A battery manufacturer which less than two months ago revealed plans to locate a separator facility in Kentucky is expressing surprised but deterred about its ambitions after the U.S. Department of Energy suddenly withdrew a previously announced $200 million grant.
Microvast Holdings founder and CEO Yang Wu said the Texas-based company was “surprised” by the DOE’s decision to withdraw the separator grant. The federal statement cited Microvast’s alleged ties to China as a key reason for the change.
Yang Wu noted that the company is based in the southern U.S., its shares are traded on the Nasdaq exchange and operations are centralized domestically. The company also has operations in Singapore, China and Europe, according to an investor report.
Despite the sudden DOE snub, Microvast will continue to invest “significantly in its U.S. expansion,” he added.
“Neither the Chinese government nor the Chinese Communist Party has any ownership in the company, nor do they control or influence company operations in any way,” Yang Wu said. “The withdrawal of the DOE grant will have no impact on our expansion plans already underway for cell manufacturing."
Energy Department Press Secretary Charisma Troiana acknowledged the breakup of the grant agreement but did not give details about why the feds did so.
“The department can confirm that it has elected to cancel negotiations and not to award Microvast funds from this competitive funding opportunity,” she said in a statement.
Overall, the DOE has a program allocating almost $3 billion in grant funding for battery manufacturing and recycling. Much of that funding comes via the Bipartisan Infrastructure Act, while even more incentives are potentially available through the later Inflation Reduction Act.
Microvast is currently working to complete a battery manufacturing facility in Clarksville, Tennessee, company leaders said. So far the project has spent about half of the planned $300 million investment on that project, according to the release.
Revenues are anticipated to top $100 million this year, Microvast Chief Financial Officer Craig Webster, according to the statement. “The decision (by DOE) has no impact on our liquidity position and, in fact, it gives us more flexibility on how we plan to undertake our expansion initiatives in the U.S.
Earlier this decade, Microvast established a research and development facility in Florida, planning on collaboration with the University of Central Florida and other research institutions, according to reports. The company also earlier announced a partnership with General Motors on energy storage components.
In April, Microvast reported it would build and open its first polyaramid separator facility in Hopkinsville, Kentucky, with an investment of $500 million.
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According to the company, the plant is intended to be the world’s first mass production facility for its polyaramid separator technology, which offers significant advantages compared to other polyethylene and polypropylene separator technology available today.
Polyaramid is a high-temperature resistant, fire-retardant aromatic polyamide, which is commonly used in firefighting garments and insulating papers. Microvast says its patented polyaramid separator is capable of resisting temperatures in excess of 300°C, and touted it as ideal for use in lithium-ion batteries for electric vehicles.