Axios Pro Exclusive Content

Ford faces House GOP probe of China ties

Jul 21, 2023
CATL headquarters in China

The headquarters of Contemporary Amperex Technology Co., Limited (CATL) a global leader in lithium-ion battery development and manufacturing, in Ningde in China's Fujian province. Photo: Zhu Difeng/VCG via Getty Images

Two House committee chairs have launched an investigation into Ford Motor Co. and its relationship with Chinese battery-maker CATL.

Why it matters: The auto industry's relationships with Chinese companies — and the Inflation Reduction Act's consumer EV tax credit — are now in the House GOP's oversight crosshairs.

Driving the news: House select China committee chair Mike Gallagher and Ways and Means chair Jason Smith wrote Ford requesting a copy of the licensing agreement between Ford and Contemporary Amperex Technology Co., Limited to build a battery park in Michigan.

  • It's the same deal that Sen. Joe Manchin was concerned could violate the spirit of the foreign sourcing requirements in the IRA consumer EV benefit.
  • But Republicans are going further. Gallagher and Smith also request "all documents and communications between Ford and the Biden administration referring or relating to the Ford/CATL licensing agreement and/or achievable tax credits."
  • The lawmakers' letter was dated July 20 and shared with Axios today ahead of its public release.

What it's about: The Gallagher-Smith letter centers on whether Ford is making more jobs for Chinese workers than U.S. labor with this deal and if the automaker is knowingly continuing to rely on a region of China with forced labor concerns.

Zoom in: The EV benefit bans vehicles from qualifying if their batteries are made with materials linked to "foreign entities of concern," a legal term federal officials have previously used against Chinese industry titans.

Between the lines: The letter illustrates the potential for Ford to slip into an ugly fight with Republicans in Congress.

What they're saying: Ford spokesperson Melissa Miller said the company is reviewing the letter and “look[s] forward to responding.”

  • “This [new battery plant] is good for our country, good for the planet and good for Ford’s business,” Miller said.

Editor's note: This story has been updated with Ford's response.

Go deeper