With EV batteries in demand, some in GOP say ‘no’ to China
Meeting U.S. goals for electric vehicle adoption may require supplies from China
Two senior Republicans in Congress, Rep. Frank D. Lucas of Oklahoma and Sen. John Barrasso of Wyoming, criticized the Energy Department in December after it awarded $200 million in grant funding to Microvast, a Texas-based lithium battery company with links to China, to build a new battery manufacturing plant in Tennessee.
And this month, Virginia Gov. Glenn Youngkin, a Republican, said he nixed a potential Ford Motor Co. electric-battery plant in the state over worries about national security due to the automaker’s manufacturing ties with China.
As Americans snap up electric cars, some Republicans are adopting a tough-on-China stance even for projects that would create jobs for Americans and perhaps advance U.S. battery-manufacturing prowess.
Experts say the Chinese presence in the electric-vehicle market is already nearly ubiquitous, that corporate partnership between Chinese and foreign automakers, including those in the U.S., is standard and that reaching America’s climate goals without Chinese technology would be exceedingly difficult.
Hewing to a hawkish stance on China is nothing new in Washington. This Congress promises a hardened focus on the country, given the House Select Committee on Strategic Competition that Speaker Kevin McCarthy established to scrutinize China’s communist party.
But blocking jobs and investment on U.S. soil is peculiar, Ian Lange, an economics professor at the Colorado School of Mines, said in an interview. “Governors don’t usually go, ‘Eh, maybe not,’” Lange said, noting that much of the domestic investment in battery plants is flowing to conservative-leaning states.
Governors across the country, including Republicans Mike DeWine of Ohio, Bill Lee of Tennessee and Brian Kemp of Georgia, have welcomed battery plants to their states, as have Democratic governors like Laura Kelly, who broke ground on a $4 billion Panasonic Energy electric-vehicle battery plant in De Soto, Kan., in November.
China dominates the market for minerals that go into EV batteries, Lange said. For the United States and American automakers to get into the electric vehicle market, they have to rely in part on Chinese firms, he said. “It would be really hard to build a robust supply chain without some connection to China.”
Youngkin said he rejected the Ford bid for a plant, which would have been built in partnership with Contemporary Amperex Technology, or CATL, a Chinese firm, over ties between the company and China’s political leadership.
“They are influenced if not controlled by the Chinese Communist Party,” Youngkin said Jan. 20 on Bloomberg TV.
“The structure was CATL and the Chinese Communist Party would have full operational control over the technology,” he said. “I would have loved to have had Ford come to Virginia and build a battery plant if they were not using it as a front for a company that is controlled by the Chinese Communist Party.”
Mike Toman, a senior fellow of the nonpartisan Resources for the Future, said in an interview that significant Chinese firms are often closely linked with the political leadership in Beijing.
“Anything that is part of the larger industrial complex, the Chinese government has some connection with it,” Toman said. “These companies don’t just go off on their own and do stuff.”
When China realized in the 1990s that it could not compete on the world stage with its own gasoline-powered vehicles against Japan, Germany and the U.S., it turned to nurture its own electric-vehicle market.
Decades later, Chinese electric-vehicle manufacturing remains decades ahead of the U.S. and other industrialized nations.
“It’s all part of this long-term strategy of making patient bets,” Toman said.
“China’s way ahead of many of us,” Jane Nakano, senior fellow in the energy security and climate change program at the Center for Strategic and International Studies, a think tank, said by phone.
China sold 6 million to 7 million electric vehicles last year, an uptick from 2021, and at least a quarter of EV sales worldwide are in China, Nakano said.
“It’s not going to be an easy journey” for the U.S. EV market to pull away from China, she said.
Abigail Wulf, vice president and director of the center for critical minerals strategy at SAFE, a nonpartisan energy security advocacy organization, said China “saw electric vehicles as really their chance to leapfrog” industrialized nations.
China produces three-quarters of all lithium-ion batteries and possesses 70 percent of “production capacity” for cathodes and 85 percent for anodes, both vital components of batteries, according to an International Energy Agency report released in July. It also is home to more than half of the world’s lithium, cobalt and graphite processing and refining capacity, the IEA said. All are critical elements of EV battery production.
Across the Pacific Ocean, the U.S. hosts just 10 percent of EV production and 7 percent of battery production capacity worldwide.
“We have to transition to electric vehicles,” Wulf said in an interview, calling grant money from the Energy Department a good step to expand the domestic battery-manufacturing industry.
“We need to be building up processing and component production,” she said. “We want to make sure that we’re not just the assemblers of the future but are actually manufacturing things.”
In 2011, China blocked the export to Japan of so-called “rare earth minerals” — substances used to make hybrid cars, computers, modern televisions, magnets and more — following a dispute over the Japanese detention of a Chinese fishing vessel.
“China has a history of cutting off supplies,” Reed Blakemore, deputy director of the Global Energy Center at the Atlantic Council, said in an interview, citing the 2011 example.
The 2022 climate, tax and health care law includes elements to pull the U.S. away from China’s electric-vehicle dominance. One provision requires that the battery components of an EV be made or assembled in the United States, while another depends on if minerals used in batteries are extracted or processed in the U.S. or a country with which the U.S. has a free-trade agreement.
Sen. Joe Manchin III, D-W.Va., introduced legislation Wednesday that would require domestic manufacturing rules for EVs to be set into place sooner than the law requires.
It takes between five and 10 years to get a mine for critical minerals running, Blakemore said.
“It’s hard at this very early stage to develop supply chains that don’t have touchpoints to China,” he said. “The countries that are able to establish incumbency in these clean-energy technologies are going to have a competitive edge and an economic advantage for the next generation.”
Tyler Duvelius, director of external affairs at the Conservative Energy Network, said few Republicans are vocal EV opponents.
“Very few are actually decrying the development of electric vehicles,” Duvelius said in an interview.
The division and debate between Republicans like Youngkin, who rebuffed the proposal in Virginia, and other GOP leaders who have welcomed EV manufacturing underscores how conservatives have evolved in their views on the technology, Duvelius said.
An example: Every U.S. state, including deep-red Alabama, applied for electric-vehicle charging grant money under the 2021 infrastructure law. Alabama put about $2.5 million in EV funding in its last state budget and is slated to double that sum in its next budget, Duvelius said.
Pointing to the Kennecott copper mine outside Salt Lake City, a project Australian mining conglomerate Rio Tinto operates, Duvelius said the U.S. should be mining critical minerals as a bulwark against China.
Asked about security threats from China, he said, “I think there is a serious concern among Republicans in the critical mineral space.”
While Chinese EVs have not taken off overseas, Chinese EV maker BYD is selling vehicles significantly cheaper than Tesla models, Nakano said.
A report released by Atlas Public Policy, a research firm, found there are 37 EV battery plants planned across the country, though just one of those plants, a $2.4 billion facility Gotion intends to build in Michigan, has direct investment from Chinese firms.
Before entering a joint venture with a Chinese EV company, an American car company will make clear the terms of the deal, including intellectual property, technology and financial details, Toman said.
The sharing of materials, data, designs and technical know-how, known broadly as technology transfer, is common for American and Chinese companies in the EV landscape, experts said.
Worries of Chinese espionage via electric-vehicle plants are likely overblown, Toman said. The bigger hurdle for the U.S. is acquiring minerals for electric-powered vehicles, he said. “That’s probably where our political energy would be best spent at this stage.”
Mike Magner contributed to this report.