"Exploiting IRA Loopholes, US Taxes Flow to Chinese Companies"

The U.S. House of Representatives has raised concerns that the Inflation Reduction Act (IRA), promoted by the Joe Biden administration, has inadvertently allowed American taxpayers' money to flow to Chinese companies due to institutional loopholes. This criticism was directed at Ford, a U.S. automaker, for partnering with Ningde Shidai (CATL), the world's leading battery manufacturer from China, to establish an electric vehicle battery plant in the United States.

On the 18th (local time), Jason Smith, a Republican member of the House Ways and Means Committee, released a letter addressed to Ford, criticizing, "Thanks to the EV subsidies under the IRA, American taxpayers' money is flowing to Chinese companies collaborating with Ford and potentially concerning foreign entities."

In the letter, Smith noted, "Jennifer Granholm, Secretary of the Department of Energy, stated that the top priority is to prevent American taxpayers' money from flowing to China," but added, "Recent reports suggest that automakers are still relying on foreign technology and labor, exploiting IRA loopholes to receive subsidies."

Smith further criticized, "According to reports, CATL employees are assigned to the joint plant, and some materials for the plant's establishment are imported from China," expressing concern that importing or assembling EV battery components from foreign entities of concern creates loopholes in the IRA provisions.

He continued, "I am alarmed that Ford is pursuing such projects related to IRA subsidies," and expressed worry that other manufacturers might similarly circumvent IRA provisions designed to protect American companies and workers. Smith also stated that he requested Ford to submit its investment plans related to EV subsidies.

Additionally, Smith mentioned that he sent separate letters to 10 companies, including Hyundai Motor, Audi, Tesla, Volvo, and Nissan, which have received EV subsidies in recent months, inquiring whether they have joint venture plans with concerning foreign entities similar to Ford.

Meanwhile, under the IRA passed last year, the U.S. government decided to provide up to $7,500 in subsidies only for electric vehicles produced in North America.

On the 30th of last month, detailed IRA guidelines strengthened requirements by stipulating that even for EVs finally assembled in North America, $3,750 would be granted if battery components manufactured or assembled in North America meet a certain threshold (50% this year, increasing annually), and another $3,750 would be granted if critical minerals mined or processed in the U.S. or FTA countries meet a certain threshold (40% this year, increasing annually).

Ford announced earlier this year that it would partner with CATL to build a joint EV battery plant in Michigan to meet these conditions and qualify for EV subsidies. Current U.S. law does not have separate regulations regarding U.S. companies establishing joint ventures within the U.S. with companies from competing countries such as China.

According to Bloomberg, Tesla is also reportedly pursuing a plan to build a battery plant in Texas in partnership with CATL.

This content was produced with the assistance of AI translation services.