Last summer, the Biden administration announced an $850 million conditional loan to a company called KORE Power to build a battery production plant in Arizona. The purpose was to decrease the United States’ reliance on China’s batteries, but KORE Power has enlisted its co-owner, a Chinese battery maker, to help build the taxpayer-funded facility, according to court filings.
The Biden administration touted the project as a way to “strengthen the domestic battery supply chain” and combat China’s grip on the global market. KORE, with its Idaho headquarters and small staff of around 150 employees, seemed to have the perfect all-American background for the job.
But that backstory conflicts with court documents and corporate disclosure filings, obtained by the Washington Free Beacon, which outline the company’s extensive roots in China.
The records reveal that KORE is 14 percent co-owned by Do-Fluoride New Materials (DFD), a Chinese battery manufacturer led by Chinese Communist Party official Li Shijiang. One of KORE’s directors is Li Shijiang’s daughter, Li Lingyun, who also serves as vice chair of DFD and as vice president of China’s state-supervised Patent Protection Association.
The KORE loan is the latest example of how the Biden administration’s green energy funding is benefiting China due to the country’s dominance in the global market. Last year, the Department of Energy was forced to cancel a $200 million grant to the battery maker Microvast, after the Free Beacon reported that the company operated primarily from China.
In a court filing in November, KORE disclosed that DFD New Energy, a China-based subsidiary of Do-Fluoride New Materials, will help it build the Arizona battery plant.
“The facility is under construction at present and DFD New Energy will assist in the buildout,” said KORE’s CEO Lindsay Gorrill.
The Department of Energy confirmed to the Free Beacon that DFD will help KORE build the Arizona facility by providing intellectual property, research and development, and engineering capabilities. The department said it conducted “extensive due diligence” of the arrangement, adding that KORE has been working to reduce its Chinese ownership, with the goal of eventually becoming completely independent of Chinese technology.
“The partnership with DFD provides KORE with access to proven IP and an experienced team—experience that does not currently exist at [that] scale [in] the United States, but through this partnership will be transferred to American workers and to an American company,” said the Department of Energy.
Some links between KORE and DFD have previously been reported. In June, the Department of Energy’s loan director, Jigar Shah, said the Idaho company would rely on “technology from a Chinese company, DFD, to manufacture battery cells in Arizona.” Shah’s comments were reported by the Daily Caller, which also noted DFD’s connections to the Chinese Communist Party.
In October, the inspector general for the Department of Energy told Congress that KORE’s use of technology from DFD “clearly does not support the legislation’s goals of U.S. technology development since this project deploys Chinese intellectual property.”
But the extent of the relationship between the two companies—including DFD’s ownership stake in KORE and its involvement in building the Arizona plant—has not previously been reported.
The news is likely to add to concerns from lawmakers and watchdogs that the loan could benefit China.
“For a program that was supposed to decrease America’s reliance on China, this is incredibly counterproductive. It’s outrageous that a company partly owned by a Chinese company with ties to the CCP would be rewarded with taxpayer money,” said Caitlin Sutherland, executive director of the watchdog group Americans for Public Trust, in a statement to the Free Beacon.
KORE and DFD did not respond to requests for comment.
KORE’s relationship with the Chinese battery maker is at the center of a legal dispute in Idaho. Over a decade ago, Chenco Engineering, a German company, reportedly won a $10 million judgment against DFD for technology theft in the United Kingdom, which the Chinese company has allegedly failed to pay. In September, Chenco Engineering asked an Idaho court to garnish any payments between KORE and DFD in order to collect the money.
A lawyer for Chenco Engineering declined to comment, saying she was “not at liberty to discuss this currently pending litigation.”
In court filings, KORE said its business is completely dependent upon batteries that it purchases from DFD New Energy. Chinese financial records show that KORE has paid DFD at least $70 million over the past four years.
“KORE relies 100 percent on DFD New Energy battery and module production as product for its worldwide business,” said KORE in a court filing. “Any material interference to this business relationship would be devastating to KORE’s growing business.”
DFD has a 14 percent ownership stake in KORE, according to a copy of the Chinese battery-maker’s 2022 financial disclosure report reviewed by the Free Beacon. DFD also lists KORE as one of its legally “related” business entities in its corporate disclosure reports.
KORE was first incorporated in Nevada in 2018 under the name “Li Batteries Inc.” In a court filing, the company’s CEO denied that the original name was a reference to the Li family and said it came from the abbreviation for “lithium.”
But KORE’s close links to the Li family, who are well-connected in elite Chinese political circles, could draw scrutiny on Capitol Hill.
Michael Sobolik, a China expert at the American Foreign Policy Council, said the loan “suggests a serious lack of oversight by the Biden administration.”
“The administration appears to be providing U.S. taxpayer funding to a company with links to two Chinese entities: an international competitor and a quasi-government organization that has represented PRC business interests at the expense of American interests,” he said.
Li Shijiang, the owner of DFD, has served as a deputy to the National People’s Congress and received government awards for his military and business service. A veteran of the People’s Liberation Army, Li said he seeks to recruit many of his employees from the military ranks.
His daughter, Li Lingyun, is a director at KORE and vice chair of DFD. She also serves as vice president of China’s Patent Protection Association, a nonprofit industry group that helps implement national intellectual property strategy and is overseen by China’s State Intellectual Property Office.
According to the association’s bylaws, its purpose is to take “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as the guiding ideology” on intellectual property issues.
Sobolik said China’s Patent Protection Association “has repeatedly sought to weaken the U.S. government’s protection of U.S. intellectual property. It advocated against 301 tariffs in 2018 and argued in favor of watered-down IP policies in 2022.”
KORE ramped up its lobbying of the Department of Energy during the loan application process. The company hired Washington, D.C., lobbyist Taite McDonald, a longtime friend of the head of the DOE’s loan office, Shah. The company also sponsored an October conference co-hosted by the DOE loan office and a trade group called the Cleantech Leaders Roundtable, an organization that was founded by Shah before he joined the Biden administration.
