Ford's complicated relationship with China: From collaboration to controversy

How inseparable is Ford from China? A letter taking stock of the entire Chinese relationship network. (Reuters)

Ford's European production base builds cars for China's Geely

[Financial Channel/Comprehensive Report] How inseparable is Ford from China? This letter from U.S. Transportation Secretary Sean Duffy reveals that the target is not just CATL, but also the multi-level dependence between Ford and China.

In July this year, Ford and China's Geely Automobile announced the establishment of a joint venture in Valencia, Spain. Ford holds 66% of the shares and Geely holds 34%. It is expected to start operations in the first half of 2027 and start production in 2028. According to the plan announced by Ford, five cars will be produced locally in the future, two of which will be directly branded Geely. Ford admitted that one of the purposes of the cooperation is to improve factory utilization and reduce the manufacturing cost of each vehicle by increasing production.

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Experts point out that what Ford sees as "saving factories" has become what Washington sees as "building bridges for China." To put it simply, Ford turned its European manufacturing base into one of Geely's production bases in Europe. This is the most sensitive place in Washington.

According to reports, John Moolenaar, chairman of the U.S. House of Representatives Special Committee on China, criticized Ford for asking the U.S. to protect domestic automakers from Chinese competition, while at the same time cooperating with Geely. He described the decision as "puzzling" and warned that Ford may further contribute to the impact of the Chinese auto industry on the European market.

Moreover, Geely is not the only one.

In January this year, it was revealed that Ford was negotiating with China's BYD to purchase hybrid vehicle batteries, and one of the plans was to supply markets outside the United States. After the news broke, White House trade adviser Peter Navarro immediately asked whether Ford was trying to support the supply chains of Chinese competitors while making itself more vulnerable to the same supply chain.

Even Ford's luxury brand Lincoln has not completely separated from Chinese production and faces a US tariff of up to 52.5%. The report pointed out that the Nautilus is currently Ford's main model imported from China to the United States, but it plans to move some models from China back to the United States starting in 2030.

In this regard, Duffy believes that this means that Ford will "still be dependent on China in the next few years." At the same time, it is also believed that Ford is "deliberately deepening its operational dependence on strategic competitors", which makes it unable to be the reliable partner required by the American public and the Department of Transportation. Therefore, Ford is required to move toward Technological self-reliance, reduce its dependence on Chinese companies and technology, and prioritize the development of American manufacturing.

There are conflicting attitudes within the U.S. government regarding the cooperation between Ford and Chinese companies such as CATL. (Reuters)

Ford has been lobbying to keep Chinese cars out of the U.S. market

Analysts pointed out that the real contradiction that makes Washington dissatisfied is that Ford CEO Jim Farley has been one of the most active business leaders in Detroit to warn against the threat of Chinese automobiles for many years. Ford even lobbied Congress to restrict Chinese automakers from entering the U.S. market. However, overseas, Ford itself has become closer and closer to CATL, Geely and BYD.

However, from Ford's perspective, this is not a simple contradiction, but the logic is actually very complete. The U.S. market keeps Chinese cars out; but in markets outside the U.S., Ford must use China's batteries, costs and technical capabilities to compete with Chinese automakers. To put it simply, "Chinese cars cannot enter the United States, but Ford has to learn from the cost and technology that China has already developed."

The report pointed out that Chinese car companies have reset the battery cost, manufacturing efficiency and software standards of the global automotive industry. In the United States, Ford hopes that the U.S. government will build a high wall; in Europe and other global markets, it must leverage Chinese technology to have a chance to compete with Chinese car companies.

Experts point out that the cooperation between Ford and Geely has been criticized by the U.S. Congress as paving the way for the Chinese auto industry to "enter Europe." However, Ford believes that this joint venture is "building in Europe, for Europe" (manufacturing in Europe, serving Europe). This is almost the same logic as Trump said in mid-September, "If Chinese companies are willing to build factories in the United States and hire American workers, he has no objection."

While Republican congressmen continued to attack Ford, the White House posted a message of support on the social platform X, praising Ford as a great American company and praising it for increasing domestic investment in the United States and moving production back to the United States. "Reuters" described this as a "vote of confidence" cast by the White House in Ford.

What's more subtle is that when Ford announced in August that it would move some Lincoln production from China back to the United States starting in 2030, U.S. Commerce Secretary Howard Lutnick and Farley were interviewed together and said that "American manufacturing has advantages." However, a month later, Duffy criticized Ford for the same thing, believing that waiting until 2030 was too slow. This also highlights that there are obviously different policy signals within the Trump administration regarding Ford's cooperation with China.

In this regard, CSIS researcher Ilaria Mazzocco told Reuters very directly: There is a general consensus that the United States wants to reduce its dependence on China, but "there is actually not much consensus on what this means." Ford's deepening cooperation with China has just brought this twilight zone into the light.

Therefore, the question is no longer just whether Ford is "dependent on China", but more embarrassing: If an American car manufacturer wants to defeat Chinese competitors, does it have to learn to use Chinese technology first?

The factory is American, but the technology comes from China. Ford is stepping into the gray area of ​​Sinochem. (Reuters)

Made in the United States, the battery is authorized by CATL

Analysts pointed out that the core of this dispute is not actually how many batteries Ford imports from China, but a more thorny issue: If the product is manufactured in the United States, but the key process technology comes from China, is it truly "de-China"?

Ford's BlueOval Battery Park Michigan in Marshall, Michigan, is stuck in this gray area. This factory is wholly owned and operated by Ford. The factory is owned by Ford, the employees are hired by Ford, and the batteries are also produced in the United States, but the core manufacturing technology of LFP batteries (lithium iron phosphate batteries) is licensed by CATL.

