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In August, Ford<\/a> and General Motors<\/a> made a telling choice concerning the future of affordable electric vehicles (EVs). For batteries to power their lower-cost vehicles, both automakers turned to a Chinese giant, Contemporary Amperex Technology Co., Limited (CATL). Ford will utilize its licensing agreement with CATL to manufacture lithium iron phosphate (LFP) batteries domestically. GM will source<\/a> LFP batteries from CATL for the Chevy Bolt until 2027 \u201cto stay competitive.\u201d<\/p>\n In a year of setbacks for the U.S. EV industry, capped by the loss of the clean vehicle tax credit<\/a>, the decisions make economic and technological sense. CATL supplies nearly 40<\/a> percent of all EV batteries worldwide, making it the clear leader. Tesla, Mercedes-Benz, BMW, Volkswagen, and Toyota all partner with them. Ford and GM know they need to offer lower-cost EV options to the average consumer, so they turned to CATL for LFP batteries\u2014a cheaper alternative to nickel-based lithium-ion cells. Though first developed in the U.S., American manufacturers no longer produce LFP for EVs, with production now dominated by China and CATL.<\/p>\n<\/p><\/div>\n In August, Ford<\/a> and General Motors<\/a> made a telling choice concerning the future of affordable electric vehicles (EVs). For batteries to power their lower-cost vehicles, both automakers turned to a Chinese giant, Contemporary Amperex Technology Co., Limited (CATL). Ford will utilize its licensing agreement with CATL to manufacture lithium iron phosphate (LFP) batteries domestically. GM will source<\/a> LFP batteries from CATL for the Chevy Bolt until 2027 \u201cto stay competitive.\u201d<\/p>\n In a year of setbacks for the U.S. EV industry, capped by the loss of the clean vehicle tax credit<\/a>, the decisions make economic and technological sense. CATL supplies nearly 40<\/a> percent of all EV batteries worldwide, making it the clear leader. Tesla, Mercedes-Benz, BMW, Volkswagen, and Toyota all partner with them. Ford and GM know they need to offer lower-cost EV options to the average consumer, so they turned to CATL for LFP batteries\u2014a cheaper alternative to nickel-based lithium-ion cells. Though first developed in the U.S., American manufacturers no longer produce LFP for EVs, with production now dominated by China and CATL.<\/p>\n Unfortunately, the moves do not fit with American politicians\u2019 geopolitical vision. Then-Sen. Marco Rubio was one of many critics<\/a> of Ford\u2019s initial partnership with CATL. Michigan Republican Rep. John Moolenaar said<\/a> GM\u2019s decision was \u201cdisappointing \u2026 to the American people.\u201d The Washington consensus is that American companies should not work with Chinese companies, and policymakers continue to make it harder to do so.<\/p>\n But Ford and GM\u2019s moves underscore a blunt reality: If America\u2019s automakers want to compete against Chinese automakers in the global market, they may need to partner with Chinese battery supply chain companies. The American auto industry is facing an existential threat from Chinese automakers. And the future of the industry depends on securing the best batteries, wherever they come from.<\/p>\n The transition to<\/span> EVs isn\u2019t a question of if, but when. Domestic headlines hide the fact that sales rose<\/a> by 26 percent globally year-on-year in the first nine months of 2025. EVs now deliver competitive range and superior tech features with costs approaching parity with gas-powered cars.<\/p>\n The United States must do everything possible to ensure its automakers can lead, not lag, in this inevitable transformation. They are currently falling far behind. Most Americans\u2014and many representatives in Washington\u2014don\u2019t see that Chinese automakers are rapidly taking over the world with cheaper, high-quality EVs.<\/p>\n The U.S. exported<\/a> 1.46 million total vehicles in 2024. China shipped<\/a> nearly 1.65 million electric vehicles\u2014led by BYD, the world\u2019s top EV maker. Six of the 10 bestselling EV brands last year were<\/a> Chinese. Xiaomi, described as China\u2019s Apple, did not produce vehicles until December 2023 yet Ford CEO Jim Farley admitted<\/a> he didn\u2019t want to give up the Xiaomi SU7 after driving one.<\/p>\n It\u2019s understandable Americans don\u2019t see how Chinese automakers are reshaping the global landscape. The vehicles are not on American roads and won\u2019t be in their neighborhood any time soon. Tariffs, safety regulations, and upcoming connected vehicle restrictions make it prohibitive for American consumers to even see Chinese cars on their street. They must rely on YouTube videos<\/a> or travel abroad to grasp the threat from Chinese automakers.<\/p>\n But the CEOs running the industry understand the threat. Speaking about EVs and competition from China, Hakan Samuelsson, CEO of Volvo, warned<\/a>, \u201cSome companies will adapt to new circumstances and survive. Others will not.\u201d<\/p>\n Rivian\u2019s CEO, RJ Scaringe, said<\/a> manufacturers need to focus on the fact that Chinese \u201ccars are actually better.\u201d And Farley called<\/a> Chinese vehicles an \u201cexistential threat.