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US lawmakers to urge automakers to cut reliance on China

Jun 27, 2023

WASHINGTON, June 19 (Reuters) - A bipartisan group of U.S. lawmakers will urge the CEOs of Ford Motor (F.N) and General Motors (GM.N) to shrink reliance on China auto parts, particularly electric vehicle batteries, sources told Reuters on Monday.

Four lawmakers who are part of the House of Representatives China Select Committee will travel to Detroit Tuesday to meet with Ford's Jim Farley and GM's Mary Barra, the sources said.

Republicans Mike Gallagher and John Moolenaar and Democrats Raja Krishnamoorthi and Haley Stevens also plan to meet with executives from auto suppliers including BorgWarner (BWA.N), Continental (CONG.DE), Bosch (BOSH.NS), Tenneco and battery startup Our Next Energy (ONE).

The focus on Chinese auto parts comes soon after U.S. Secretary of State Antony Blinken made a rare visit to Beijing and hours of meetings failed to produce any major breakthroughs.

Ford said Monday it "shares the committee’s goals of strengthening American competitiveness and establishing EV supply chains in the U.S., and in our meeting tomorrow we plan to share how we’re doing just that."

GM declined to comment on the meeting.

[1/2]The GM logo is seen on the China Headquarters in Shanghai, China, August 29, 2022. REUTERS/Aly Song

Gallagher, who chairs the China committee, in April raised concerns about Tesla's (TSLA.O) dependency on China, after the company revealed plans to open a Megapack battery factory in Shanghai.

The $430 billion Inflation Reduction Act (IRA) signed by President Joe Biden in August aims to wean U.S. EV production from Chinese supply chains by imposing new conditions on EV tax credits. The new tax credit rules restrict eligibility to only North American assembled vehicles and set battery sourcing rules.

Ford's deal announced in February to use technology from Chinese battery company CATL (300750.SZ) as part of the automaker's plan to spend $3.5 billion to build a battery plant in Michigan has drawn criticism from some lawmakers.

Republican Senator Marco Rubio has asked the Biden administration to block EV tax credits for batteries produced using Chinese technology.

Ford said previously "making those batteries here at home is much better than continuing to rely exclusively on foreign imports, like other auto companies do."

Bloomberg News first reported the planned meetings.

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