The US Transportation Secretary has urged Ford to sever links with Chinese firms CATL and Geely, opposing the automaker's joint venture with Geely at its Valencia plant. Meanwhile, European regulators are tightening rules that will mandate such partnerships meet specific ownership and technology transfer criteria.
- US transport secretary pressures Ford to cut ties with CATL and Geely
- EU law proposed to limit Chinese ownership and require tech transfers
- Ford-Geely joint venture in Spain faces regulatory and political challenges
What happened
The US Transportation Secretary, Sean Duffy, sent a letter to Ford CEO Jim Farley expressing serious concerns about Ford’s ongoing partnerships with Chinese companies CATL and Geely. A focal point of the objection is the joint venture Ford is establishing with Geely at its Valencia plant, where the two firms plan to produce four vehicle models together starting in 2028.
This joint venture assigns 66% ownership to Ford and 34% to Geely, but Duffy argues that deepening ties with Chinese competitors creates unacceptable strategic dependencies. Ford responded by calling the letter a mischaracterization. Meanwhile, European lawmakers are drafting new legislation that would cap Chinese ownership stakes at 49% in critical sectors and require technology transfer to European entities.
Why it matters
The developments reflect heightened geopolitical tensions surrounding control over cutting-edge automotive technologies, particularly batteries and electric vehicles, sectors where Chinese companies currently dominate. The US position indicates a preference for dismantling operational ties with Chinese firms regarded as strategic competitors, while the EU seeks regulatory mechanisms that enforce transfers of technology and limit foreign control while preserving investment flows.
This divergence has significant implications for global auto manufacturers like Ford, which must navigate conflicting demands in major markets while managing complex supply chains and innovation partnerships. The EU’s Industrial Accelerator Act, if adopted, will enforce tighter requirements—such as 60% European workforce participation and substantial reinvestment in local R&D—effectively reshaping the nature of international joint ventures in the industry.
What to watch next
Stakeholders should monitor the progress of the EU Industrial Accelerator Act, which aims to enforce ownership limits and technology transfer obligations on Chinese investors in EU strategic sectors. The enforcement threshold is proposed at EUR 50 million, lower than the Commission's earlier EUR 100 million, increasing its potential impact on automotive and battery partnerships.
At the same time, how Ford responds to the US government’s demands will be crucial. A forced reduction or termination of these Chinese ties could disrupt Ford’s production plans and supply chains. Industry observers will also look for signals on whether other automakers with similar partnerships face increased scrutiny, indicating a broader shift in international industry regulation and geopolitical strategy.