vision of how the infrastructure law, the Inflation Reduction Act and other initiatives are implemented.
The Inflation Reduction Act, passed by Democrats under budget reconciliation, includes tax incentives for electric vehicles, but with certain sourcing mandates championed by Senate Energy and Natural Resources Chair Joe Manchin (D-W.Va.) to increase domestic production of minerals and other components.
The Treasury Department last month released long-awaited guidance on how to implement those requirements. It’s a document lawmakers, automakers and miners have been eager to shape.
Biden has also invoked a Cold War-era law to boost critical minerals. The Inflation Reduction Act, or IRA, appropriates up to $500 million under the Defense Production Act to help U.S. and Canadian companies strengthen mineral supply chains.
Other wins: The Department of Energy got $55 billion from IRA for loans to support and scale up EVs and battery components, and the $1.2 trillion bipartisan infrastructure law included $7 billion to boost domestic battery supply chains.
LG Chem Ltd., Syrah Resources Ltd. and Ioneer Ltd. have all been offered loans or loan guarantees from DOE for various projects. Since 2021, LG Chem has spent $1.2 million in lobbying and Ioneer has spent $250,000.
Many companies are also pushing Biden and Congress to accelerate the permitting process for infrastructure projects, including transmission lines to help meet the administration’s green goals. It’s currently the most prominent energy and environment legislative fight.
And then this week, EPA announced draft car tailpipe emissions rules that could lead to electrification of 67 percent of new sedans, crossovers, SUVs and light trucks.
Ben Steinberg, executive vice president and co-chair of Venn Strategies’ critical infrastructure group, said the focus on mining and EV battery supply chains is part of across-the-board growth in clean energy manufacturing. Steinberg currently leads the Battery Materials and Technology Coalition.
“The mining sector is now part of that story for the first time in the country,” said Steinberg. “It is an exceptional time across many different sectors right now.”
Critical mineral and battery companies have long been lobbying the federal government and were keen on former President Donald Trump’s support for mining.
But the advocacy accelerated with Biden setting climate and manufacturing goals, and has continued as the president’s agenda materializes, said Joe Britton, principal of Pioneer Public Affairs.
“Biden put a clear focus on where he wants to see manufacturing growth, and the emission reduction potential that’s inherent in battery utilization is enormous,” said Britton, former chief of staff to Sen. Martin Heinrich (D-N.M.), who has made electrification a priority.
Political prioritization is important, he said.
“Some of these big multinational corporations can build anywhere in the world, and it’s really important for them to hear that this is a priority for the federal government,” said Britton.
“It matters to these companies in a big way when they’re deciding where to build billion-dollar facilities,” he said. “Knowing that there’s durable political support for this manufacturing and job growth really matters.”
Pioneer’s lobbying clients include the Solar Energy Industries Association and the Zero Emissions Transportation Association, or ZETA.
Among the companies that have retained lobbyists since 2021 are Piedmont Lithium Inc., which is hoping to mine lithium in North Carolina. It retained Venn Strategies in 2021 to lobby on matters surrounding mining, processing and manufacturing of lithium, and has paid $360,000.
“Venn Strategies has been very helpful as we develop our projects, given their strategic importance in boosting the domestic production of critical battery materials, and as we move through the grant selection and loan application processes with the U.S. Department of Energy,” said Malissa Gordon, Piedmont’s vice president of government relations.
“Building a robust EV supply chain is a key initiative for the U.S., so there is a lot of opportunity to engage with D.C. stakeholders as the U.S. builds its policies,” she said.
ElementUS Minerals retained the firm Brownstein Hyatt Farber Schreck last year and has paid it $80,000. The company plans to extract and recycle minerals like rare earths, iron and titanium.
Graphite One, a Vancouver, Canada-based company exploring a graphite mining and processing site in Alaska, retained Capitol Hill Consulting Group’s Kristina Wilcox, a former Capitol Hill aide, in 2021 and has paid the firm $210,000.
US Strategic Metals, formerly Missouri Cobalt, hired Akin Gump Strauss Hauer & Feld last year, and former Rep. Filemon Vela (D-Texas) is part of the team representing the company. US Strategic Metals has paid the firm $120,000.
The lobbying effort is reaching beyond the United States, to include controversial efforts to mine the ocean floor for mineral-rich nodules. Vancouver-based Metals Co., which is hoping to secure permission to mine a swath of the Pacific Ocean seabed, hired Bracewell LLP.
Scott Segal, a partner at Bracewell, said there’s no question that the critical mineral supply chains are turnkey for the clean energy transition and EV battery production will stall without the necessary minerals.
Environmentalists, who oppose deep-sea mining, have expressed alarm with the rush to mine for clean tech and have called for new rules to protect the environment, secure community consent and make sure taxpayers get their due. But the prospects of mining reform in Congress are dim, with Republicans controlling the House and many Democrats on board with more domestic production.
“The challenge for batteries isn’t just one of scale, but one of time,” said Segal. “That’s put the focus on deep-sea mining. That’s why there’s so much interest in it.”
Companies are also keen on the administration’s implementation of the Inflation Reduction Act’s advanced manufacturing tax credit for clean energy and a bonus to the wind and solar credits for equipment that has a certain level of domestic content.
“Manufacturers are sitting there waiting to make multimillion-dollar bets if it comes out the way that they’re looking for,” said Boundary Stone Partners’ Carr.
