US Transportation Secretary Demands Ford Sever Ties With Chinese Automotive Tech Partners

The U.S. Department of Transportation has instructed Ford Motor Co. to sever operational connections with Chinese companies, reflecting increased federal scrutiny over foreign technology dependencies. In a letter delivered on Sept. 8 to Ford Chief Executive Officer Jim Farley, U.S. Transportation Secretary Sean Duffy expressed strong reservations regarding the automaker's global partnerships with Chinese enterprises CATL and Geely, as reported by The Next Web.

Duffy cited three main operational arrangements in his letter: a battery licensing agreement with CATL in Michigan, delays in shifting manufacturing of Lincoln vehicles out of China, and a joint venture with Geely at Ford's assembly facility in Valencia, Spain. In the letter, Duffy wrote that when a company intentionally chooses to deepen operational dependencies on strategic competitors, it fails to act as the reliable partner the American public and the agency require.

Ford rejected the cabinet official's criticism, characterizing the communication as a wrongheaded attempt to capture headlines. The transportation secretary did not claim that the automaker had violated any federal laws through its current commercial agreements.

The joint venture in Spain, finalized by Ford and Geely in July, outlines plans to co-produce four vehicle models at the Valencia assembly plant starting in 2028, with Ford retaining a 66% equity stake and Geely holding the remaining 34%. While U.S. officials seek to end such cross-border industrial partnerships, European legislators are pursuing policy that would enforce similar joint venture frameworks.

Members of the European Parliament are currently shaping the Industrial Accelerator Act, a legislative proposal designed to govern foreign direct investment in key industrial sectors. Under provisions drafted by MEP rapporteurs Christophe Grudler, Pierre Jouvet, and Anna Cavazzini, international investors from nations controlling 40% or more of a global market would be required to establish joint ventures with European firms, cap foreign equity at 49%, and transfer technical know-how to local partners.

The parliamentary draft also proposes mandates requiring that 60% of facility workforces consist of EU workers, that 1% of total annual revenues be reinvested into European research initiatives, and that 30% of supply chain components be sourced within the trade block. Additionally, the rapporteurs seek to lower the enforcement threshold to projects valued at EUR 50 million, compared to the European Commission's original proposal of EUR 100 million.

European policy efforts around forced technology transfers follow research published by environmental group Transport and Environment, which found no tech-transfer clauses in existing European-Chinese battery agreements despite substantial state support. Public funding includes EUR 900 million allocated for manufacturing facilities in Hungary and Poland, alongside approximately EUR 300 million directed to a CATL joint venture with Stellantis in Spain.

The regulatory contrast underscores differing approaches between U.S. and European leadership in managing China's market lead in electric vehicle battery technology. While Washington seeks to sever domestic corporate reliance on Chinese entities, European regulators aim to utilize statutory equity limits to ensure regional access to technical knowledge.