Washington Presses Ford to Cut Its CATL and Geely Links
Transportation Secretary Sean Duffy wants Ford to rethink its tie-ups with CATL and Geely. The battery licensing and Europe partnerships at stake are hard to replace quickly.
US Transportation Secretary Sean Duffy has urged Ford to reconsider its partnerships with Chinese companies including battery maker CATL and automaker Geely, with Ford shares (F) trading at 13.68, down 2.29% on the day as of 18:54 GMT on 9 September 2026.
Ford Motor Co. (ticker: F) is being pushed by the US government to unwind the Chinese partnerships that sit underneath its cheapest battery technology and part of its European product plan. US Transportation Secretary Sean Duffy has urged the automaker to reconsider its arrangements with Chinese firms, naming battery manufacturer CATL and automaker Geely, according to electrive. Ford also works with Geely in Europe, which widens the question from a single battery plant to the shape of the company's international operations.
Shares reacted. Ford was quoted at 13.68, down 2.29% on the day from a previous close of 14.00, with an intraday range of 13.64 to 14.15, as of the last trade at 18:54 GMT on 9 September 2026. That was a weaker session than the broad market: the S&P 500 (SPY) was off 0.34% at $763.38, the Nasdaq 100 (QQQ) down 0.21% at $716.82 and the Dow 30 (DIA) down 0.61% at $524.82. Ford finished the session near the bottom of its own day range, which is the pattern of a stock absorbing news rather than shrugging at it.
Why a licensing deal, not a joint venture, was the design
The CATL relationship matters to Ford because of what it unlocks technically rather than what it costs on paper. CATL is the world's largest maker of lithium-iron-phosphate cells — LFP, a cathode chemistry that swaps nickel and cobalt for iron and phosphate. LFP cells are cheaper per kilowatt-hour and more tolerant of repeated fast charging, at the price of lower energy density, which is why they have taken over the entry-level end of the EV market and much of stationary storage.
Western automakers that wanted LFP at scale faced a choice: build the know-how internally over years, buy finished cells from Chinese suppliers, or license the process and run the plant themselves. Ford chose the licensing route, a structure specifically intended to keep the asset, the workforce and the output on American soil while paying a Chinese company for the recipe. That was always a politically exposed compromise, and it is the compromise Duffy is now questioning.
The Geely element is different in kind. It is not a chemistry licence but an industrial partnership, and it extends into Europe — a market where Ford has spent years shrinking its footprint and leaning on partners to keep vehicle programmes viable. Asking a global automaker to exit that sort of arrangement is not the same as cancelling a supply contract. Vehicle programmes are locked years ahead, tooling is bespoke, and homologation work does not transfer.
What unwinding would actually cost
Ford has not put a number on any of this, and neither has Washington. But the cost categories are visible without a disclosed figure. A licensing exit would strip out the process knowledge that a plant was designed around, leaving either a slower internally developed substitute or a return to buying finished cells — which is the outcome the licensing structure was built to avoid. Either path raises the landed cost of a battery pack, and battery packs are the single largest input in an electric vehicle's bill of materials.
There is a second-order effect that rarely makes headlines. Automakers price EV programmes years in advance against an assumed cell cost curve. If that curve flattens or reverses for one manufacturer and not its rivals, the damage shows up as thinner margins on vehicles already announced, or as delayed launches. Neither is easy to reverse once the decision is made.
- Chemistry access: LFP process know-how is concentrated in a small number of Chinese suppliers; substitutes exist but not on the same timeline.
- Plant economics: a facility engineered around a licensed process is not chemistry-agnostic; retooling costs time as well as capital.
- Europe exposure: the Geely relationship touches vehicle programmes, not just components, which lengthens any exit.
- Competitive asymmetry: rivals sourcing LFP without the same political attention keep their cost advantage.
The policy squeeze on battery supply chains
This is the sharp end of a contradiction American industrial policy has not resolved. Federal support has pushed automakers to build battery capacity domestically and to bring down EV prices. The technology that makes cheap EVs possible at volume today is disproportionately controlled by Chinese firms. Every workaround — licensing, minority stakes, technology transfer with domestic ownership — has been an attempt to satisfy both objectives at once. Duffy's intervention signals that the licensing workaround may no longer be treated as sufficient distance.
