Ways and Means Chairman Questions Ford's EV Battery Partnership as Forced Labor Risk
The chairman of the House Ways and Means Committee and the chairman of the House Select Committee on China told Ford its response to its earlier letter "did not provide the level of detail sought by the Committee," and they continue to have questions about whether Ford's partnership with a Chinese electric vehicle battery maker will obscure Chinese imports in the EV batteries produced in Michigan, and whether those inputs will be produced with forced labor.
They publicized their follow-up letter on July 21.
They also question whether these batteries deserve tax credits designed to sever the North American EV battery supply chain from the Chinese EV battery supply chain, given that CATL (Contemporary Amperex Technology Co., Limited) employees will work in Michigan through 2038.
They said that just after the announcement of the licensing agreement between Ford and CATL, CATL divested a 23.6% ownership stake in Xinjiang Lithium, a company whose subsidiaries employ transferred Uyghur workers. Ways and Means Chairman Jason Smith, R-Mo., and Select Committee Chairman Mike Gallagher,R-Wis., wrote, "The laborers in these programs are in many cases 'transferred directly from camps to factories' and 'subjected to constant surveillance.'" Goods made by Uyghurs transfered to factories by the Chinese government are presumed to be made with forced labor.
But, within 48 hours of that divestment, the congressmen say, more than 60% of Xinjiang Lithium was purchased by a partnership managed by a former senior CATL manager, and that CATL money helped buy that stake.
"In light of evidence regarding CATL’s continuing relationships with Xinjiang-based lithium producers, the proposed partnership with CATL suggests that Ford is not exiting supply chains, ventures, and/or investments connected to Xinjiang," they wrote.
They asked for numerous documents and answers by Aug. 10, including:
- A copy of the licensing agreement between Ford and CATL -- including all appendices -- in both English and Chinese
- All documents and communications exchanged between Ford and CATL referring or relating to the licensing agreement in the original language.
They wrote: "We understand that a Ford wholly-owned subsidiary will be responsible for sourcing precursor cathode active materials and cathode active materials for the BlueOval Battery Park Michigan. Will CATL or its subsidiaries be the primary source of precursor cathode active materials and cathode active materials? What percentage of those materials will be sourced from the PRC [People's Republic of China]?"
They asked if CATL would import any other Chinese components to produce EV batteries in Michigan, and if so, what is the expected quantity, and asked Ford to identify any components that would only come from China. They also asked Ford how it will ensure that none of the CATL imports contain Xinjiang inputs or were made with forced labor, given Chinese punitive actions against social compliance auditors and rules that companies may not disclose damaging information.
A Ford spokesperson told International Trade Today that the company is reviewing the letter, and will respond soon. However, the company added: "There has been a lot of misinformation about Ford’s new battery plant in Marshall, Michigan. Here are the facts: Ford alone is investing $3.5 billion and will own and run this plant in the United States, instead of building a battery plant elsewhere or exclusively importing LFP batteries from China like our competitors do. We’re creating 2,500 new U.S. jobs while helping to strengthen domestic manufacturing and supply chains and reduce carbon emissions. This is good for our country, good for the planet and good for Ford’s business."