Lawmakers in the European Parliament are advancing legislation that would fundamentally alter how Chinese investors participate in the bloc's strategic industries. The proposed rules would restrict Chinese stakes in joint ventures to a maximum of 49% and mandate technology transfer to European partners. Ford and Geely's existing arrangement at the Valencia facility already satisfies two of these three core requirements.
Meanwhile, the US Department of Transportation has taken a more confrontational stance. Secretary Sean Duffy sent a letter to Ford chief executive Jim Farley on 8 September expressing serious reservations about the automaker's deepening connections with Chinese firms. His concerns specifically targeted three areas: a battery licensing agreement with CATL in Michigan, delays in relocating Lincoln production away from China, and the joint venture with Geely at Ford's Spanish manufacturing facility.
Duffy's message was unambiguous about the stakes involved. "When a company intentionally chooses to deepen operational dependencies on strategic competitors, it fails to act as the reliable partner the American public and this DOT require," the letter stated. Ford dismissed the criticism, characterizing it as "a wrongheaded attempt to capture headlines." The transportation secretary did not claim that Ford had violated any existing regulations.
The Valencia Partnership Under Scrutiny
The Spanish joint venture deserves closer examination. Ford and Geely announced their partnership in July, planning to manufacture four vehicle models together at the Valencia plant beginning in 2028. Under the agreement, Ford would retain a 66% stake while Geely would hold 34%.
This ownership structure aligns with what Brussels is preparing to mandate across the EU. The Industrial Accelerator Act, being shaped by MEPs, would require investors from nations controlling 40% of global market share to enter the bloc through joint ventures with European entities. The legislation would cap their ownership at 49% and obligate them to share technology with European counterparts.
The three rapporteurs driving this effort—Christophe Grudler, Pierre Jouvet, and Anna Cavazzini—are pushing for additional requirements beyond the basic ownership and technology provisions. Their version would mandate that 60% of workers be EU citizens, require companies to reinvest 1% of annual revenue into European research, and stipulate that 30% of component sourcing occur within the bloc. They also want the rules to apply to deals valued at EUR 50M rather than the Commission's proposed EUR 100M threshold.
The Technology Transfer Gap
Europe's experience with previous Chinese partnerships reveals why these new rules are being considered. Research by Transport and Environment uncovered that Chinese-European battery collaborations contained no technology transfer requirements, despite the bloc providing EUR 900M in state support for facilities in Hungary and Poland. An additional EUR 300M went toward a CATL partnership with Stellantis in Spain, yet similar safeguards were absent.
Contrasting Strategies
The American and European approaches to Chinese industrial partnerships reflect fundamentally different philosophies. Washington's strategy centers on severing ties entirely, viewing Chinese involvement as inherently problematic. Brussels, by contrast, seeks to preserve partnerships while restructuring them to ensure European benefit through ownership controls and mandatory knowledge sharing.
Both approaches acknowledge the same underlying reality: Chinese manufacturers have achieved dominance in battery technology. The critical difference lies in their assumptions about whether that expertise can flow in both directions. The US position assumes it cannot; the EU framework assumes it must.
Source: The Next Web