Federal support has pushed automakers to build battery capacity domestically and to bring down EV prices.
The consequences reach past Ford. If a licensing structure is deemed too close a tie, then every Western manufacturer using a comparable arrangement has to reassess its own risk. That pushes demand toward non-Chinese cell suppliers, toward alternative cathode chemistries, and toward upstream projects in lithium, nickel and graphite that can document a non-Chinese processing chain. Those suppliers have been arguing for years that policy risk, not price, would eventually be the deciding factor in who wins offtake contracts. This is the sort of episode that tests the claim.
What to watch from here
Ford has not said publicly how it will respond, and an urging from a cabinet secretary is not a regulation. The gap between political pressure and binding rules is where this story sits, and it can stay there for a long time or close quickly. Three things would tell investors which way it goes.
First, whether the pressure moves from rhetoric to a formal mechanism — procurement conditions, tax credit eligibility, or a national security review of the specific agreements. Second, whether Ford recommits publicly to the CATL licence or begins signalling alternative cell sourcing. Third, whether Duffy's argument is extended to other automakers, which would mark it as sector policy rather than a single-company matter.
For the stock, the 2.29% decline on the day is a modest reaction relative to the strategic question being asked. It reads as a market pricing uncertainty rather than a decision. If Washington converts pressure into rules, the repricing would need to account for a higher long-run battery cost for Ford and a slower EV ramp — neither of which is currently a disclosed number. Until then, the trade is a bet on how literally a cabinet secretary's advice gets enforced.
Key facts
- Ford share price: 13.68, -2.29% on the day as of 18:54 GMT, 9 Sep 2026 (ticker: F)
- Previous close / day range: 14.00; intraday 13.64–14.15
- Official pressure: US Transportation Secretary Sean Duffy urged Ford to reconsider Chinese partnerships
- Partners named: CATL (battery manufacturer) and Geely, the latter also a Ford partner in Europe
Frequently asked questions
What exactly did the US government ask Ford to do?
US Transportation Secretary Sean Duffy urged Ford to reconsider its partnerships with Chinese companies, specifically naming battery manufacturer CATL and automaker Geely. It was framed as pressure to rethink those ties rather than a formal regulatory order, and Ford's growing links with Chinese firms are facing renewed scrutiny from the US government.
How did Ford shares react?
Ford, trading under the symbol F, was quoted at 13.68 as of the last trade at 18:54 GMT on 9 September 2026, down 2.29% from a previous close of 14.00. The intraday range was 13.64 to 14.15, meaning the stock closed the session near its low and underperformed the S&P 500, which fell 0.34%.
Why does Ford work with CATL at all?
CATL is the world's largest producer of lithium-iron-phosphate cells, the cheaper battery chemistry that has taken over entry-level electric vehicles and stationary storage. Ford's arrangement gives it access to that process knowledge. Building comparable expertise internally takes years, which is why several Western automakers pursued licensing or supply deals with Chinese cell makers.
What is the Geely connection?
Geely is a Chinese automaker that Ford partners with, including in Europe. That relationship is broader than a component supply contract because it touches vehicle programmes, which are locked in years ahead and involve dedicated tooling and regulatory approvals. Unwinding an arrangement at that level is slower and more disruptive than switching a parts supplier.
Would cutting these ties raise Ford's EV costs?
Almost certainly, though neither Ford nor Washington has published a figure. Losing licensed access to lithium-iron-phosphate process technology would leave Ford either developing a substitute over a longer timeline or buying finished cells. Battery packs are the largest single input cost in an electric vehicle, so any change flows straight into vehicle margins.
Does this affect other automakers?
Potentially. If a technology licence is judged too close a tie to a Chinese firm, every Western manufacturer using a similar structure has to reassess its exposure. That would push demand toward non-Chinese cell producers and toward upstream lithium, nickel and graphite projects that can document a processing chain outside China.
Sources
Photo: EqualStock IN · Pexels Licence — source
