Ford’s attempt to learn from Chinese automotive technology while keeping Chinese automakers out of its home market has become a political flashpoint in Washington. Transportation Secretary Sean Duffy has urged the company to rethink ties involving battery giant CATL, automaker Geely and reported discussions with BYD, while Republican lawmakers have amplified concerns about national security and industrial dependence.
Ford argues that the criticism misses an important distinction: using foreign expertise to manufacture in America is not the same as surrendering American factories or jobs. That defence has not settled the fight. Instead, the dispute is exposing a much larger question facing Detroit—whether U.S. automakers can realistically catch China in batteries and electric vehicles without working with some of the Chinese companies Washington increasingly wants them to avoid.
Washington Turns Ford Into a China Test Case
The latest escalation began when Transportation Secretary Sean Duffy publicly challenged Ford’s strategy toward China, raising concerns about the automaker’s relationships with CATL, Geely and BYD. His intervention quickly spread beyond the administration. Republican Senator Rick Scott endorsed the criticism, while Representative John Moolenaar, chairman of the House Select Committee on China, argued that Ford should be working with U.S. allies rather than companies associated with a strategic competitor. The committee reinforced that message by contrasting Ford’s warnings about Chinese automotive competition with its own commercial relationships involving Chinese companies.
The political pressure matters because Ford is no longer defending a single controversial project. Washington is examining a collection of decisions: CATL technology being used in Michigan, a manufacturing partnership with Geely in Spain, reported battery discussions with BYD and continued Lincoln production in China. Each can be explained separately as an industrial decision. Taken together, critics are portraying them as evidence that Ford remains unusually dependent on Chinese expertise even while asking policymakers to protect American automakers from Chinese competition.
CATL’s Technology Sits at the Centre of the Battle
Ford’s arrangement with Contemporary Amperex Technology Co. Limited, better known as CATL, remains the most politically sensitive piece. Ford originally announced a $3.5-billion lithium-iron-phosphate battery factory in Marshall, Michigan, in 2023. The project was later resized, with Ford saying the plant would have approximately 20 gigawatt-hours of planned capacity and create more than 1,700 jobs. Crucially, Ford says the factory is owned and controlled by Ford. CATL provides licensed LFP battery technology and related expertise rather than owning the American manufacturing operation.
Washington’s concern intensified after the U.S. Defense Department placed CATL on its Section 1260H list of companies it identifies as Chinese military companies. CATL rejects allegations of military involvement and has sought removal from the designation. The technological stakes help explain Ford’s persistence. The International Energy Agency says LFP chemistry represented more than 55% of EV battery deployment worldwide in 2025, while China produced more than 80% of the world’s battery cells. Walking away from Chinese knowledge therefore could mean walking away from some of the industry’s most mature low-cost battery expertise.
Ford Says Michigan Shows Why Licensing Can Help America
Ford’s defence of the CATL arrangement is straightforward: Chinese intellectual property is being used to manufacture batteries inside a Ford-controlled American facility with American employees. By June 2026, Ford said BlueOval Battery Park Michigan had hired more than 500 workers and was aiming for 800 by year-end on the way to approximately 1,700 jobs. The company also reported receiving more than 11,500 applications. More than 70% of employees at that stage came from Marshall, Albion and Battle Creek, giving the geopolitical dispute a distinctly local dimension for communities hoping the factory becomes a lasting source of manufacturing work.
The factory was already assembling complete LFP cells during Ford’s production-readiness process by June, with Ford planning battery shipments during 2026. Those cells are intended for an affordable electric truck based on Ford’s Universal EV Platform. To Ford, this is technology transfer in the traditional industrial sense: learn a process developed elsewhere, install it domestically and build local capability. Critics see a different risk—that maintaining production quality may leave Ford dependent on continuing access to Chinese technical knowledge even if ownership and employment remain American.
The Geely Partnership Gives Washington Another Target
Ford’s July agreement with Geely widened the dispute beyond batteries. The companies plan to establish a joint venture at Ford’s Valencia factory in Spain, with Ford holding 66% and Geely Auto 34%. Subject to regulatory approvals, operations are expected to begin during the first half of 2027, followed by new vehicle production in 2028. The planned manufacturing programme includes Ford-branded multi-energy vehicles and two Geely electric models. Ford and Geely say the arrangement should improve factory utilization, spread development costs and provide greater stability for the Valencia workforce.
For Geely, the deal also provides a major European manufacturing foothold. The Valencia facility has potential annual capacity of about 500,000 vehicles, while Geely reported 474,228 overseas sales during the first half of 2026, 158% more than a year earlier. Those numbers help explain Washington’s anxiety. Ford sees a capable partner that can help it meet an increasingly unforgiving European cost benchmark. Critics see a prominent American manufacturer helping an ambitious Chinese competitor localize production in one of the world’s most important car markets. Both interpretations can be true at the same time.
Reported BYD Talks Make the Optics Even Harder
BYD adds another layer because Ford has not announced a comparable joint venture with the company. Reuters reported in January that Ford and BYD were discussing a possible agreement involving batteries for hybrid vehicles, with one possibility involving use outside the United States. Ford acknowledged that it routinely speaks with numerous companies but did not confirm a specific final arrangement. That distinction is important: discussions should not be described as a completed BYD supply agreement. Nevertheless, Duffy cited Ford’s pursuit of Chinese battery relationships as part of his broader argument that the automaker is becoming too intertwined with Chinese technology.