Posted on March, 31 2023 / Author: BY HANNAH NORTHEY, DAVID FERRIS
Posted on March, 3 2023 / Author: Dan Zukowski
Posted on March, 1 2023 / Author: Camellia Moors ft Ben Steinberg
Posted on February, 21 2023 / Author: Rail Security Alliance
Posted on February, 8 2023
When global rail manufacturer CRRC (China Railway Rolling Stock Corp.) entered the U.S. passenger rail market nearly ten years ago, winning a $560 million contract to manufacture new railcars for the Massachusetts Bay Transportation Authority (MBTA), its bid amounted to only about half as much as its market competitors. It was the Chinese SOE’s (state-owned enterprise) first entry into the U.S. transit market, adding to its already monopolistic self-declared 83% share of rail rolling stock manufacturing worldwide.
In the years since MBTA turned its passenger train manufacturing over to China, CRRC has been awarded more than $2.6 billion in U.S. taxpayer-supported contracts to make passenger railcars for Boston, Chicago, Philadelphia and Los Angeles. Federal funding played a part in three of the four contracts. In the process, according to an Oxford Economics report (download below), the U.S. has lost thousands of domestic freight rail manufacturing and supply jobs to China.
As the U.S. Trade Representative (USTR) conducts its required review of Trade Act of 1974 Section 301 tariffs, it’s worth remembering that CRRC is just the kind of foreign entity that Section 301 of the Trade Act is intended to guard against.
In a letter to USTR Ambassador Katherine Tai, the Rail Security Alliance—representing domestic rail manufacturers and suppliers and the industry’s 65,000 family-wage jobs—urged the Biden Administration to maintain Section 301 tariffs “on all railcar parts, as this represents U.S. policy that has spanned Republican and Democratic Administrations and has wide bipartisan support on Capitol Hill.”
In calling on USTR and the Biden Administration to maintain these tariffs, RSA joins other American manufacturers and suppliers who urgently called on the need to safeguard the U.S. from China’s unfair trade practices.
Meanwhile, recent news coverage reports that CRRC may be blaming its litany of quality problems, train derailments, years-long production delays and management failures on Section 301 tariffs. As Commonwealth Magazine recently reported, an MBTA executive said the agency may be now looking “to ease up on tariffs and sanctions against China.” For the record, that is exactly the wrong thing to do.
While CRRC has made alarming inroads in the U.S. transit arena, quality issues aside, the threat to America’s freight railcar manufacturing industry is equally imminent.
Addressing Ambassador Tai, RSA commented on the critical role of freight rail in America’s critical infrastructure: “It safely and efficiently carries hazardous materials, military equipment, key commodities, energy products and everyday goods. In 2013, President Obama and Vice President Biden recognized freight rail’s importance to the security of critical infrastructure by issuing Presidential Policy Directive 21 (PPD-21), explicitly including the freight rail industry. It is vital to every state in the U.S.”
One only must look at Australia to see CRRC’s designs for the American freight rail market. In less than a decade, CRRC employed anti-competitive tactics to entirely wipe out Australia’s once-thriving domestic railcar manufacturing industry. Today, Australia’s railcar manufacturing is completely controlled by CRRC.
Then there’s the issue of China’s anticompetitive practices toward foreign firms in China: “For instance, foreign market access to China’s rail markets has decreased dramatically in recent decades. The Association of the European Rail Supply Industry (UNIFE) found that the Chinese rail market was only 17% accessible for the period of 2017–2019, as compared with 63% for the period of 2009–2011. China also has a long, continuing pattern of forced technology transfer in the rail sector.”
Given China’s playbook—as well as the fact that CRRC receives significant subsidies from the Chinese government, including $271 million in explicit government subsidies in 2020 and larger implicit subsidies—maintaining Section 301 tariffs on all rail components is not optional.
“The Center for Strategic and International Studies estimated that direct subsidies to Chinese firms represent less than 20% of total industrial spending. For instance, as one of the ten sectors China targets under the Made in China 2025 strategy, CRRC is also eligible to receive preferential subsidies and tax incentives for R&D. In addition, China reduced the income tax rate for high-tech firms like CRRC from 25% to 15% and raised the rate of additional deductions of R&D expenses from 50% to 75%.”
Equally troubling is the fact that CRRC has twice been included on the U.S. Defense Department entity list, and that company executives and employees have direct ties to the Chinese Communist Party and the People’s Liberation Army.
All of these factors enable CRRC to significantly underbid private companies for global rolling stock contracts, posing a direct threat to our domestic rail manufacturing industry and national security. All these factors warrant maintaining Section 301 tariffs on all rail components.
Voicing the interest of 65,000 American workers, RSA called on USTR and the Biden Administration to uphold America’s interests:
“Section 301 of the Trade Act of 1974 is a key enforcement mechanism that can be used to address a wide variety of discriminatory acts, policies and practices of U.S. trading partners. Current Section 301 tariffs are vital to push back aggressively and appropriately on China.”
And there’s no entity more in need of push-back than CRRC.
General News / Posted on January, 18 2023 / Author: BY CAITLIN OPRYSKO
General News / Posted on January, 18 2023
General News / Posted on December, 19 2022 / Author: Emilia DiSanto & Sam Goodstein
Posted on December, 5 2022
Emma Bishop, Assistant Vice President with Venn Strategies takes part in a panel discussion on energy.
Posted on December, 5 2022
December issue of CKJ, Clinical Kidney Journal, Volume 15, Issue 12, December 2022, Pages 2177–2185.