Microvast Holdings Inc shares plunged after Reuters reported that the US Department of Energy (DOE) told the lithium battery company that it will not award it a $200 million grant.
The news agency cited a source familiar with the matter saying that the DOE spiked the $200M grant after US lawmakers raised concerns over the Stafford, Texas-based battery technology company’s alleged links to China's government.
According to Reuters, the DOE was in discussions with Microvast to award the grant for building a battery technology plant in Tennessee. The grant stemmed from the US government’s $1 trillion 2021 bipartisan infrastructure law.
Investors reacted to the news, sending Microvast shares tumbling over 18.6% to $1.79 in the pre-market trading session.
Two Republican lawmakers had written a letter to Energy Secretary Jennifer Granholm last year stating that Microvast was linked to the Chinese Communist Party (CCP) that raised “serious concerns about the department’s ability to protect US taxpayer dollars.”
The grant had been expected to support work by General Motors and Microvast on developing specialized EV battery separator technology and building a new separator plant in the US, work that had been expected to create hundreds of new jobs.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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