Episode #1446: Ford CEO Jim Farley pushes back on Transportation Secretary Sean Duffy’s claims about the automaker’s ties to Chinese companies. Plus, dealer sentiment slips despite steady sales as affordability, interest rates and demand for cheaper vehicles weigh on the retail outlook.

Show Notes with links:

• Ford CEO Jim Farley is pushing back hard on Transportation Secretary Sean Duffy’s claims that Ford is becoming too reliant on Chinese automotive companies. The unusually public dispute centers on Ford’s CATL battery technology, overseas partnerships, and what Farley says are basic mischaracterizations of the company’s strategy.

  • Duffy accused Ford of “actively intertwining its future with Chinese state-backed enterprises” and said American companies should “out-innovate competitors” rather than rely on them.

  • Farley said Ford’s Marshall, Mich., battery plant is owned and operated by Ford despite licensing technology from CATL; the White House recently touted the project, while Commerce Secretary Howard Lutnick has praised Ford’s domestic investments.

  • Ford is also working with Geely overseas: its Spanish plant will build Geely vehicles for Europe, and the companies will co-develop an SUV for overseas markets. Farley said those vehicles aren’t intended for the U.S.

  • Duffy said Farley previously proposed a framework for U.S. joint ventures with Chinese automakers. Farley flatly denied it: “N-O, period,” adding, “Ford does not propose any framework described in the letter.”

  • Farley on the broader dispute: “These are basic misunderstandings, mistruths, whatever words you want to use, that could be cleared up in a simple five-minute call.”

• Dealer sentiment slipped in the third quarter even as U.S. vehicle sales showed some momentum. Cox Automotive says affordability pressure, lower-margin vehicle demand and broader economic uncertainty may help explain why dealers feel worse than the sales numbers suggest.

  • Franchised dealers rated the current market at 49, down from 53 last quarter and 53 a year ago; their three-month outlook fell to 51 from 57 in Q2.

  • The economy remained dealers’ biggest challenge at 54%, followed by interest rates at 39%. Consumer confidence was cited by 31%.

  • The new-vehicle sales environment scored a neutral 50, down from 53 last quarter and 58 a year ago, when shoppers were rushing to buy ahead of expiring EV tax credits.

  • Cox analysts said customers may be gravitating toward cheaper, lower-margin vehicles or models dealers struggle to source. One Toyota dealer said, “I am stuck with expensive new vehicles, whereas the cheaper, lower-trim models move much faster.”

  • Cox’s Mark Strand noted the disconnect between sentiment and sales: “They always feel a little bit worse post-spring bounce. But the market was actually picking up a little bit of momentum in Q3.”