Sen. John Barrasso, R-Wyo., the top Republican on the Energy and Natural Resources Committee, is pressing the Department of Energy over the impact of its abrupt decision last month to pull a grant for an energy technology firm.
In a letter to Energy Secretary Jennifer Granholm on Monday, Barrasso expressed concern that her agency’s decision to award a $200 million grant to Microvast, an electric vehicle battery component firm, then subsequently withdraw the grant created sharp market fluctuations. According to Barrasso, Microvast’s share price surged more than 40% after the federal grant was announced in October and fell 36% after it was pulled in May.
‘It is inappropriate if not unethical that the federal government has played such an outsized role in a single company’s stock price,’ he wrote. ‘The case of Microvast exemplifies the fact that the Department, fueled by Infrastructure Investment and Jobs Act and Inflation Reduction Act funds, has created massive fluctuations in financial markets caused by government misinformation.’
‘I expect the complete cooperation of the Department as Congress works to gather information related to the Department’s award negotiations with Microvast, as well as award processes for other Department selectees,’ the Wyoming senator added.
On Oct. 19, the Department of Energy (DOE) and White House both issued press releases announcing that the Biden administration was ‘awarding’ a total of $2.8 billion to 20 companies, including Microvast, as part of a program under the 2021 infrastructure package. Granholm said at the time that Microvast and the other grant recipients were examples of companies that would foster increased domestic manufacturing.
However, the DOE withdrew the grant on May 22, explaining that the October announcement was merely the beginning of ‘negotiations’ and was not a guarantee that Microvast would receive the grant. A DOE spokesperson said ‘it is not uncommon for entities selected to participate in award negotiations under a DOE competitive funding opportunity to not ultimately receive an award.’
‘It is irrefutable the White House and Department of Energy’s deceptive press releases were a major catalyst in misleading investors,’ Barrasso wrote to Granholm, noting posts by apparent Microvast investors on an online message board.
While the agency neglected to offer a reason for the surprise move, Republican lawmakers, including Barrasso, had called on it to rescind the grant after Microvast’s ties to China were revealed.
Overall, 69% of Microvast’s revenue was generated in China and just 3% came from the U.S., according to a third quarter financial disclosure it filed with the Securities and Exchange Commission last month. In the same filing, the company acknowledged that the Chinese government ‘exerts substantial influence’ over its business activities and ‘may intervene at any time and with no notice.’
In his letter Monday, Barrasso called on Granholm to clarify why the DOE withdrew the grant considering its impact on investors.
‘In the interest of transparency and accountability, it is imperative American taxpayers understand what criteria the Department uses both when announcing award negotiations and when canceling them,’ he said.
‘This lack of clarity surrounding the Department’s award processes has led to great confusion and uncertainty for those investing in Department award selectees, as is the case for Microvast investors.’
The DOE did not immediately respond to a request for comment.