US Transport Secretary Orders Ford to Cut Chinese Ties
The US transportation secretary has requested Ford to sever its connections with CATL and Geely, raising concerns over a joint venture between the carmaker and Geely at their Valencia plant. The European Parliament is currently drafting legislation that would mandate such arrangements, limiting Chinese investors’ stakes in strategic sectors to 49% and mandating technology transfer.
The US transportation secretary expressed "profound concern" about Ford’s ties with CATL and delays in moving Lincoln production out of China. In a letter to CEO Jim Farley dated September 8th, Sean Duffy highlighted three main issues: a CATL battery license in Michigan, a delay in relocating Lincoln production, and the joint venture with Geely in Spain.
Ford rejected these claims, describing it as "a wrongheaded attempt to capture headlines." However, Duffy did not accuse Ford of any legal violations.
The Spanish joint venture is particularly noteworthy. In July, Ford and Geely agreed to produce four models together at the Valencia plant, with Ford holding a 66% stake and Geely owning the remaining 34%. The European Industrial Accelerator Act currently being drafted in Brussels would make this structure mandatory for investors from countries dominating global markets.
The proposed legislation goes further, demanding that these investors cap their stakes at 49%, transfer technology to EU entities, source 60% of inputs from Europe, employ at least 60% EU workers, and reinvest 1% of annual revenue in European research. The rapporteurs, Christophe Grudler, Pierre Jouvet, and Anna Cavazzini, suggest lowering the threshold for state aid from EUR 100M to EUR 50M.
This shift reflects Europe’s realization that it has been subsidizing these partnerships without gaining significant technological benefits. The Transport and Environment study found no technology transfer requirements in Chinese-European battery collaborations.
Washington’s response to such partnerships is to dismantle them, while Brussels aims to make them more profitable for Europe by setting specific price terms. Both approaches target the same reality: China now leads in battery technology, but only one side believes knowledge can flow back.