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US lawmakers demand documents on Ford battery partnership with CATL

[September 27, 2023] By David Shepardson

WASHINGTON (Reuters) - The chairs of three U.S. House of Representatives committees demanded Ford Motor turn over documents tied to its partnership with Chinese battery company CATL and threatened to call CEO Jim Farley to testify before Congress.

Republicans Jason Smith, Cathy McMorris Rodgers and Mike Gallagher - who chair the Ways and Means, Energy and Commerce and China select committees - jointly wrote to Farley with a new deadline seeking documents about the CATL partnership and the automaker's plan to build a $3.5 billion battery manufacturing plant in Michigan using Chinese technology.

"Ford’s ongoing refusal to provide substantive responses ... raises serious concerns regarding its licensing agreement with CATL," the lawmakers wrote on Tuesday in a previously unreported letter seen by Reuters.

Republicans have been probing Ford's battery plant plan for months over concerns it could facilitate the flow of U.S. tax subsidies to China and leave Ford dependent on Chinese technology.

On Monday, Ford said it paused work on the Michigan battery plant, citing concerns about its ability to operate it competitively as it remains in broader contract negotiations, drawing condemnation from the United Auto Workers union.

The lawmakers want documents including the Ford/CATL licensing agreement, communications between Ford and the Biden Administration referring to the licensing agreement and achievable tax credits, and records of Ford's knowledge of CATL's "apparent attempt to shield its connection to Xinjiang-based companies."

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The Ford name plate is seen on the interior of the Ford F-150 Lightning pickup truck during a press event in New York City, U.S., May 26, 2021. REUTERS/Brendan McDermid

Human rights groups accuse Beijing of abuses against Xinjiang’s Uyghur inhabitants, including the mass use of forced labor in internment camps. China denies the allegations.

CATL did not immediately respond to an emailed request for comment.

The lawmakers said if Ford does not disclose records sought previously by Oct. 6 "we will consider other means to obtain the documents, including compulsory process or insisting that you appear before Congress to publicly explain your failure to comply."

A Ford spokeswoman said the company had answered multiple congressional letters and "thoroughly responded to questions and shared detailed information about Ford’s work to strengthen domestic battery manufacturing" but did not say if the company would comply with the document request.

In 2022, Congress passed legislation barring $7,500 in future consumer EV tax credits if any battery components are manufactured or assembled by a "foreign entity of concern."

Ford has been awaiting guidance to determine if batteries produced by the Marshall plant would run afoul of the requirements.

Last week, Tesla CEO Elon Musk also faced questions from Smith about the automaker's relationship with CATL.

(Reporting by David Shepardson; Editing by Sonali Paul)

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