By David Shepardson

WASHINGTON (Reuters) – U.S. Senator Marco Rubio on Thursday introduced legislation that takes aim at Ford Motor’s deal to use technology from Chinese battery company CATL as part of the automaker’s plan to spend $3.5 billion to build a battery plant in Michigan.

Rubio, the top Republican on the Intelligence Committee, introduced legislation that would block tax credits for electric vehicle batteries produced using Chinese technology, saying it would “significantly restrict the eligibility of IRA tax credits and prevent Chinese companies from benefiting.”

Ford said in response to Rubio that “making those batteries here at home is much better than continuing to rely exclusively on foreign imports, like other auto companies do. A wholly owned Ford subsidiary alone will build, own and operate this plant. No other entity will get U.S. tax dollars for this project.”

Last month, Rubio asked the Biden administration to review Ford’s deal to use technology from CATL.

Rubio called for an immediate Committee on Foreign Investment in the United States (CFIUS) review of the licensing agreement between Ford and CATL.

Rubio said the deal “will only deepen U.S. reliance on the Chinese Communist Party for battery tech, and is likely designed to make the factory eligible for Inflation Reduction Act (IRA) tax credits.”

CFIUS is a U.S. Treasury-led interagency panel that reviews proposed transactions to ensure they do not harm national security.

Treasury declined to comment, but Energy Secretary Jennifer Granholm said last month the Ford deal will “bringing advanced manufacturing capabilities from overseas to the United States is key to our competitiveness, will stimulate our economy, and create good-paying American jobs.”

Ford has said the plant would create 2,500 jobs and begin producing lower cost and faster recharging lithium-iron-phosphate batteries in 2026.

The $430 billion IRA imposes restrictions on battery sourcing and is designed to wean the United States off the Chinese supply chain for electric vehicles (EVs). The IRA will eventually bar credits if any EV battery components were manufactured by a “foreign entity of concern,” in a provision aimed at China.

Separately, Democratic Senator Joe Manchin criticized comments by a White House adviser that Chinese companies will be “big players” in growing domestic energy production.

“It is beyond irresponsible for someone speaking on behalf of the White House to not only condone but also advocate for sending American tax dollars to Chinese companies,” Manchin said.

(Reporting by David Shepardson; Editing by Lincoln Feast and Diane Craft)

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