Battery maker Gotion in sights as US Congress members try to block 45X tax credit

Two members of the US Congress have introduced bipartisan legislation to block the “45X” manufacturing tax credit offered to producers of US-made solar components.

Congressmen John Moolenaar, a Republican member for the state of Michigan, and Jared Golden, a Democrat representing Maine say they want to block the 45X credit introduced under the Inflation Reduction Act (IRA) because Chinese-owned companies who set up on US soil are benefiting from it. The Republican has previously taken aim at Chinese-controlled, California-based battery maker Gotion as a prime example.

“America must be a nation of producers, not just consumers,” said Golden. “That’s the goal of domestic manufacturing credits: to support America’s production economy. But the [Joe] Biden administration has consistently included loopholes in rulemaking that allow foreign-owned companies — including those with ties to adversarial foreign governments — to benefit from preferential tax treatment intended for American firms. The administration needs to go back to the drawing board and ensure they are not subsidizing our global competitors.”

Moolenaar previously introduced the No Gotion (No Official Giveaways of Taxpayers’ Income to Oppressive Nations) Act, which aimed to prevent companies China, Russia, Iran, or North Korea, and the subsidiaries of such companies, from qualifying for tax credits, including 45X. The difference between the No Gotion bill and the latest proposal is that No Gotion restricted tax credits extended to companies from the above-mentioned countries. The latest bill would block the 45X credit altogether.

Gotion, a California-headquartered battery manufacturer, is a subsidiary of Gotion High Tech, which is headquartered in Hefei, China, and is about 25% owned by Volkswagen. Gotion plans to build a $2.4 billion electric vehicle battery plant near Big Rapids, Michigan.

The United States has experienced incredible growth in domestic manufacturing and clean energy production since passage of the IRA. Michael Carr, executive director of the Solar Energy Manufacturers of America (SEMA) Coalition told pv magazine USA passage of the new bill would create uncertainty for solar manufacturers and their employees.

“American solar manufacturers have invested billions of dollars to reduce our reliance on China, lower energy costs, and create thousands of manufacturing jobs across the solar supply chain,” said Carr. “We appreciate the aim of Rep. [Republican] Moolenaar and [Democrat] Golden’s resolution but the Congressional Review Act’s blunt force effect would create significant uncertainty for American solar manufacturers and the workers they employ. The 45X incentives are critical in furthering America’s energy, economic, and national security goals, and we look forward to working with Congress and the next administration to ensure the provision is implemented in a manner that supports US taxpayer interests and continues our incredible progress bringing solar manufacturing back to the United States.”

If Moolenaar and Golden’s legislation is passed by the House of Representatives, the Senate, and signed by the President within 60 legislative days of the section 45X rule being released by the executive branch, the rule would be ended.

The text of Moolenaar and Golden’s resolution can be found here.

From pv magazine USA.