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Lawmakers Raise Concerns About Ford and Chinese Battery Partner’s Use of Forced Labor

Ford Motor’s licensing agreement with a major Chinese battery maker, Contemporary Amperex Technology Ltd. (CATL), is facing scrutiny from Republican lawmakers. They believe that the agreement could make an American automaker reliant on a company connected to forced labor in China’s Xinjiang region.

The chairs of the House Select Committee on the Chinese Communist Party and the House Ways and Means Committee sent a letter to Ford, demanding more information about the agreement. They raised concerns about Ford’s plan to employ several hundred workers from China at a new battery factory in Michigan.

In February, Ford announced its plan to establish a $3.5 billion factory in collaboration with CATL, the world’s largest maker of batteries for electric vehicles. CATL supplies batteries to major automakers like General Motors, Volkswagen, BMW, and Tesla.

Ford defended the partnership, stating that it would help diversify their supply chain and enable the production of less expensive and more durable batteries in the United States. However, lawmakers pointed out evidence that CATL had not fully divested its ownership of a company it helped establish in Xinjiang, where human rights violations have been identified by the United Nations.

CATL publicly divested its share of Xinjiang Zhicun Lithium Industry Company in March. However, the shares were purchased by an investment partnership that includes a former CATL manager who holds leadership roles in other companies owned by the battery maker. This raised concerns about CATL’s potential links to forced labor.

Lawmakers also criticized Ford’s commitment to employ Chinese workers at the Michigan factory until 2038. Ford has stated that the factory will employ 2,500 U.S. workers.

The lawmakers questioned Ford’s claims that the partnership would create American jobs, promote sustainability and human rights, and advance American battery technology.

Ford spokesperson T.R. Reid said the company would respond to the lawmakers’ concerns in good faith, emphasizing that human rights are fundamental to how Ford does business. CATL responded by stating that it has no equity relationship with the investment partnership that bought the Xinjiang company.

Critics have labeled the collaboration between CATL and Ford a “Trojan horse” for Chinese interests and have called for ending the partnership. They believe that reliance on Chinese technology could become the norm in the U.S. electric vehicle industry.

China’s dominance in electric vehicle batteries raises concerns about the United States falling behind in key technologies. Without access to the most advanced and cost-effective batteries, U.S. automakers may struggle to compete with Chinese rivals and could face higher costs, potentially slowing down the transition to electric vehicles.

China’s control over crucial technologies like batteries also puts the United States in a weaker position strategically. The Biden administration faces a dilemma of reducing reliance on China while hastening the transition to cleaner energy sources.

The solar and electric vehicle battery industry’s exposure to Xinjiang further complicates the situation. The United States has condemned China for carrying out genocide and crimes against humanity in the region.

CATL and its partner registered a lithium processing company called Xinjiang Zhicun Lithium Industry Company in Xinjiang. This company has financial ties to a Chinese electricity company, Tebian Electric Apparatus Stock Company (TBEA), which the United States considers to participate in forced labor.

China’s dominance in electric vehicle batteries, as well as solar panels and wind turbines, has presented significant challenges for Western companies and governments.

Republican lawmakers also raised concerns about whether batteries made at Ford’s Michigan plant would qualify for government tax credits offered as part of the Inflation Reduction Act. The law prohibits foreign entities of concern, but because Ford is licensing CATL technology rather than forming a joint venture, the batteries made in Michigan may still qualify for the incentives.

Ford officials are confident that the facility will be eligible for all the benefits provided by the Inflation Reduction Act.

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