Ford’s Partnership with Chinese Battery Maker Has House Republicans Raising Forced-Labor Concerns

Two leading House Republicans sent a letter Thursday to Ford CEO James Farley announcing they are investigating the partnership between the U.S. automaker and China-based battery-maker Contemporary Amperex Technology Co., Limited (CATL).

Select Committee on China chairman Mike Gallagher (R., Wis.) and Ways and Means chair Jason Smith (R., Mo.) explained that while Ford has claimed the partnership will create thousands of American jobs based in a new Michigan plant and further the company’s commitments to human rights and battery-technology advancements, this might not be the case on all three counts.

The representatives have reason to believe that a significant portion of the 2,500 jobs promised will be given to People’s Republic of China (PRC) citizens instead. Gallagher and Smith said they learned several hundred jobs will be given to CATL employees from the PRC and those employees will be kept at the plant until approximately 2038.

“Although the executives of the proposed project will be US-based Ford employees, it appears that the project will rely on CATL employees from the PRC to maintain operations in the long term,” argued the representatives.

“The use of PRC-controlled battery technology in this multi-billion dollar project appears to be a deliberate choice by Ford,” the letter reads.

Additionally, “public financial disclosures and PRC media reporting suggest that shortly following the announcement of the partnership between Ford and CATL, CATL took steps to maintain effective control while appearing to divest its ownership stake in companies based in the Xinjiang Uyghur Autonomous Region (Xinjiang) that allegedly are connected to forced labor practices,” as Gallagher and Smith put it.

The chairmen explained that CATL may be trying to obscure links to a company called Xinjiang Lithium, which aims to become the largest lithium carbonate producer in the world.

Xinjiang Lithium engages in state-sponsored labor transfer programs and the laborers in these programs are “subjected to constant surveillance,” the representatives said in the letter, adding that if the connection to Ford is not severed, the automaker may be in violation of the Uyghur Forced Labor Prevention Act, enacted in 2021.

“Finally, it is not clear that Ford’s licensing agreement will in fact contribute to the growth of the U.S. domestic battery sector and decrease our reliance on foreign countries of concern like the PRC, as many Democrats claimed the Inflation Reduction Act was intended to do,” the representatives explained.

“By entering into a licensing agreement instead of a traditional joint venture with PRC-based CATL, Ford can likely exploit the Section 30D clean vehicle credit aimed at reducing reliance on foreign technology and labor in the design and development of American electric vehicles,” the chairmen said. “Rather than developing American technology, we are concerned that the deal could simply facilitate the partial onshoring of PRC-controlled battery technology, raw materials, and employees while collecting tax credits and flowing funds back to CATL through the licensing agreement.”

According to the letter, Ford may remain dependent on China for critical battery inputs and components, and if that’s the case, “the company will be exposing itself and U.S. taxpayers to the whims of the Chinese Communist Party and its politics,” as the pair put it.

Gallagher and Smith requested further information from Ford pertaining to their investigation.

The oversight effort comes as congressional Republicans, as well as the 2024 Republican field, focus their criticism of the Biden administration on its electric-vehicle push and cozying relationship with China.

In April, the White House announced proposed EPA rules to ensure that electric vehicles make up a supermajority of new auto sales by 2032. In an attempt to make what analysts consider to be an unrealistic transition given demand and the underlying infrastructure, automakers like Ford have had to institute job cuts. Critical minerals are needed to create batteries for electric vehicles and China has a stranglehold on that market, raising concerns the U.S. and its automakers will become more reliant on a hostile power.

According to a February statement from Ford, the automaker is the first to commit to building both nickel cobalt manganese and lithium iron phosphate batteries, the latter of which the CATL partnership facilitates.

“We are committed to leading the electric vehicle revolution in America, and that means investing in the technology and jobs that will keep us on the cutting edge of this global transformation in our industry,” said Ford executive chair Bill Ford.

Republican frontrunner Donald Trump released a video this week in which he claimed only his presidency can save the country from Biden’s “ridiculous Green New Deal crusade.”

“Joe Biden is waging war on the U.S. auto industry, with a series of crippling mandates designed to force Americans into expensive electric cars,” Trump explained.

Seeing an opening, the former president called on the United Auto Workers (UAW) to endorse him. While most unions have rushed to support Biden, the UAW is frustrated with his electric-vehicle push and is withholding its endorsement for the time being.