Hopkinsville battery factory canceled after federal grant pulled due to concern of Chinese ties

A lithium-ion battery maker has canceled plans to build a $504 million production plant in Hopkinsville after a decision by the Biden administration to rescind a $200 million grant.

Microvast Holdings said plans for the factory expected to employ more than 550 people were put on hold in response to the Energy Department announcement in May that the grant was canceled because of concern about the Texas company’s ties to China. 

Kentucky officials also pulled back $21 million in economic incentives.

The company had previously disclosed in a filing with the Securities and Exchange Commission that noted a “substantial portion” of its operations are located in China and that it receives subsidies from the government. Its operations are also “subject to extensive” regulation by the Chinese government, the filing added.

Microvast still has a separate electric-vehicle battery manufacturing plant under construction in Clarksville, Tennessee, which is scheduled to begin production later this year.

The Southwestern Kentucky Economic Development Commission is now seeking another buyer for the factory site vacated by Microvast.