Ford's potential deal with BYD signals shift towards hybrid focus amid geopolitical concerns

Ford is reportedly in negotiations with China’s BYD to source batteries for hybrids, marking a strategic pivot away from pure electric vehicles and highlighting ongoing geopolitical tensions in supply chains.

Ford is in talks with China’s BYD about buying batteries for some hybrid vehicles, a move that would bolster the automaker’s shift away from a pure-electric focus and toward a broader mix of hybrids, plug-in hybrids and conventional petrol models.

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rding to an exclusive report by The Wall Street Journal, the discussions are non‑binding and include proposals for Ford to import BYD batteries for use in Ford factories outside the United States. The talks reflect a growing need for batteries optimised for hybrid powertrains as Ford scales back its EV ambitions and expands its hybrid lineup. The company announced plans in December to take a roughly $19.5 billion charge tied to its EV business as it reprioritises investments, a move reported by Forbes and InvestingLive that underscores the financial pressure behind the strategic pivot.

The potential deal would pair Ford with the world’s largest Chinese automaker. BYD began as a battery maker and has extensive experience producing cells for electric and hybrid vehicles; it currently manufactures most batteries in China but is expanding capacity overseas into regions including Southeast Asia, Europe and Brazil. Industry arrangements already link BYD cells into Western supply chains: BorgWarner confirmed an agreement with FinDreams Battery, a BYD unit, to supply blade LFP cells for battery packs in Europe and the Americas, a development reported by CarNewsChina.

Any arrangement with BYD is likely to draw political scrutiny. After the Journal’s account, Peter Navarro, an adviser to President Donald Trump, publicly questioned whether such sourcing would increase US reliance on Chinese supply chains. Republican lawmakers have previously criticised other China-linked battery projects: Ford’s planned cell plant in Marshall, Michigan, which will use licensed technology from Chinese firm CATL, has faced congressional attention but remains slated to begin operations this year, according to the original report.

The talks come amid a wider retreat from ambitious EV programmes at Ford. The company has said it will stop producing the all-electric version of its F-150 pickup and focus on extended‑range hybrid variants, and has scaled back plans such as a three‑row electric SUV, as reported by Euronews and The Washington Post. The trimming of EV capital intensity , Reuters and The Washington Post noted Ford reduced the share of capex devoted to pure EVs from about 40% to roughly 30% , and the cancellation of a $6.5 billion battery deal with LG Energy Solution, disclosed in filings and reported by Carscoops, illustrate the depth of the strategic reset.

Ford executives have highlighted hybrids as a near‑term growth area: company figures showed hybrid sales rising in the fourth quarter to around 55,000 vehicles, and models such as the F‑150 hybrid have been singled out as strong sellers. According to Forbes, Ford now expects hybrids, plug‑in hybrids and battery electric vehicles to make up roughly half of global sales by 2030 while continuing to offer gas‑powered and hybrid variants.

If completed, a BYD supply agreement would be both pragmatic and politically fraught: pragmatic because it would secure hybrid‑specific battery supply at a time when Ford is retrenching on costly EV programmes; fraught because BYD’s Chinese ownership and growing global footprint have unsettled parts of the US auto industry and drawn regulatory and political attention. Company sources and the administration have not confirmed terms of any deal, and it remains possible that negotiations will not culminate in an agreement.

Industry data and recent supplier deals suggest western automakers are pursuing multiple routes to secure cells for hybrids and low‑range electrified powertrains, from licensing technology and building local plants to sourcing cells from established overseas manufacturers. The outcome of Ford’s talks with BYD will therefore be watched closely as a test case in how US carmakers balance cost, capacity and geopolitical risk while reshaping product lineups away from an earlier all‑electric emphasis.

Source: Noah Wire Services