Ford is facing mounting pressure from U.S. lawmakers and the Trump administration over its relationships with Chinese companies, creating a difficult balancing act for the automaker as it tries to remain competitive in the global vehicle market while reducing its exposure to China.
The dispute centers on several Ford relationships, including its agreement to license battery technology from Chinese battery giant CATL for a Michigan factory, its partnership with Chinese automaker Geely in Europe, reported discussions involving BYD, and Ford’s continued production of the Lincoln Nautilus in China for the U.S. market.
According to Reuters, Transportation Secretary Sean Duffy sent Ford CEO Jim Farley a letter accusing the automaker of deepening its dependence on Chinese companies and raising national-security concerns. Republican lawmakers subsequently joined the criticism, while Ford strongly rejected the administration’s characterization of its business relationships.
The dispute highlights a difficult contradiction facing American automakers. Ford has repeatedly warned that Chinese manufacturers represent a serious competitive threat to the U.S. auto industry.
At the same time, the company argues that Chinese technology and manufacturing expertise can help it compete more effectively against those same companies. That tension is now becoming a political issue.
CATL Battery Technology Puts Ford Under Scrutiny
One of the biggest points of contention is Ford’s relationship with CATL. Ford established an agreement with CATL to license its battery technology for use at Ford’s BlueOval Battery Park, Michigan, facility in Marshall. Ford owns the plant and employs the workforce, while CATL provides licensed technology and technical expertise.
The factory began producing batteries this year, making the arrangement more than a theoretical partnership. Duffy has nevertheless questioned whether Ford’s reliance on CATL technology creates an unacceptable strategic dependency.
The transportation secretary pointed out that CATL is listed by the Pentagon among companies alleged to have ties to China’s military.
He argued that Ford should reduce its connections with major Chinese companies rather than incorporate their technology into critical U.S. manufacturing operations. Ford strongly disagrees.
The company says the Michigan facility is American-owned and American-operated. In its response, Ford emphasized that it owns the plant, controls its operations, and employs the workers.
The automaker also argued that using licensed Chinese battery technology allows batteries to be manufactured domestically instead of importing finished batteries from China. That distinction is central to Ford’s defense.
The company is effectively arguing that obtaining Chinese battery expertise while manufacturing the batteries in Michigan supports U.S. industrial capacity rather than undermining it. Washington officials who oppose the arrangement, however, are more concerned about the technology dependency itself.
The disagreement reflects a much larger question for the U.S. automotive industry: how much Chinese technology can American manufacturers use while still maintaining a strategically independent domestic supply chain?
Electric vehicles make the issue particularly complicated. China has become a dominant force in batteries, electric motors, mineral processing, and other parts of the EV supply chain. Cutting American companies completely off from Chinese technology could therefore make it more difficult and expensive to develop competitive electric vehicles.
Ford has chosen a middle path, but Washington is increasingly questioning whether that approach goes too far.
Geely and BYD Add to the Political Pressure
Ford’s relationship with CATL is not the only source of controversy. In July, Ford announced a partnership with Chinese automaker Geely involving its operations in Europe. The companies plan to jointly develop a new vehicle and use their respective capabilities to make Ford’s Valencia, Spain, operation more competitive.
The agreement immediately attracted criticism from U.S. lawmakers. Representative John Moolenaar, chairman of the House Select Committee on China, questioned why Ford would partner with a Chinese automaker while simultaneously asking Washington to protect American manufacturers from Chinese competition.
Ford’s argument is that Europe has become a highly competitive market and that partnerships can help reduce costs while allowing the company to respond more effectively to Chinese automakers. Reuters reported that Ford has described the changing European market as forcing automakers to become leaner and more efficient.
The Geely relationship therefore creates a similar contradiction to the CATL agreement.
Ford wants Washington to limit the ability of Chinese automakers to compete directly in the United States, but it is willing to cooperate with Chinese companies in other markets when management believes doing so makes Ford more competitive.
The situation is further complicated by reported discussions between Ford and BYD.
