On September 9, 2026, Reuters reported that U.S. Transportation Secretary Sean Duffy sent a letter to Ford Motor Company (NYSE:F) CEO Jim Farley criticizing the automaker’s business relationships with Chinese battery maker CATL and Chinese automakers Geely and BYD as raising “profound concern.”
It specifically flagged Ford’s licensed CATL battery technology at its Marshall, Michigan plant, its joint venture with Geely in Spain, and its decision not to move Lincoln Nautilus production out of China until 2030. Ford responded that Duffy’s letter was “a wrongheaded attempt to capture headlines,” noting that it owns the Marshall plant, controls its operations, and employs the workforce there, unlike companies that simply import Chinese-made batteries.
Bull Case
Ford Motor Company (NYSE:F) can argue that its CATL partnership still solidifies U.S. battery manufacturing rather than becoming more dependent on Chinese imports. Ford owns and operates its Marshall, Michigan battery plant. It allows the company to manufacture batteries domestically while licensing CATL technology. That structure could help Ford expand its U.S. EV production capacity and reduce the need to import finished Chinese battery packs.
Ford’s improving financial performance gives the firm more flexibility to manage the political pressure. The automaker raised its full-year adjusted EBIT guidance to $10 billion-$11 billion after second-quarter results exceeded expectations, with record Bronco sales and a stronger product mix supporting the improvement. Stronger operating earnings could give Ford more resources to adjust its battery strategy if policymakers impose more restrictions on Chinese technology.
The company’s existing U.S. manufacturing footprint could become a competitive advantage if Washington tightens restrictions on Chinese automotive technology. Ford has already invested in domestic battery production instead of relying entirely on imported battery packs. Model e losses have narrowed for three consecutive quarters. If policymakers force automakers to cut Chinese supply-chain reliance, Ford can use its existing U.S. factories to adapt faster than rivals that depend heavily on Chinese parts.
Bear Case
Ford Motor Company (NYSE:F)’s relationship with CATL carries major political and reputational risk because of the battery maker’s alleged links to China’s military. The Trump administration specifically criticized Ford’s partnership with CATL. They underlined the company’s presence on a Pentagon list of companies with alleged Chinese military ties. Hence, political scrutiny could pressure Ford to modify the arrangement and increase the cost of developing alternative battery technology.
Potential U.S. restrictions on Chinese vehicles and components could force Ford to make costly changes to its supply chain. Congress is considering tighter limits on Chinese automotive technology. Ford already faces criticism over its reliance on CATL technology. New legislation could increase battery costs, delay EV production, or require Ford to replace technology that currently backs up its domestic manufacturing plans.
Ford’s production of the Lincoln Nautilus in China leaves the firm exposed to further trade and political pressure. The company plans to keep producing the model in China until 2030. It gives critics a multi-year example of the company’s reliance on Chinese manufacturing. Therefore, rising U.S.-China tensions could increase tariff, supply-chain, and regulatory risks for Ford and complicate its efforts to maintain predictable costs and margins.
Hedge Fund Sentiment
Ford Motor Company (NYSE:F)’s hedge fund holder count held steady at 50 funds in both the second and first quarters, though position value slipped to $1.02 billion from $1.12 billion, according to Insider Monkey’s database.
General Motors, which faces similar scrutiny over its own China exposure, saw a larger decline, with holders falling to 75 from 77 and position value dropping to $4.87 billion from $6.08 billion.
Conclusion
Ford’s domestic battery investment and improving financial results give the automaker some flexibility as Washington scrutinizes its ties to Chinese companies. Nonetheless, growing political pressure over CATL technology and continued China-based production could increase regulatory, trade and supply-chain risks. So Ford needs to preserve the cost and manufacturing benefits of its Chinese partnerships while reducing its exposure to China-related policy risks if it wants to protect margins and strengthen investor confidence.
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