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Why Are Ford's China Partnerships Drawing Regulatory Scrutiny?
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Key Takeaways
Ford faces scrutiny over partnerships with CATL and Geely and potential Chinese reliance.
Ford uses CATL technology for Michigan LFP batteries while retaining U.S. manufacturing control.
A planned Geely venture at Ford's Valencia plant will produce multi-energy vehicles for Europe.
Ford Motor Company (F - Free Report) is facing scrutiny from U.S. Transportation Secretary Sean Duffy over its business relationships with Chinese companies, including battery supplier CATL and automaker Geely Automobile Holdings Limited (GELHY - Free Report) . Per the letter, the automaker’s recent strategic moves could deepen its reliance on Chinese state-backed enterprises.
Ford’s partnership with CATL primarily centers on battery technology and supply. The two companies announced a global strategic cooperation in 2022, under which CATL would supply lithium-iron-phosphate (LFP) battery packs for vehicles such as the Mustang Mach-E and F-150 Lightning. Ford subsequently structured its Michigan LFP battery project around licensing CATL’s technology, rather than having CATL own or operate the facility. This arrangement allows Ford to retain control of U.S. manufacturing while leveraging CATL’s battery expertise. In 2026, Ford also planned to explore CATL-derived technology for grid-scale and data-center energy-storage applications in addition to electric vehicles.
Ford’s relationship with Geely is broader, involving plans for a European manufacturing joint venture. Following discussions earlier in 2026 about using Ford’s European production facilities and potentially collaborating on vehicle technologies, the companies announced in July 2026 plans to establish a joint venture at Ford’s Valencia plant in Spain. The venture is expected to produce Ford- and Geely-branded multi-energy passenger vehicles for the European market, improving factory utilization and sharing the substantial costs of developing and manufacturing EVs and other powertrain technologies.
Tesla, Inc. (TSLA - Free Report) faces a regulatory probe after the U.S. National Highway Traffic Safety Administration opened an investigation into the certification of nearly 1,000 Cybercabs, raising questions about how the driverless vehicles meet federal safety standards. The inquiry comes as Tesla begins commercial deployment of a limited number of two-seat Cybercabs in Austin, TX. Tesla plans to gradually expand the service by adding more vehicles and eventually bringing the robotaxis to other markets.
General Motors Company (GM - Free Report) is facing an expanded U.S. safety investigation into engine failures affecting nearly one million pickup trucks and SUVs. GM previously recalled nearly 600,000 vehicles from the 2021-2024 model years over L87 engine problems linked to supplier quality issues. However, the issue has persisted despite recall repairs, with GM receiving nearly 7,000 complaints involving post-recall engine failures, while NHTSA has received 499 complaints.
F’s Price Performance, Valuation and Estimates
Ford has outperformed the Zacks Automotive-Domestic industry in the last six months. Its shares have gained 11.1% against the industry’s decline of 4.8%.
Image Source: Zacks Investment Research
From a valuation perspective, F appears undervalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 0.3, lower than the industry’s 3.34.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for F’s 2026 and 2027 EPS has moved up 20 cents and 9 cents, respectively, in the past 60 days.
View the Zacks #1 Rank List
Image: Bigstock
Why Are Ford's China Partnerships Drawing Regulatory Scrutiny?
Key Takeaways
Ford Motor Company (F - Free Report) is facing scrutiny from U.S. Transportation Secretary Sean Duffy over its business relationships with Chinese companies, including battery supplier CATL and automaker Geely Automobile Holdings Limited (GELHY - Free Report) . Per the letter, the automaker’s recent strategic moves could deepen its reliance on Chinese state-backed enterprises.
Ford’s partnership with CATL primarily centers on battery technology and supply. The two companies announced a global strategic cooperation in 2022, under which CATL would supply lithium-iron-phosphate (LFP) battery packs for vehicles such as the Mustang Mach-E and F-150 Lightning. Ford subsequently structured its Michigan LFP battery project around licensing CATL’s technology, rather than having CATL own or operate the facility. This arrangement allows Ford to retain control of U.S. manufacturing while leveraging CATL’s battery expertise. In 2026, Ford also planned to explore CATL-derived technology for grid-scale and data-center energy-storage applications in addition to electric vehicles.
Ford’s relationship with Geely is broader, involving plans for a European manufacturing joint venture. Following discussions earlier in 2026 about using Ford’s European production facilities and potentially collaborating on vehicle technologies, the companies announced in July 2026 plans to establish a joint venture at Ford’s Valencia plant in Spain. The venture is expected to produce Ford- and Geely-branded multi-energy passenger vehicles for the European market, improving factory utilization and sharing the substantial costs of developing and manufacturing EVs and other powertrain technologies.
The two companies also have historical links. Ford sold Volvo Cars to Geely in 2010, although Volvo is no longer part of Ford’s operations. F carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ford’s Peers Facing Regulatory Scrutiny
Tesla, Inc. (TSLA - Free Report) faces a regulatory probe after the U.S. National Highway Traffic Safety Administration opened an investigation into the certification of nearly 1,000 Cybercabs, raising questions about how the driverless vehicles meet federal safety standards. The inquiry comes as Tesla begins commercial deployment of a limited number of two-seat Cybercabs in Austin, TX. Tesla plans to gradually expand the service by adding more vehicles and eventually bringing the robotaxis to other markets.
General Motors Company (GM - Free Report) is facing an expanded U.S. safety investigation into engine failures affecting nearly one million pickup trucks and SUVs. GM previously recalled nearly 600,000 vehicles from the 2021-2024 model years over L87 engine problems linked to supplier quality issues. However, the issue has persisted despite recall repairs, with GM receiving nearly 7,000 complaints involving post-recall engine failures, while NHTSA has received 499 complaints.
F’s Price Performance, Valuation and Estimates
Ford has outperformed the Zacks Automotive-Domestic industry in the last six months. Its shares have gained 11.1% against the industry’s decline of 4.8%.
Image Source: Zacks Investment Research
From a valuation perspective, F appears undervalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 0.3, lower than the industry’s 3.34.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for F’s 2026 and 2027 EPS has moved up 20 cents and 9 cents, respectively, in the past 60 days.
Image Source: Zacks Investment Research