US pressures Ford to sever Chinese partnerships amid battery dominance concerns
Transportation Secretary demands Ford cut ties with CATL and Geely over strategic dependencies.
1US demands Ford cut Chinese ties
Transportation Secretary Sean Duffy wrote to Ford CEO Jim Farley on September 8 expressing 'profound concern' about Ford's Chinese partnerships. The letter specifically targets three issues: a CATL battery license in Michigan, delayed Lincoln production relocation from China, and a Geely joint venture in Spain. Duffy argues these create dangerous dependencies on strategic competitors, though no laws were broken. Ford dismissed the intervention as 'wrongheaded attempt to capture headlines'.
2Key Chinese partnerships under scrutiny
Ford's Valencia plant with Geely (66% Ford, 34% Geely) plans to produce four models from 2028. The CATL battery license in Michigan and delayed Lincoln production shift from China complete the trio of controversial ties. These partnerships reflect the auto industry's reliance on Chinese battery technology, where CATL leads with 34% global market share. The US government views these as strategic vulnerabilities in the EV transition race.
3EU's contrasting regulatory approach
While the US pushes for complete separation, the European Parliament is finalizing the Industrial Accelerator Act. This would mandate Chinese investors in strategic sectors to form EU joint ventures (max 49% stake) and transfer technology. Current proposals include 60% EU workforce requirements and 1% revenue reinvestment in European R&D. The threshold for compliance would be €50M investments, half the European Commission's initial proposal.
4Europe's disappointing tech transfer results
Transport & Environment research reveals no meaningful technology transfers in Chinese-EU battery partnerships, despite €900M state aid for Hungarian/Polish plants and €300M for CATL-Stellantis in Spain. This fuels skepticism about current collaboration models. European lawmakers now seek enforceable knowledge-sharing requirements, contrasting with America's more confrontational stance toward Chinese battery dominance.
5Divergent transatlantic strategies
The US prefers complete separation from Chinese tech partners, while Europe attempts to regulate and extract value from these relationships. Both approaches respond to China's battery sector dominance - CATL alone commands 34% global market share. The key difference lies in Europe's belief that technology can flow westward through structured partnerships, whereas Washington sees inherent strategic risks.
6Ford's precarious balancing act
Caught between governments and market realities, Ford maintains its Geely JV will proceed as planned. The Valencia plant represents Ford's global platform strategy, while the CATL license supports Michigan EV production. With Chinese firms leading battery tech and Western automakers needing access, Ford exemplifies the industry's dilemma in decoupling efforts versus technological necessities.
7Broader industry implications
The Ford case signals growing government intervention in automotive supply chains. As batteries become strategic assets, automakers face politicized partnership decisions. The divergent US-EU approaches may force manufacturers to maintain separate technology strategies for each market, increasing costs and complexity in the EV transition.
8The battery geopolitics era
This confrontation marks a new phase where battery supply chains equal national security concerns. With China controlling critical mineral processing and battery production, Western governments are compelled to intervene. The Ford case illustrates how automotive partnerships now carry geopolitical weight, with lasting consequences for industry competitiveness and technological sovereignty.