Barrasso Presses DOE on Major Market Impact of Misleading Award Announcements

June 5, 2023

WASHINGTON, D.C. — U.S. Senator John Barrasso (R-WY), ranking member of the Senate Committee on Energy and Natural Resources, sent a letter to Department of Energy (DOE) Secretary Jennifer Granholm regarding the company Microvast and the award process for DOE grants.

In the letter, Barrasso points out the undue influence of both the DOE and White House award announcements on investors in Microvast. He also inquires about remedial actions and impact on other award selectees.

Read the full letter here and below.

Dear Secretary Granholm,

I again write to you regarding the Department of Energy’s (Department) selection of Microvast, Inc. to receive $200 million in taxpayer dollars. Though the Department’s award negotiations with Microvast have ended, the oversight duties of Congress as it relates to this matter are not yet complete.

You remain delinquent in providing answers to questions on this topic that I submitted to you in my attached May 1, 2023 letter. In addition to these questions, I am submitting new questions related to the Department’s decision to cancel award negotiations with Microvast, as well as questions related to the Department’s misleading of investors throughout the award process.

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. 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.

Following the Department’s October 19, 2022 announcement that Microvast was one of the companies that “will receive (emphasis added) a combined $2.8 billion,” Microvast’s stock price experienced a one-day surge of more than 40%. On the heels of the Department’s official announcement, mainstream press outlets echoed the Department’s erroneous claim, saying “Out of the 200 companies [applying] for $2.8 billion in DOE grant funding, 20 companies were awarded grants.”

Additionally, the White House published an October 19, 2022 press release of its own. The release stated, “President Biden is announcing that the Department of Energy is awarding (emphasis added) $2.8 billion in grants from the Bipartisan Infrastructure Law to 20 manufacturing and processing companies for projects across 12 states.”

On a Reddit webpage dedicated to Microvast, investors reacted to the White House press release with glee. One post stated, “I had to check how many shares I even own at this point bc I wrote this stock off as a total loss a long time ago. It’s good to see we are finally up!” Another stated, “Bought 300 more shares today!” Another post highlighted the flood of trading volume spurred by the erroneous White House announcement, stating, “17,000,000+ shares of volume in past 30 minutes. Mvst to the moon!” It is irrefutable the White House and Department of Energy’s deceptive press releases were a major catalyst in misleading investors.

After the May 23, 2023 news that the Department had terminated award negotiations with Microvast, Microvast’s share price plummeted more than 36% in a single day. It is clear that in the minds of investors the Department’s loan to Microvast had been perceived as a guarantee. Without the promise of $200 million in taxpayer funding, investors fled.

It is inappropriate if not unethical that the federal government has played such an outsized role in a single company’s stock price. The case of Microvast exemplifies the fact that the Department, fueled by Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA) 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. If you requi­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­re any assistance in responding to this letter or my May 1, 2023 letter, please contact the Senate Committee on Energy and Natural Resources at 202-224-4971. I ask that you provide a written response no later than June 23, 2023.

Background Information:

On May 18, 2023, ranking member Barrasso introduced the Supporting American Independence in Innovation Act, which would bar the Department of Energy from making financial awards to firms beholden to China.

On May 2, 2023, ranking member Barrasso wrote to Secretary Granholm to request that she reject grant applications by China-connected companies and call for a pre-selection security review process for awardees.

On April 20, 2023, ranking member Barrasso questioned Secretary Granholm regarding the DOE security review process for grant applicants.

On February 21, 2023, ranking member Barrasso wrote to officials at the Department of Energy to clarify the security review process for grant applicants.

On December 7, 2022, ranking member Barrasso wrote to Secretary Granholm regarding the potential award of taxpayer funds to Microvast, a company with close ties to Communist China.