BYD itself has become more politically sensitive in Washington. The Defense Department added BYD to its updated Section 1260H list in June 2026. Commercially, however, the company represents exactly the kind of competitor traditional automakers cannot easily ignore. BYD’s overseas vehicle sales reached 175,349 in June alone, up nearly 95% from a year earlier, according to company figures reported by Reuters. For Ford, talking to leading battery suppliers can look like rational procurement. In Washington, the same conversation can now become evidence in a national-security argument.
The Lincoln Nautilus Has Become a Symbol of the Timeline Problem
Another point of contention has little to do with technology licensing. Ford currently imports the Lincoln Nautilus from China and plans to shift production of some Lincoln vehicles intended for the American market to the United States beginning in 2030. Ford CEO Jim Farley has described the change as necessary to strengthen the domestic manufacturing base. The economics are substantial: Ford confirmed that the China-built Nautilus faces a 52.5% U.S. tariff, giving the company a powerful financial reason to relocate production.
Yet the same announcement produced dramatically different reactions inside the administration. Commerce Secretary Howard Lutnick praised Ford’s domestic manufacturing direction when the plan emerged in August. Duffy subsequently criticized the 2030 timing, arguing that it leaves Ford dependent on Chinese manufacturing for too many additional years. That contradiction captures the company’s problem. Moving an established model between countries involves factories, suppliers, tooling, workforce planning and regulatory approvals; it cannot happen instantly. Politically, however, a four-year transition can be portrayed not as rapid reshoring but as four more years in which an iconic American brand continues importing a vehicle assembled in China.
Ford’s Own China Warnings Are Coming Back at It
Jim Farley has been one of the more outspoken Western auto executives about China’s competitive strength. Ford has supported restrictions intended to prevent Chinese automakers from establishing an unrestricted presence in the U.S. market, and Farley has repeatedly emphasized their enormous manufacturing capacity and cost advantages. That history gives lawmakers an obvious line of attack: if Chinese manufacturers present such a serious threat, why is Ford simultaneously turning to Chinese companies for battery expertise, manufacturing partnerships and potentially additional components?
The uncomfortable answer is that China’s competitive advantage is partly technological and industrial, not merely the result of access to Western markets. The IEA estimates China produced roughly 70% of the world’s electric cars and more than 80% of battery cells in 2025. Chinese manufacturers also accounted for more than half of global battery-electric vehicle sales. In the first half of 2026, total Chinese vehicle exports rose about 65% year over year, while electric-car exports more than doubled. For Ford, studying or partnering with companies inside that ecosystem can therefore be viewed as a survival strategy rather than an endorsement of unrestricted Chinese entry into America.
Ford Is Backing a Chinese-Car Ban at the Same Time
The contradiction becomes sharper because Ford belongs to the Alliance for Automotive Innovation, the industry group that recently urged congressional leaders to enact a permanent ban on Chinese connected vehicles, hardware and software before the end of the current Congress. The alliance represents most major manufacturers operating in the United States and says the automotive sector supports roughly 11 million American jobs. Its argument centres not merely on price competition but on national-security concerns surrounding connected vehicles capable of collecting and transmitting large quantities of data.
Ford therefore occupies an unusual position. It supports keeping Chinese-branded connected vehicles out of the U.S. while arguing that selected Chinese technology can safely be licensed, localized or used through partnerships elsewhere. Those positions are not automatically inconsistent: governments routinely distinguish between importing a finished foreign product and licensing knowledge for domestically controlled manufacturing. The difficulty is drawing a durable line. Congress increasingly appears interested in ownership, software, hardware, supply chains and corporate relationships rather than simply the country stamped on a vehicle’s final assembly label. That creates a much narrower path for Ford.
The Trump Administration Is Sending Ford Conflicting Signals
Perhaps the most striking feature of the controversy is that Ford is receiving criticism and praise from the same administration. After Republican attacks intensified, the White House publicly praised Ford as a major American company that had increased domestic investment and brought production back to the United States. Commerce Secretary Howard Lutnick had also welcomed Ford’s decision to shift additional Lincoln production home. Transportation Secretary Duffy, meanwhile, has portrayed several aspects of Ford’s China strategy as unacceptable dependence.
President Donald Trump has added another complication. Earlier in 2026, he indicated that Chinese automakers could potentially be welcomed if they built factories in the United States and employed American workers. That idea is considerably more permissive than a policy of severing major U.S. manufacturers from Chinese automotive companies altogether. For executives making investments that can take five or ten years to pay back, those distinctions are enormous. Investors noticed the uncertainty as well: Ford shares fell about 4% to $13.45 during the latest flare-up. Policy ambiguity is becoming an industrial cost of its own.
Ford’s Real Fight Is Over Where Washington Draws the Line
The immediate dispute may cool, but the underlying issue is unlikely to disappear. Congress is considering stronger restrictions on Chinese vehicles, the auto industry is pushing to make existing connected-vehicle barriers permanent, and U.S.-China economic relations remain tied to broader negotiations between Washington and Beijing. Meanwhile, Ford’s major decisions are already moving forward: the Michigan LFP programme is ramping, the Geely venture is targeting production beginning in 2028, and Lincoln reshoring is planned from 2030. Reported discussions involving BYD remain just that—reported talks rather than a confirmed supply agreement.
What Washington eventually decides could influence far more than Ford. Automakers need to know whether Chinese technology may be licensed into an American-owned factory, whether overseas joint ventures are politically acceptable, and whether working with a listed Chinese company automatically creates unacceptable exposure. China’s embassy has argued that normal commercial cooperation should not be politicized. U.S. officials increasingly argue that automotive technology has become inseparable from economic security. Ford is now caught directly between those two positions—and its choices may help establish the rules every global automaker eventually has to follow.
