Tucked inside the $1 trillion U.S. Senate infrastructure bill on page 1663 is a succinct requirement for a study of the “impact of forced labor in China on the electric vehicle supply chain.”
Secretaries of Energy, State and Commerce are directed to conduct the study no later than 120 days after the massive infrastructure act is enacted—if it ever is. It still needs full Senate approval before going to a divided House, which won't reconvene after the summer break until Sept. 20.* If approved, President Biden has said he will sign it.
The call for the study comes after the Senate in early July passed the bipartisan Uyghur Forced Labor Prevention Act (S. 65) to ensure that goods tainted with the forced labor of Uyghurs and others do not enter the U.S. market. U.S. Senators Marco Rubio, D-Florida, and Jeff Merkley, D-Oregon, were sponsors.
Also now before the House, that bill sends a “clear message that the U.S. will not be complicit in the Chinese government’s genocide of Uyghur Muslims,” Merkley said.
President Biden has also repeatedly attacked China for human rights violations, including treatment of Uyghurs and protestors in Hong Kong, drawing strong rebukes and denials from Chinese officials who turn the tables and point to domestic rights abuses in the U.S.
But the Biden administration is also a big supporter of electric vehicles and wants hundreds of thousands of EV charging stations built. The infrastructure plan approved by the Senate includes $7.5 billion for EV charging infrastructure and stations (half of what the administration wanted) and a complicated series of rules for where and how they could be built.
There is clearly consternation in Washington. If China feels U.S. condemnation of its treatment of human rights is too great, then exports to the U.S. of materials and components made in China that are used to make EVs, including batteries and even actual vehicles, could be reduced or cut off. In addition to Biden’s repeated support for domestic chip production is his administration’s support for a secure supply chain for batteries and materials that can be used in EVs.
“EV industrial leadership is on the line,” said Leonard Lee, an expert on technology trade with China and the rest of Asia who serves as managing director for NeXt Curve. “It is a tough policy and political dilemma.”
Currently, China has the “most vibrant and promising market for EVs” and is seen by the computing and auto industries as the most progressive market for advanced vehicle and transportation infrastructure technologies, Lee said.
“Humanitarian concerns aside, are U.S. policymakers willing to give emerging Chinese EV manufacturers such as BYD, Xpeng and others a cost advantage as they eye exports of their vehicles to emerging EV markets in the future?” Lee asked.
While Congress and the Biden administration seek to substantiate reports of forced labor in China, Lee said the political question ultimately comes down to how to manage the tradeoff between low-cost components from China and other nations with geopolitical and humanitarian concerns.
U.S. Senator Joe Manchin, a conservative Democrat from West Virginia, served on the negotiating team for the bipartisan infrastructure bill and has frequently spoken out against the strong EV push in the U.S., citing the nation’s strong dependence on foreign supply chains.
“I really do have great concerns about our country going to the EV that’s totally dependent on foreign supply chains,” Manchin said at a committee hearing in June. In an April appearance at the National Press Club, he was even more direct.
“People are being enslaved in part of the world in order to get the resources that we seem to want to be out of sight, out of mind, and we just say, ‘Well, we have an electric vehicle,’” Manchin said.
U.S. Sen. John Warner, D-Va. on the Senate floor said the infrastructure plan makes a record investment in electric and low- or no-carbon buses “so they can be built here, not in China.”
When contacted by Fierce Electronics about the EV study and what questions it would answer, a State Department official said the department as a general rule doesn’t comment on pending legislation. Energy and Commerce officials did not respond.
Concerns over China’s labor practices and resources
A number of published reports on forced labor in China have been produced since 2018, and one of the more recent from the U.S. Bureau of International Labor Affairs ticks off the biggest concerns: one million Uyghurs have been arbitrarily detained in Xinjiang in far western China; 100,000 Uyghurs may be working in conditions of forced labor making a range of goods from gloves to textiles; Uyghurs have been transported to work in other provinces; once at a work placement, workers are usually subjected to constant surveillance and isolation; after work hours, the Uighurs are escorted home by police who say they conduct roll calls to make sure no one is missing.
The Department of Labor has relied on published victim testimonies and relied on think tank and media reports to support its findings. “Given the vast state-sponsored structure in place and the control of information, it is likely that more goods also are produced with forced labor in China,” the BILA said.
China dominates the EV supply chain, according to many studies. BloombergNEF intelligence summarized the tally: China has control of 80% of the worlds’ raw material refining, 77% of the world’s cell capacity and 60% of the world’s component manufacturing. “China’s dominance of the industry is to be expected given its huge investments and the policies the country has implemented over the past decade,” said James Frith, head of energy storage for BNEF in a report from 2020.
*This story was updated to include the infrastructure bill needs final Senate approval and the Sept. 20 date when the House comes back in session.