MVST - Kentucky halts incentives for Microvast after U.S. loan nixed on alleged China ties

2023-06-05 15:43:56 ET

Kentucky officials said Monday they will not start paying out $21M in economic incentives for a proposed electric vehicle battery facility until Microvast ( NASDAQ: MVST ) explains why the U.S. Department of Energy suddenly rejected a $200M loan for the project.

"As these agreements are performance-based in nature, no state funding has been issued to date in connection with this project," the Kentucky Cabinet for Economic Development told the Associated Press. "Additionally, no further action will be taken related to tax incentives until the company provides further information about the DoE's decision to rescind funding to the satisfaction of our Cabinet."

According to the Associated Press, Microvast ( MVST ) founder and CEO Yang Mu said the company was surprised by the DoE's decision against awarding the loan, which would back plans for a facility focused on a new technology for batteries called polyaramid separator.

After the DoE decision, Microvast ( MVST ) noted it is based in Texas, its global operations are centralized in the U.S., and "neither the Chinese government nor the Chinese Communist Party has any ownership in the company, nor do they control or influence company operations in any way."

Microvast ( MVST ) said its focus now is on finishing its Tennessee plant, saying it is roughly half finished its $300M-plus investment in the facility; it is not clear if the company will still try to build out the project in Kentucky.

More on Microvast:

• Financial and valuation comparison to sector peers
• Analysis: Microvast Has Got A China Problem
• Stock price return: Down 6% YTD, down 72.5% in the past 12 months

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