Summary:
A senior Republican in Congress, Representative Jason Smith, has sent a letter to Tesla CEO Elon Musk, requesting details about the company’s relationship with Chinese battery manufacturer CATL. Concerns have been raised that electric vehicle subsidies are potentially flowing to foreign entities, which could pose security concerns. Smith highlighted that the House Ways and Means Committee is particularly concerned about CATL’s potential negotiations with Ford. The committee has been investigating Ford Motor’s planned $3.5 billion investment in a battery plant in Michigan that will utilize technology from CATL. The inquiry by Republicans in Congress is because they are monitoring the implementation of new rules regarding future electric vehicle tax credits, as automakers make investment decisions related to producing batteries for EVs.
The United States passed the $430 billion Inflation Reduction Act in 2022, which includes provisions that will prevent future electric vehicle tax credits if battery components are manufactured or assembled by a “foreign entity of concern.” The aim of these rules is to reduce reliance on Chinese supply chains. However, the specific definition of what constitutes a “foreign entity of concern” has not yet been determined, and no foreign battery supplier has been labeled as such.
Representative Smith questioned Tesla’s actions regarding the increase in the production of vehicles that would qualify for clean vehicle credits. In addition to reaching out to Tesla, Smith also wrote to Nissan seeking information about the automaker’s battery suppliers and whether its U.S. manufacturing plans include the production of batteries or battery components for electric vehicles.
Ford, which is awaiting guidance from the U.S. Treasury to ensure compliance with the Inflation Reduction Act, responded to the concerns raised by Smith and the Select Committee on China by stating that it believes U.S. taxpayer dollars should support American manufacturers rather than foreign entities of concern.
No immediate comments have been received from Tesla, Nissan, or the U.S. Treasury.
Sources:
– Reuters