Reports say Ford is exploring the formation of a joint venture with Xiaomi to manufacture electric vehicles in the United States, but the former denies it.

IT Home February 1 News, The Financial Times reported that, according to four informed sources, Ford Motor has been in negotiations with Xiaomi regarding collaboration, which could pave the way for Chinese automakers to enter the US market.

Sources said that although the discussions are still in the preliminary stage, Ford has explored establishing a joint venture with Xiaomi to produce electric vehicles in the United States.

The report also states that Ford has communicated with BYD (002594) and other Chinese automakers about potential cooperation in the US market.

Representative John Moolenaar, Republican Chairman of the House Select Committee on China, stated that Ford’s move would “betray the United States and its allies, and further make the US dependent on China.”

Ford responded: “This report is completely false and unfounded.”

IT Home notes that Ford CEO Jim Farley has publicly praised Chinese electric vehicles multiple times, and he personally imported a Xiaomi SU7 model for use. Xiaomi, which started in consumer electronics, shocked the global automotive industry in 2024 with its stunning debut of electric vehicles.

Farley warned last year that Chinese competitors pose a “survival threat” to Western automakers, with China’s domestic capacity alone enough to “bankrupt all of us.” He also previously stated that Chinese companies “will definitely enter” the US market.

Last month, Farley hosted US President Donald Trump at the Ford truck plant in Dearborn, a suburb of Detroit. During the visit, Trump told business leaders that if Chinese companies “want to come build factories, hire you, your friends, and neighbors, that would be great. I welcome it.”

Ford has reached an licensing agreement with CATL (300750) to use this battery giant’s technology to produce battery cells in the US. The US Department of Defense has listed CATL as a so-called entity related to the Chinese military, which CATL denies. The House Select Committee on China has also expressed concern about this agreement multiple times.

In 2024, the Biden administration imposed a 100% tariff on imported Chinese cars, banning Chinese vehicles from entering the US market. In addition to maintaining these tariffs, Trump extended restrictions on Chinese software and hardware used in connected vehicles during Biden’s term.

Trump is preparing to visit China in April, a trip that may include trade agreement discussions. Some experts believe Trump hopes to attract Chinese investment in the US, but officials with a more hardline stance under his leadership are unlikely to welcome Chinese automakers entering the US market.

In 2021, during Trump’s first term, he listed Xiaomi among the companies related to the Chinese military on the US Department of Defense’s so-called Chinese military connection list. Xiaomi subsequently filed a lawsuit, and the Biden administration removed it from the list later that year.

BYD and other Chinese automakers have quickly penetrated markets in Europe, Southeast Asia, and Latin America with affordable electric and hybrid vehicles, and these products are increasingly being localized.

However, Trump’s recent statements in Detroit, along with another Chinese company, Geely, hinting at entering the US market within the next three years, have raised the possibility of Chinese manufacturers landing in the US.

Ash Sakhil, Global Communications Director of Geely Auto, recently told Autoline Network, “The key question we face is when and how to enter the US market.” Geely also owns Volvo Cars and the Polestar brand.

Sakhil declined to comment further to the Financial Times but said the group is still “closely watching” potential opportunities in North America.

Ede Jin, President of consulting firm AutoPacific, pointed out that Ford is particularly vulnerable to the impact of low-cost Chinese electric vehicles entering the US market because the company had previously anticipated an accelerated electric vehicle transition, cutting several key models in the mass market segment, and this transition has now stalled. The models cut include the compact crossover Ford Escape and the mid-size Ford Edge SUV, which have been discontinued. Ford plans to launch a new low-cost electric vehicle platform no earlier than 2027, with no replacement models available before then.