Duffy’s letter referenced potential cooperation involving BYD and hybrid-vehicle batteries. No completed agreement has been announced, and the details of any discussions remain limited. Nevertheless, the possibility of using technology or components from BYD has added another layer to the political scrutiny.
BYD is one of China’s largest automakers and has become a major global electric-vehicle manufacturer. U.S. lawmakers have been particularly concerned about Chinese EV companies gaining access to the American market, with Congress considering additional restrictions.
That makes any potential Ford-BYD relationship politically sensitive even if the companies were to cooperate primarily outside the United States.
Ford CEO Jim Farley has been one of the industry’s most outspoken executives about the threat posed by Chinese automakers. He has repeatedly warned that China’s cost advantages and manufacturing scale could put American manufacturers under enormous pressure.
Ford therefore finds itself trying to accomplish two things at once: prevent Chinese automakers from gaining an unfair advantage in the U.S. while using Chinese technology and partnerships where Ford believes they provide a competitive benefit.
Lincoln Nautilus Production Creates Another Flashpoint
Ford’s manufacturing relationship with China is another major point of contention. The Lincoln Nautilus sold in the United States is currently produced in China. Ford plans to shift production of the model to the United States beginning in 2030, but Duffy criticized the company for continuing to rely on Chinese manufacturing until then.
From Washington’s perspective, the issue is straightforward: if Ford wants to reduce America’s dependence on Chinese manufacturing, the company should move production sooner.
Ford has pointed to its plans to increase U.S. manufacturing and has defended the broader strategy. Commerce Secretary Howard Lutnick recently praised Ford’s decision to bring some Lincoln production back to the United States, creating another example of the inconsistent signals coming from the administration.
Reuters reported that President Donald Trump and other administration officials have at times praised Ford’s domestic investments, even as other officials have criticized the company’s Chinese relationships.
The White House recently highlighted Ford’s approximately $3 billion investment in the Michigan battery facility and the roughly 1,700 jobs associated with it. That praise conflicts with the criticism that Ford’s use of CATL technology undermines U.S. manufacturing independence.
Ford has seized on that contradiction. The automaker called Duffy’s letter a misguided attempt to generate headlines and said the company maintains a productive relationship with the administration.
Farley also disputed Duffy’s claim that Ford had proposed a framework that would facilitate Chinese automakers establishing joint ventures on U.S. soil. Ford said it had not proposed such a framework.
The conflicting positions within Washington create uncertainty for Ford and other automakers.
Ilaria Mazzocco of the Center for Strategic and International Studies told Reuters that there is broad agreement in Washington that the United States wants to reduce dependence on China, but much less agreement over what that reduction should actually look like.
That uncertainty matters because automotive investments require years of planning. Ford must decide where to build batteries, which technologies to license, which suppliers to use, and where to manufacture vehicles long before those products reach customers.
Sudden policy changes could make some investments less attractive after significant money has already been committed. At the same time, Ford cannot ignore the competitive threat coming from China.
Chinese automakers have developed strong positions in batteries, EV manufacturing, and cost-efficient vehicle production. Ford believes access to some of that technology can help it compete, while Washington officials increasingly argue that such cooperation risks strengthening companies connected to a strategic rival.
The conflict is therefore unlikely to disappear quickly. Ford’s strategy is based on maintaining American ownership and manufacturing while selectively using Chinese technology and partnerships where management believes they provide a competitive advantage. Washington is increasingly questioning whether that distinction is sufficient.
For Ford, the answer may depend on how quickly it can develop domestic alternatives to Chinese technology without sacrificing cost or competitiveness.
The company is already investing heavily in U.S. battery production and reshoring vehicle manufacturing. But replacing Chinese expertise entirely could take years and require significantly more capital.
The current dispute therefore represents more than a disagreement between Ford and one government official. It reflects a much broader debate about how American automakers should compete against China.
Ford wants access to the technology it believes it needs to remain competitive. U.S. officials want American manufacturers to become less dependent on Chinese companies.
Finding a way to satisfy both objectives could become one of Ford’s most important strategic challenges in the years ahead.
