Collaboration with Chinese suppliers is ‘the only way international carmakers can compete with Chinese carmakers’, Morgan Stanley analyst says. A Ford Motor electric vehicle (EV) battery plant in the U.S. state of Michigan, edging closer to inauguration, has shed light on global marques’ reliance on Chinese technologies to accelerate their EV transition. The USD3 billion facility, with a capacity of more than 400,000 EVs a year, has heightened expectations for similar deals that would allow Chinese technologies to play a vital role in reviving America’s once-booming manufacturing industries.
Ford and China’s EV battery maker Contemporary Amperex Technology (CATL) announced the BlueOval Battery Park Michigan in 2023, only to face strong opposition from local residents and lawmakers due to frayed U.S.-China relations. CATL, as a technology and service provider to the project, is only involved in manufacturing operations, with Ford fully owning the facility. “The only way international carmakers can compete with the Chinese carmakers is to collaborate with the Chinese suppliers,” said Tim Hsiao, Director of the Greater China Auto and Shared Mobility Research Team at Morgan Stanley. The U.S. bank predicted that international automotive groups would act to bring Chinese-developed technology to markets outside China as soon as possible, because their Chinese rivals were planning aggressive overseas expansion to combat weakening demand at home.
Chinese car makers and automotive suppliers were seen as the vanguard of EV technology, buoyed by government support and consumer appetite for innovation, according to analysts. Chinese-developed EVs, many with preliminary self-driving systems, digital cockpits and sometimes even on-board fridges, have eclipsed international petrol-car brands in mainland China, the world’s largest automotive and EV market. Analysts said the collaboration between Ford and CATL was the latest landmark deal to underscore the trend of foreign carmakers adopting Chinese manufacturing expertise before copying it to other markets despite geopolitical risks.
CATL reiterated that it would only provide Ford with “services and knowledge” for the Michigan plant, which was expected to start production within months. “As agreed by both parties, CATL licenses its battery technology to Ford. U.S. automakers need the best lithium iron phosphate technology to compete globally.”
“EVs provide a typical example of Chinese firms’ go-global drive because the carmakers have huge potential to expand their global footprints with increased market share,” said David Zhang, General Secretary of the Shanghai-based International Intelligent Vehicle Engineering Association. “It’s inevitable that Chinese carmakers and auto part suppliers will become powerful international players in the coming years.” In March, Volkswagen Group began mass-producing a model featuring Chinese EV maker Xpeng’s autonomous driver-assistance systems, which are currently available only in mainland China. Other established brands from Audi to Hyundai’s Ioniq are using systems developed by Chinese self-driving technology firm Momenta, the South China Morning Post reports.
