The U.S. Transportation Department has urged Ford Motor Co. to cut ties with Chinese technology suppliers, warning that the automaker’s reliance on foreign innovation poses a threat to American jobs and national security. In a letter to CEO Jim Farley dated Sept. 3, Transportation Secretary Sean Duffy expressed deep alarm over Ford’s partnership with Chinese companies, arguing that the arrangement intertwines the American brand’s future with state-backed enterprises.
China ties at Michigan battery plant
The Department of Transportation emphasized that Ford must demonstrate corporate citizenship that prioritizes the long-term resilience of the U.S. automotive ecosystem. Duffy specifically criticized the automaker’s continued reliance on licensed technology from China-based battery manufacturer Contemporary Amperex Technology Co., or CATL, at the BlueOval Battery Park facility in Marshall, Michigan.
Ford announced in February 2023 that it was investing $3.5 billion in the Michigan plant to manufacture batteries for future electric vehicles. Although the plant is wholly owned by the company, it reached a licensing agreement to produce lithium iron phosphate battery cells using CATL’s “battery cell knowledge and services.” The first cells are expected to ship by the end of the year, according to the automaker.
This licensing arrangement allows Ford to access established chemical compositions and manufacturing protocols without the massive capital expenditure required to develop the technology from scratch. By leveraging the existing intellectual property of a leading global supplier, the Michigan facility can scale production more rapidly to meet anticipated demand for electric fleet expansion.
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When a company intentionally chooses to deepen operational dependencies on strategic competitors, it fails to act as the reliable partner the American public and this DOT require, Duffy wrote. Iconic American companies, like Ford, are also expected to out-innovate competitors. To that end, they need to chart clear paths to technological self-reliance.
This tension highlights a practical dilemma for manufacturers: reliance on established foreign technology can accelerate domestic production in the short term, but it may create vulnerabilities that limit future autonomy as geopolitical tensions rise.
Dispute over joint ventures and timelines
Ford pushed back against the accusations in a swift response, defending its strategy and disputing the DOT’s characterization of its operations. The company clarified that its agreement with CATL is a “limited technology-licensing and services agreement,” not a joint venture or a foreign-owned manufacturing operation.
Secretary Duffy’s letter is a wrongheaded attempt to capture headlines at the expense of a company that has done more for American manufacturing than virtually any other in the nation’s history, Ford wrote.
Ford also argued that the DOT’s letter contains factual errors, stating it has not proposed a joint-venture framework. The automaker noted that the reference in the letter to a joint venture actually concerns its partnership with China-based Geely Auto to build cars at Ford’s assembly plant in Valencia, Spain. Duffy had said in the letter that this joint venture helps strategic adversaries secure a vital foothold in Western markets.
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The Geely partnership in Valencia is structured as a joint venture, which is a distinct business model from the licensing agreement in Michigan. Under this Spanish arrangement, Ford collaborates with a Chinese manufacturer to produce vehicles, whereas the Michigan facility utilizes licensed IP to build components under Ford’s direct control.
Regarding the production of the Lincoln Nautilus, Ford disputed the DOT’s timeline concerns. In August, the company announced plans to phase out imports of the brand from China to the U.S. beginning in 2030, a shift that would end reliance on manufacturing subject to a 52.5% tariff rate. Duffy said delaying this reshoring until 2030 leaves an unacceptable, multi-year window of reliance on Chinese manufacturing while depriving skilled American workers of vital manufacturing jobs.
Ford believes the United States must compete from a position of strength with American ownership, American jobs, American production and strong national-security safeguards, the company wrote. That is exactly what we are doing across our U.S. manufacturing footprint.
Ford also criticized the DOT for not reaching out before publishing the letter, suggesting that dialogue would have allowed for a clearer explanation of its commitments. Had Secretary Duffy reached out before issuing his letter to the press, we would have been happy to share more details about Ford’s U.S. commitment, the automaker said.
