US Senator Wants To Review Ford's Deal With Chinese Battery Maker

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Senator Marco Rubio is concerned the Chinese Communist Party is gaining influence on American soil.

Days after Ford Motor Company and Chinese battery maker Contemporary Amperex Technology Limited (CATL) announced a new $3.5 billion battery production plant in Marshall, Michigan, Senator Marco Rubio of Florida has asked the Biden administration to take a closer look at the agreement due to concerns of Chinese Community Party (CCP) influence.

Rubio said the deal, via his official website, "will only deepen US reliance on the CCP for battery tech, and is likely designed to make the factory eligible for Inflation Reduction Act (IRA) tax credits."

The senior Florida senator, the top Republican on the Senate Intelligence Committee, also wrote to the secretaries of the Treasury, Energy, and Transportation to request a Committee on Foreign Investment in the US review on the agreement between Ford and CATL. Rubio's concerns are not without merit.

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The IRA specifically imposes restrictions on battery sourcing to eliminate the country's dependence on China for EV-related supply chain materials. Michigan lobbied hard to get the new plant, which will create at least 2,500 jobs, following Virginia's decision to reject the plant over concerns about Chinese government influence.

CATL, however, is not owned by the Chinese government, and it currently has 13 facilities in Europe and Asia. Tesla and Honda are also CATL customers.

Ford will fully own the new battery facility, which will officially be called BlueOval Battery Park Michigan, and it will license CATL's technology. Construction on the factory won't get underway until 2026. In the meantime, Ford will buy these vital batteries from CATL.

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The batteries themselves are essential for the automaker's EV plans. The lithium-iron-phosphate (LFP) packs are cheaper to produce compared to the current nickel cobalt manganese (NCM) batteries used in the Mustang Mach-E and F-150 Lightning. The base models for both vehicles will get the new battery packs as standard beginning next year.

Ford says the deal with CATL will help it play catch up with domestic battery production, which is certainly a good thing. However, the current political climate following the shooting down of a Chinese spy balloon over the US is tense, making the timing of the deal's announcement far from ideal.


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