In This Article:
(Bloomberg) -- China will scrutinize Ford Motor Co.’s recent agreement with Contemporary Amperex Technology Co. Ltd. to ensure the Chinese battery giant’s core technology isn’t handed over to the US carmaker, another sign of geopolitical tensions between the two powers complicating business deals.
Most Read from Bloomberg
-
McKinsey Plans to Eliminate About 2,000 Jobs in One of Its Biggest Rounds of Cuts
-
China Urges State Firms to Drop Big Four Auditors on Data Risk
-
How Much Do Investors Say They Need to Retire? At Least $3 Million
-
Russia’s War on Ukraine, China’s Rise Expose US Military Failings
-
World’s Largest Four-Day Work Week Trial Finds Few Are Going Back
Ford said Monday the tie-up would see CATL’s lithium iron phosphate, or LFP, battery technology licensed for use in a new $3.5 billion electric-vehicle battery plant that Ford will run and control in southwest Michigan.
While Beijing is pleased the deal showcases China’s prowess in the EV battery space, officials are concerned that competitive aspects of CATL’s technology could be given to or accessed by the American automaker, people familiar with the matter said, asking not to be named discussing Chinese government deliberations.
Senior Chinese leaders asked for the extra scrutiny, given the sensitivity of the deal and the current state of tensions between Washington and Beijing, the people said. The findings will be presented to the top leadership, but the format and timeframe for that process isn’t yet known, they added.
One of the people said it’s unlikely to result in the tie-up being blocked. Shares in CATL dropped as much as 3.5% Friday morning, the biggest intraday plunge since late December.
The plan, which has already been examined by lower-level officials in China, is getting this extra layer of national-level scrutiny because of the significance of the deal and its implications for US-China relations, the people said.
Representatives from China’s Ministry of Commerce, the National Development and Reform Commission and the Ministry of Industry and Information Technology didn’t immediately respond to requests for comment Thursday. Representatives for Ningde, Fujian-based CATL also didn’t reply to a request for comment.
“We are not aware of any outreach by Chinese government officials on this matter,” Ford said in an emailed statement.
Control of key technologies has become a significant front in the standoff between the world’s two biggest economies, with the US moving aggressively to restrict China’s access to chipmaking and other strategic capabilities. President Joe Biden put China’s domination of EV batteries in his sights with his signature climate bill — the Inflation Reduction Act — which means electric cars made with a certain amount of China-linked materials miss out on lucrative consumer tax credits.