REPORT: Ford Motor Co. Contemplating Deal To Help China Reap US Tax Benefits

(Photo by Frederic J. BROWN / AFP) (Photo by FREDERIC J. BROWN/AFP via Getty Images)

Mary Rooke Commentary and Analysis Writer
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Ford Motor Co. is weighing a deal with a Chinese battery manufacturer that would allow China to take advantage of massive U.S. tax breaks, according to a Bloomberg report.

The potential ownership structure between Ford and China’s Contemporary Amperex Technology Co. Ltd. (CATL) would allow CATL to take advantage of tax benefits under President Joe Biden’s new Inflation Reduction Act (IRA), according to Bloomberg.

The companies intend to build a multi-billion-dollar battery manufacturing plant in either Michigan or Virginia to provide lithium iron phosphate batteries for Ford’s line of electric vehicles. The plan gives Ford ownership of the plant, including all buildings and structures, but relinquishes control of factory operations and the technology used to build the car batteries to CATL, the outlet reported.

This ownership arrangement permits the Ford plant, although operated by a Chinese company, to receive production tax credits through the IRA, according to Bloomberg. The legislation expands the tax credits for manufacturers under Section 48C to credit companies 30% of the amount invested in new or upgraded factories that produce renewable energy components such as batteries for electric vehicles.

Ford announced in July that CATL was part of its secured battery supply that would provide 60 gigawatt hours of annual battery capacity after the Chinese car company said it was considering investing as much as $5 billion in building manufacturing plants in either the U.S. or Mexico, the outlet reported. (RELATED: New Federal Regulation Could Devastate Coastal Communities)

Republican Governors in several states have begun taking steps to protect critical state resources, like land and data, from falling into China’s control. Republican South Dakota Gov. Kristi Noem introduced legislation on Tuesday that would “prevent nations who hate us – like Communist China – from buying up our state’s agriculture land,” according to a statement.

“We cannot allow the Chinese Communist Party to continue to buy up our nation’s food supply, so South Dakota will lead the charge on this vital national security issue,” Noem said.

Republican Gov. Glenn Youngkin’s office did not respond to Daily Caller questions about if the Virginia Governor supports the potential plan.