Lawmakers are challenging Ford and China’s battery partner over forced labor

A partnership between Ford Motor Co. and a major Chinese battery maker faces scrutiny from Republican lawmakers, who say it could make a US automaker dependent on a company with ties to forced labor in China’s Xinjiang region.

In a letter sent to Ford on Thursday, the chairmen of the CPC House Select Committee and Ways and Means Committee demanded more information about the partnership, including what they said was a plan by Ford to hire several hundred workers from China at a new battery plant in Michigan.

Ford announced in February that it plans to build a $3.5 billion plant using technology from Amperex Technology Ltd., better known as CATL, the world’s largest maker of electric vehicle batteries. CATL produces about a third of electric vehicle batteries globally and supplies General Motors, Volkswagen, BMW, Tesla and other major automakers.

Ford has defended the partnership, saying it will help diversify Ford’s supply chain and allow a battery that is less expensive and more durable than existing alternatives to be made in the United States for the first time, rather than imported.

But the lawmakers, who have previously criticized the partnership, cited evidence that CATL had not relinquished ownership of a company it helped establish in Xinjiang, where the United Nations is located. determined Systematic violations of human rights.

CATL publicly divested its stake in Xinjiang Zhicun Lithium Industry Company, in March, after announcing its deal with Ford. But the shares were purchased through an investment partnership in which CATL has a partial stake and Former CATL Director Who holds leadership positions in other companies owned by the battery maker, company records show.

The circumstances of the sale raise “serious questions about whether CATL is trying to hide links to forced labor,” write representatives Mike Gallagher of Wisconsin, chair of the select committee, and Jason Smith of Missouri, chair of the Ways and Means Committee.

The lawmakers, citing details of Ford’s licensing agreement on file with the select committee, also criticized the automaker’s commitment to employ several hundred Chinese workers. Lawmakers said employees from China will set up and maintain CATL equipment at the Michigan plant through about 2038. Ford said the plant is expected to employ 2,500 American workers.

“Ford argued that the deal would create thousands of American jobs, advance Ford’s commitments to sustainability and human rights, and lead to American battery technology developments,” they wrote. “But the newly discovered information raises serious questions about each claim.”

T.R. Reed, a Ford spokesman, said the company was reviewing the letter and would respond in good faith. He said that human rights are central to how Ford operates, and that the automaker has been meticulous in assessing such issues.

“Much talk and insinuation has been made about this project incorrectly,” said Mr. Reed. “At the end of the day, we believe that creating 2,500 good paying jobs with billions of dollars of new investment in the United States for the great technology that we will use in great electric vehicles is a good thing all the way.”

CATL’s collaboration with Ford could pioneer the electric vehicle industry in the United States. Critics have described the convention as a “Trojans” For Chinese interests called for Spoiling the partnership. If successful, they say, reliance on Chinese technology could become the standard for the electric vehicle industry in the United States.

China’s control of key technologies like batteries could ultimately leave the United States “in a much weaker position,” said Eric Gordon, an assistant professor at the University of Michigan’s Ross School of Business.

“The profit margins go to the innovators who deliver the advanced technology, not the screwdriver people who collect the advanced technology,” he said.

But CATL and other Chinese companies have battery technology not readily available from suppliers in the United States or Europe. The Michigan plant will be the first in the United States to produce so-called LFP batteries that use lithium-iron phosphate as the main active materials.

They are heavier than the lithium-nickel-manganese batteries currently used by Ford and other automakers but are less expensive to make, more durable, and able to hold many charges without degrading. Nor do they use nickel or cobalt, another battery material, which is often mined in environmentally harmful ways, sometimes with child labor.

Without the most advanced or least expensive batteries, American automakers could fall behind Chinese competitors like BYD that are pushing into Europe and other markets outside of China. Americans may also have to pay more for electric cars and trucks, which could slow sales of cars that don’t emit greenhouse gases.

The battery, unveiled by CATL last year, delivers hundreds of miles of driving range after just 10 minutes of charging.

“The hard truth is that the Chinese took a huge gamble on electric cars and took more than a trillion Chinese dollars and subsidies for the industry, and it just so happened that that gamble simply came out,” said Scott Kennedy, a China expert at the Center for Strategic and International Studies.

“If you decide not to partner with a very large battery manufacturer, you’re basically committing to delaying the energy transition in the United States,” he added.

Ford plans to use batteries made with CATL technology in lower-priced versions of vehicles such as the Mustang Mach-E and F-150 Lightning Pickup. The least expensive version of Tesla’s Model 3 sedan comes with an LFP battery that is widely reported to have been supplied by CATL.

For decades, Western companies have monopolized the world’s most advanced technology, seeking access to the Chinese market while also protecting their intellectual property.

But China’s dominance in electric vehicle batteries, as well as in the production of solar panels and wind turbines, has reversed this dynamic. It has created a particularly difficult dilemma for the Biden administration and other Democrats, who want to reduce the country’s dependence on China but also argue that the United States must quickly transition to cleaner energy sources to try to mitigate climate change.

The exposure of the solar and electric vehicle battery industry to Xinjiang further complicates the situation. The Biden administration has condemned the Chinese government for its implementation Genocide and crimes against humanity in the area.

The United States last year banned imports of products made wholly or partly in Xinjiang, saying companies operating in the region were unable to guarantee their facilities were free of forced labor.

In 2022, CATL & Partner Registered lithium processing company In the area is called Xinjiang Zhicun Lithium Industry Company, which has promoted plans to become the world’s largest producer of lithium carbonate, a key battery component.

Through a series of subsidiaries and shareholder relationships, Xinjiang Lithium has financial ties to a Chinese electric company, Tibian Electric Abatsum Corporation, or TBEA, according to records reviewed by The New York Times through Sayari Graph, a mapping tool for corporate ownership. TBEA Share widely In the so-called poverty alleviation and labor transfer programs in Xinjiang An considered the United States A form of forced labor.

While the Chinese government argues that labor relocation and poverty alleviation programs are aimed at improving living standards in the region, human rights experts say they are also directed at pacifying and indoctrinating the population, and that the Uyghurs and other minorities there cannot say no to these programs without fear of detention or punishment.

CATL did not respond to a request for comment. In December, it told The Times that it was a minority shareholder in Xinjiang and had strictly banned any form of forced labor in its supply chain.

Republican lawmakers have also raised concerns about whether batteries made at Ford’s Michigan plant qualify for tax credits that the Biden administration was offering to consumers who bought electric cars as part of the Inflation Control Act.

The law prohibits “relevant foreign entities” — such as companies in China, Russia, Iran or North Korea — from taking advantage of government tax breaks. But since Ford is licensing CATL technology to the factory — rather than forming a joint venture, as has often been the case with automakers and battery suppliers — batteries made in Michigan may still qualify for those incentives.

The Biden administration has not yet clarified exactly how the restrictions will apply to foreign entities. But Ford officials said they had a conversation with management about the Michigan plant, and were confident the partnership would qualify for all the benefits of the law.

“We believe that batteries made by American workers at a US plant operated by a wholly owned subsidiary of a US company will and should qualify,” said Reed, a Ford spokesman.