Ford has always emphasized that this is not a joint venture with CATL, but an introduction of China's mature LFP technology into the United States for American companies to produce on their own. But what Duffy sees is another thing - even if the factory moves back to the United States, American automakers still cannot do without Chinese know-how. The U.S. Department of Transportation also asked Ford to propose a clear path toward "technological independence."

It is worth noting that this seems to be just a difference in cooperation structure, but behind it is actually a technological catch-up war. LFP does not use expensive materials such as nickel and cobalt, and has lower cost and longer cycle life, but its energy density is relatively low. Over the past few years, Chinese companies have advanced LFP from a relatively low-cost battery chemistry system to a mature technology that can be applied on a large scale in electric vehicles.

So Ford faces the reality that it doesn't have much time to catch up. If we give up the mature technology of the CATL era, we will have to spend more time and capital; but if we continue to use it, it may be considered by Washington as not really getting rid of dependence on Chinese technology.

While fearing China, it is studying Xiaomi; the market believes that Ford's real anxiety is that it "doesn't have much time to catch up slowly." (AFP)

Ford CEO has been driving Chinese electric cars for a long time to study

If you look at it from a political perspective, Ford's strategy is very contradictory; but if you look at it from a financial report, it is not difficult to understand. At the end of 2025, Ford recognized approximately US$19.5 billion in impairment and restructuring expenses on electric vehicle-related investments, including the cancellation of some electric vehicle plans and the dismantling of some battery joint venture arrangements with SK On (an electric vehicle and energy storage battery manufacturing company under South Korea's SK Group).

According to "Reuters" statistics, Ford's electric vehicle business has suffered a cumulative loss of approximately US$13 billion since 2023. By the second quarter of 2026, its EV division was still losing US$919 million, and US EV sales fell 57.4% year-on-year. In August, the situation was even uglier. Ford sold only 2,197 pure electric vehicles in the US, a year-on-year decrease of 79.4%.

In other words, Ford is not doing a simple patriotic multiple-choice question between "Chinese technology" and "American technology", but is racing against time. Analysts pointed out that Ford must reduce battery costs, reduce the number of parts, shorten production time, and lower the price of complete vehicles as soon as possible. Otherwise, even if Washington blocks Chinese cars from entering the country, its EV products may not be able to make money.

"Reuters" pointed out that Ford CEO Farley once warned that China's existing automobile production capacity is even enough to supply the entire North American market. But although Farley has always described Chinese automakers as the most dangerous competitors, in fact he continues to study them. In 2024, he shipped a Xiaomi electric car SU7 from Shanghai to the United States and drove it continuously for about half a year. He also publicly stated that he "didn't want to give it back."

Industry insiders bluntly said that the CEO of an American automaker who is most wary of Chinese cars has been driving Chinese electric cars for a long time to study. This picture actually explains Ford's current situation better than any political slogan.

Is national security just superficial? Ford and GM have been lobbying for CATL for three years in Washington. (Reuters)

Trapped in the contradiction of "preventing China while also learning from China"

Ford approached CATL, discussed hybrid batteries with BYD, and cooperated with Geely. This does not necessarily mean that it underestimates the threat from China. On the contrary, it may be the opposite. Experts believe that it is precisely because Ford is so aware of China's competitiveness in battery costs, manufacturing efficiency and automotive software that it cannot pursue it slowly behind closed doors. This has also created Ford's current contradictory situation of "both guarding against China and learning from China."

However, behind this controversy in the CATL era, there is actually another Detroit civil war that is not easy to notice. Analysis points out that as early as 2023, Ford and General Motors (GM) have adopted completely different lobbying routes for CATL technology in Washington.

Ford's proposition is straightforward: Since Chinese companies have taken the lead in LFP battery technology, the most efficient way for the United States is to introduce mature technologies into the United States, set up factories in the United States, hire American workers, and then gradually build up its own manufacturing capabilities. However, GM raised another set of concerns to Congress: If batteries using Chinese-licensed technology are allowed to enjoy U.S. policy preferences, it may instead expand China's influence on the U.S. automotive supply chain.

By 2025, this competition will come to the fore. Relevant reports quoted four people familiar with the matter as saying that GM is one of the corporate forces pushing Washington to formulate stricter "Foreign entities of concern" rules and impose restrictions on technology licensing models such as Ford-CATL.

Although Ford Executive Chairman Bill Ford did not directly name GM at the time, he publicly complained that peers were trying to sink the Marshall battery plant in Michigan and even described this behavior as a bit like "sour grapes." GM emphasized that its lobbying purpose is to establish a level playing field for the U.S. auto industry.

This is why the Detroit auto circle will be particularly sensitive after Duffy sent a letter to Ford this time, because some of the questions in the letter about the CATL technology licensing model are very close to the arguments that GM has put forward to Washington in the past few years. However, as of now, there is no "reliable evidence" on the market that proves that GM asked Duffy to send a letter, participate in the drafting, or directly prompted the Ministry of Transportation to take action; however, what is really interesting is the reversal later.

A few days ago, "Reuters" quoted sources as saying that GM was reported to be negotiating to purchase electric vehicle batteries produced in the United States using Chinese technology. The products would be assembled in a new factory in the United States. The idea at the time was that the proposed factory would be funded and operated by Japanese consumer electronics company TDK Corporation, using CATL technology to produce low-cost batteries and then supply them to GM.

"Reuters" even pointed out at the time that this structure was quite similar to Ford's CATL licensing model.

Analysts believe that this question has become quite intriguing: Is what GM is really opposed to "Chinese technology" itself, or is it the cost and time advantages that may arise if competitors take the lead in acquiring mature Chinese technology? There is currently no evidence sufficient to draw a conclusion for GM, but putting the two incidents together, it can at least be seen that behind the so-called "national security policy", it also affects the most realistic business competition among Detroit automakers.

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