The Connectivity Risk Your Chinese Partner Didn't Mention

Last September, at a Dutch battery conference, I asked a panel of speakers — all of whom were working with China one way or another — whether they had any contingency plans for a blockade or a Taiwan invasion. The room went quiet in the way rooms go quiet when someone says something everyone has been avoiding. Nobody had a plan. That silence is what this post is about.

The Partnership Everyone Is Chasing

After the failures of Europe's local champions — Freyr, Britishvolt, Northvolt, ACC and Verkor still struggling to complete their gigafactories — the consensus has shifted. The way forward, many now believe, is a Chinese partner. The PowerCo-CATL deal, the InoBat-Gotion project, and dozens of quieter startup tie-ups all reflect the same logic: if you can't beat them, build with them.

This logic is not unreasonable. But it carries two problems that rarely get discussed with

the seriousness they deserve.

Problem One: The Technology Transfer Isn't Happening

The stated rationale for most of these partnerships is access to Chinese manufacturing knowledge and process technology. In practice, very little of it appears to cross the table. A T&E analysis of several key European partnerships found no meaningful technology transfer taking place on the ground. Europeans — from startups to Volkswagen — seem largely content to let Chinese partners run their operations, which raises an uncomfortable question: if the knowledge stays in Chinese hands, what exactly are you building toward? For a FOAK project, this matters acutely. Your scale-up roadmap assumes you are accumulating capability. If the capability remains with your partner, you are building dependency, not competence.

Problem Two: Your Equipment Has a Back Door

This is the one that keeps me up at night on behalf of my clients.

A recent FT piece on US restrictions against Chinese EVs highlighted something that deserves wider attention in the European battery space. The restrictions are not primarily about tariffs. They are about connectivity. You can use Chinese glass and plastics. You cannot use Chinese communication chips — because a modern EV carries dozens of cameras (including driver-facing ones), radars, laser sensors, and substantial onboard processing power. Around 90% of data from Chinese EVs is routed to servers in China. Battery management systems can be accessed over the air.

Screen shot from a video game Cyberpunk 2077, showing hacking options for a car. Not so science fiction anymore

The implications for national security are serious enough that Poland is moving to ban Chinese-made vehicles inside military bases, and British officials have been advised not to hold sensitive conversations in cars with Chinese electronics. The fact that China was the first country to restrict foreign vehicles' data transfers lends considerable weight to these moves — it suggests the risk is well understood in Beijing.

Now bring this back to your FOAK facility. The same connectivity architecture that creates a surveillance risk in consumer EVs exists in the Chinese-made process equipment sitting in your plant. CNC machines, battery formation systems, BMS diagnostic tools — many carry OTA update capability. That access doesn't disappear because you signed an equipment supply contract.

The Question Nobody In European Battery Space Is Asking

At that Dutch conference, my question was met with polite deflection. People acknowledged the theoretical risk, then moved on. The underlying assumption seemed to be that geopolitical disruption was either too remote to plan for or too large to do anything about.

Neither is true. There are concrete steps that FOAK founders and their investors can take: auditing the OTA exposure of installed equipment, building contractual and technical firewalls into partnership agreements, developing supplier alternatives for the most critical systems, and defining what a production continuity plan would look like if Chinese supply or remote access were suddenly interrupted.

None of this requires abandoning Chinese partnerships. It requires treating them with the same rigour you would apply to any other material project risk.

The Real Question for Your Board

If a board member asked you today — "How do we manage the security and continuity risk in our Chinese partnerships?" — what would your answer be?

If you don't have one, that's worth fixing before the question becomes urgent. Supply chain sovereignty and geopolitical risk are areas I help FOAK founders stress-test during scale-up planning. If this is a live issue for your project, let's talk.