GOP Congressman Questions Elon Musk About Tesla's Battery Supplier CATL Amid Subsidy Misuse Worries

A Republican Congressman on Tuesday raised queries about the connection between electric car maker Tesla Inc TSLA and its Chinese battery supplier Contemporary Amperex Technology Ltd. The concerns revolve around the potential risk of U.S. electric vehicle subsidies being funneled to overseas entities.

What Happened: Rep. Jason Smith (R-Mo.), chair of the House Ways and Means Committee, has sought confirmation from Tesla CEO Elon Musk about the company’s present and future contracts with CATL, Reuters reported.

Smith’s worries stem from the fact that CATL, already Tesla’s biggest client, may be eyeing agreements similar to its existing one with Ford. Republican lawmakers have been investigating Ford’s proposed $3.5 billion investment to establish a battery plant in Michigan using CATL technology, the report said.

The Congressman also raised questions about Tesla’s efforts to increase the production of vehicles eligible for the clean vehicle credit. As per Reuters, Nissan Motor Co. also received a similar letter on Tuesday enquiring whether its U.S. manufacturing plans include the production of battery components.

Why It Matters: The Inflation Reduction Act enacted by Congress in 2022, stipulates that future electric vehicle tax credits will be withheld if any battery components are manufactured or assembled by a “foreign entity of concern.” However, the definition of this term remains vague and is yet to be clarified by the authorities.

Photo courtesy: Thomas Hawk on Flickr

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