Ford CEO Jim Farley is urging the United States to move cautiously before opening the door to Chinese automakers, warning that Europe offers a glimpse of what could happen if policymakers wait too long to respond to the country's rapidly expanding auto industry.
At the Automotive News Congress in Detroit, Farley said the U.S. should be "extremely careful around how the Chinese OEMs come to our country," as manufacturers expand aggressively overseas and put mounting pressure on established automakers. However, Farley said "it's too late" for European countries.
The warning comes as China's auto industry undergoes a dramatic transformation from a primarily domestic manufacturing powerhouse into one of the world's biggest vehicle exporters. China is projected to export roughly 12 million vehicles in 2026, compared with about 3 million in 2022, with cars flowing into Europe, Latin America and other international markets.
Chinese manufacturers have become increasingly formidable competitors on price, battery technology, software and vehicle development speed. Some are also pushing charging technology forward rapidly. Geely, BYD and battery giant CATL have recently unveiled systems designed to reduce EV charging times dramatically.
Yet Farley's position is more complicated than simply keeping Chinese companies out. Ford itself works with Chinese companies when executives believe it gives the Detroit automaker access to technology or manufacturing economics it needs.
"We're also going to compete with them directly," Farley said. "They aren't mutually exclusive." One of the most closely watched examples is Ford's relationship with CATL. Ford is using technology licensed from the Chinese battery giant to produce lower-cost batteries at a Michigan facility.
Ford has also deepened its relationship with Chinese automaker Geely. In July, Ford and Geely announced plans for a joint venture centered on Ford's Valencia, Spain, factory. Under the proposed structure, Ford would own 66% of the venture and Geely 34%, with production expected to begin in 2028. The companies plan to manufacture Ford and Geely vehicles for European customers, including two electric Geely SUVs.
Ford says the partnership is intended to lower costs, make better use of the Valencia plant and help the company compete in a European market facing intense pricing and technology pressure. But Ford's Chinese partnerships have also drawn scrutiny in Washington.
Transportation Secretary Sean Duffy wrote to Farley this month expressing concern that Ford's agreements could leave the company "intertwining its future with Chinese state-backed enterprises," according to Reuters. For now, Chinese automakers face enormous barriers to entering the U.S.
Chinese-made vehicles are subject to tariffs exceeding 100%, while U.S. restrictions on Chinese-developed vehicle software have effectively created another major obstacle to selling connected Chinese cars in the country. Automakers, dealers and suppliers have also pushed lawmakers for longer-lasting restrictions as concerns grow over China's expanding global automotive influence.
