New government criteria for subsidizing the purchase of electric vehicles announced by the Biden Administration on Friday will likely make it more difficult for consumers to claim the $7,500 tax credit if the EV’s battery features components manufactured by a “foreign entity of concern.”
The new criteria appear to be bad news for Chinese-owned Gotion Inc., which is attempting to build an electric battery manufacturing plant in Mecosta County, and the joint BlueOval EV battery joint venture between Ford Motor Company and Contemporary Amperex Technology Co. Ltd., construction of which has been scaled back significantly in Marshall.
However, the rules could leave the door open for American companies to lease Chinese technology.
According to the Wall Street Journal, the new rules are an attempt to reduce reliance on Chinese-owned businesses. The newspaper quoted U.S. Treasury Secretary Janet Yellen’s Thursday comments during a visit to lithium company Livent in North Carolina.
“Overdependence, including on China, makes America more vulnerable to risks that disrupt our access to that foreign production, from natural disasters, to macroeconomic forces, to deliberate actions such as economic coercion,” Yellen said.
Former U.S. Representative Pete Hoekstra, a retired U.S. ambassador to the Netherlands, has been a vocal opponent of the Gotion plant.
In an interview with The Midwesterner, Hoekstra said there continues to be uncertainty regarding whether the $7,500 federal credit can still be applied toward the purchase of an EV.
“I’m not sure that the guidelines that came out, just reviewing them quickly this morning,” he said. “I’m not sure that this clearly delineates whether CATL and the Gotion batteries qualify.”
He said clarification of the rules must be performed soon to alleviate confusion.
“It’s still not a completed product. Once the technical people and the lawyers look at it and if they come back and say you know hey you know it looks like Gotion and CATL might qualify for the tax credits, obviously we will work with people to submit statements saying this is crazy. U.S. taxpayer money going to the Chinese facilities that are producing the batteries that are tied to the Chinese Communist Party,” he said.
Hoekstra also noted that Gotion has hired “two powerhouse lobbying firms in DC and I’m sure what they’re doing is they’re lobbying up to make sure that their products will qualify for federal tax credits.”
Hoekstra was referring to The Vogel Group and Mercury Public Affairs, which were both hired by Gotion to lobby on behalf of the Chinese-owned company.
In a statement released Thursday, Hoekstra and former Ambassador Joseph Cella expressed their concerns with Gotion’s links to the Peoples Republic of China and the Chinese Communist Party.
“Gotion is hoping to persuade the Biden Administration, Congress, and the public with its deceitful tropes to distract from the fact that it is a part of the unrestricted warfare of the PRC/CCP against the United States and its allies – as continually warned by our national security agencies,” the pair said. “All of those advocating on behalf of Guoxuan and Gotion state level incursions imperil the national security and economic security of the United States of America. We must never put money over country.”