The White House's new regulations on Chinese engagement in such projects will not impact CATL's agreement with Ford Motor on an electric vehicle battery plant in the United States.
The founder of the massive Chinese battery company, Zeng Yuqun, informed reporters that additional implementation would not be impacted because the plant's structure was created in accordance with the definition of a foreign entity of concern (FEOC).
Ford declared in February that, at its Michigan plant, it would begin manufacturing affordable lithium-ion batteries by 2026. The technology for these batteries is a license from CATL, the largest manufacturer of EV batteries worldwide.
Congressmen in the United States have expressed disapproval of the move due to worries that funds provided by the Bipartisan Infrastructure Law and the U.S. Inflation Reduction Act would go to a Chinese organization.
The Biden administration last week proposed new rules pertaining to the notion of a foreign entity of concern (FEOC). The rules are intended to address what Washington perceives as America's excessive dependence on EV batteries produced in China, which is a leader in the industry and controls a substantial portion of the supply chain; six of the ten biggest EV battery manufacturers worldwide are Chinese.
If a company from one of the four designated countries—China, Iran, North Korea, or Russia—holds a stake of 25% or more in a joint venture, countries—into a licensing agreement with another entity that entitles the latter to exercise "effective control" over the production of the battery components, the joint venture would be classified as a foreign equity owned company (FEOC) with effect from January 1. A FEOC would not be qualified for grants or tax credits.