\u201d<\/p>\n An existential threat to Ford and American automakers is an existential threat to countless communities across the country. We have true national champions in the auto sector such as Ford, GM, and Tesla. These brands embody what remains of America\u2019s manufacturing strength, sustaining jobs and communities across the Midwest and South.<\/p>\n Their success is paramount to the long-term success of manufacturing in the United States. The industry employs<\/a> more than 4 million Americans nationwide and is vital to the character of the country. At a time when America continues to lose manufacturing jobs, Washington should do everything possible to keep the auto industry globally competitive.<\/p>\n We do not have national champions in the battery industry. Instead, U.S. automakers producing EVs domestically rely on Japanese and Korean companies\u2014Panasonic, Samsung, LG Energy, and SK On. They are exceptional companies, producing cutting-edge technologies, and they are investing in America. The recent immigration raid at the LG\/Hyundai plant in Georgia was abhorrent. Japan and South Korea are vital partners whose expertise can strengthen U.S. supply chains, and we must ensure they feel confident investing here.<\/p>\n Washington needs to ensure Ford and the other producers can partner with whomever they believe is best for their long-term success. If that\u2019s a Japanese or Korean firm, so be it. Farley warned Ford is<\/a> \u201cin a global competition with China. \u2026 And if we lose this we do not have a future at Ford.\u201d This global competition with Chinese electric vehicles is what drove Farley and Ford to partner with CATL.<\/p>\n U.S. policy should aim to build a competitive and dynamic battery industry where supply chain firms compete, and automakers come out ahead.<\/p>\n Allowing automakers and other companies in the battery supply chain to partner with Chinese battery supply chain companies is the best way to support American car companies, enhance domestic manufacturing, and build a supply chain. High political walls are only hurting our own economy.<\/p>\n Because it is not just CATL. Chinese companies are leaders in production, technology, and know-how. No wonder six of the 10 largest EV battery producers are Chinese. And despite a call to \u201cleapfrog\u201d or focus on next-generation batteries, Chinese producers are<\/a> the leaders in sodium-ion and solid-state battery production, too.<\/p>\n Even with China\u2019s new export licensing requirements<\/a> for next-generation battery technology, the U.S. should not shut the door on Chinese producers. Those restrictions target advanced, next-generation chemistries, not the chemistries that power EVs today or in the immediate future. For example, CATL\u2019s state-of-the-art batteries fall well below the energy density limits outlined in the restrictions. The restrictions \u00a0do not hinder the partnerships that matter most right now.<\/p>\n Some believe the United States should only support local companies trying to break into battery production, including companies with innovative battery chemistries. While America\u2019s can-do spirit is admirable, we are not going to catch up to China and its 10-year head start. And worse off, our automakers could be left behind if we think we can. Surging demand and cutthroat competition in China\u2019s EV market mean that it is most likely going to be CATL, with its 20,000<\/a>-plus R&D staff, or a rival, that develops the next innovation.<\/p>\n Bloomberg<\/a> recently highlighted the trip of eight climate venture capitalists that toured China to see firsthand the progress in clean tech in China. The trip left one investor saying, \u201cWhen it comes to battery manufacturing in the West, China\u2019s dominance means it\u2019s now \u2018game over.\u2019\u201d And the recent string of canceled battery factories in the United States bears this out. FREYR<\/a>, KORE Power<\/a>, AESC<\/a>, and Natron Energy<\/a> have all canceled or halted construction on battery facilities in the United States this year. And Gotion<\/a>, the one Chinese battery producer looking to expand to the United States, will not move forward with their facility in Michigan after years of political issues which ended with the state government withdrawing financial support.<\/p>\n Events in Europe over the last month show the benefits of a different path forward. The U.S. battery landscape is more advanced than Europe\u2019s, but on the continent, they have not limited Chinese battery supply chain investment. Despite their own real challenges<\/a> in building a supply chain, partnering with Chinese firms is proving to be beneficial.<\/p>\n The result? Well, BMW announced its new iX3 EV to glowing reviews<\/a>, thanks in large part to the new battery design produced through a partnership<\/a> with CATL. The vehicle will have up to 500 miles of range and get 200 miles of charge in 10 minutes.<\/p>\n Then CATL unveiled<\/a> long-range and fast-charging batteries for the European market. The batteries will be produced in Europe for European automakers. CATL has invested $12.9 billion in Europe through a factory in Germany and upcoming factories in Hungary and Spain. Now Europe needs to guarantee these partnerships include technology transfers and the upskilling of the local workforce.<\/p>\n
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