U.S. Lawmakers Demand Review Of Ford-CATL Licensing Deal Amid China Ties Concerns

In a move that raises concerns about China ties, U.S. lawmakers are calling for a thorough review of the licensing agreement between Ford Motor and China-based CATL. The deal would enable Ford to manufacture battery cells developed by CATL at its planned $3.5 billion plant in Michigan, which is set to open in 2026 and employ around 2,500 people.

In a letter addressed to Ford CEO Jim Farley, chairs of the House Select Committee on the Chinese Communist Party or CCP and the House Ways and Means Committee have demanded transparency. They seek a copy of the licensing agreement, all communications between Ford and CATL, as well as any discussions with the Biden administration regarding potential tax credits associated with the deal.

The lawmakers’ inquiry also delves into the number of American workers versus Chinese employees at the Michigan plant, questioning whether the agreement qualifies for federal tax funding. Furthermore, they raise concerns about CATL’s potential links to forced labor practices and whether the deal truly reduces the country’s dependency on China for electric vehicle parts and materials.

Ford’s Michigan plant is designed to produce lithium iron phosphate batteries or LFP instead of the costlier nickel cobalt manganese batteries currently used by the automaker. These new batteries are expected to enhance EV production and profit margins.

While Ford has defended the deal, the lawmakers highlight that several hundred of the proposed 2,500 jobs will be filled by CATL employees from China until the licensing agreement expires in 2038, raising concerns about the long-term reliance on Chinese workers.

The tie-up between Ford and CATL has faced previous criticism from some Republican lawmakers, including Sen. Marco Rubio and Rep. Jason Smith. Rep. Mike Gallagher, who chairs the House Select Committee on the CCP, has spearheaded investigations into U.S.-China business interests and has raised questions about American firms partnering with Chinese companies amid allegations of human rights abuses and military campaigns by the Chinese Communist Party.

The lawmakers have also expressed concerns about CATL’s connections to Xinjiang Lithium and its alleged involvement in state-sponsored labor transfer programs in the Xinjiang region, where laborers are subjected to constant surveillance.

Despite Ford’s assurances that the battery cells produced at the plant will qualify for federal incentives under the Biden administration’s Inflation Reduction Act, the calls for review highlight the growing scrutiny surrounding the automaker’s partnership with CATL and the broader implications of doing business with Chinese companies amid geopolitical tensions.

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