A Department of Energy spokesman said the grant to A123 was used for the construction of manufacturing facilities at two Michigan sites, not technology or research.
"Consistent with the intent of that investment, the purchase of these assets includes the Energy Department's requirement that the plants and equipment partially paid for by the Recovery Act stay in Michigan and continue to operate," said DOE spokesman Bill Gibbons.
The sale to Wanxiang does not include A123's defense-related business assets, which are being sold separately for $2.25 million to Navitas Systems of Woodridge, Ill.
Rep. Marsha Blackburn, a Tennessee Republican who is vice chair of the House Energy and Commerce Committee, has questioned whether Navitas can manufacture A123's military-grade batteries without assistance from Wanxiang. In a letter last week to Defense Secretary Leon Panetta and Secretary of State Hillary Clinton, Blackburn also asked whether the deal specifically prohibits the transfer to Wanxiang of technical data related to A123's military products.
Blackburn said Tuesday that the administration's approval of the sale contradicts a commitment made by Obama during his inaugural speech to keep control of cutting-edge energy technologies developed in the U.S.
"Actions speak louder than words and this is a clear cut example of a time when President Obama needs to step in and protect our national security interests," Blackburn said. "We cannot afford to have technology that is used in our drones and Navy SEAL delivery systems end up in the hands of the Chinese government."
Associated Press Writer Richard Lardner in Washington, D.C., contributed to this report.