Ford’s CEO Looks to Chinese EVs for Inspiration Over Tesla
In an unconventional approach to understanding competition, Ford CEO Jim Farley turned his gaze towards China instead of focusing on Tesla. This strategic move has led him to explore how Ford can mirror the success of Chinese electric vehicle manufacturers.
Farley spent six months in 2024 driving the Xiaomi Speed Ultra 7, the first electric vehicle from the Chinese tech company renowned for its smartphones. Reflecting on his experience, Farley remarked, “I don’t want to give it up.”
During a Rapid Response podcast interview, Farley explained his choice of driving a Xiaomi vehicle over a Tesla. “Nothing against Tesla. They’ve been doing great, but you know, they really don’t have an updated vehicle,” Farley told host Bob Safian.
While Tesla has introduced redesigns to counter rising Chinese competition, with updates to the Model Y and Model 3, some critics consider these changes to be minor compared to the advancements made by Chinese automakers.
Seeking to be a global leader, Farley champions Ford’s need to compete internationally, highlighting Chinese EV leader BYD as a model for excellence in manufacturing and supply chain management. BYD’s impact is evident as it has significantly boosted its presence in Europe, with new car registrations tripling despite a hefty EU tariff.
BYD, originally a battery manufacturer, entered the automotive industry in 2003 and has since prioritized the Chinese market, which benefited from government subsidies and infrastructure support. In 2022, BYD became the first to cease production of gas-only vehicles, focusing on EVs and hybrids, and has since overtaken Tesla in revenue by 2025.
Farley advocates for Ford to draw inspiration from BYD’s cost-effective approach and innovate to meet American consumer demands for affordable vehicles. As Ford revamps its strategy, it aims to introduce a $30,000 electric pickup by 2027, positioning it to compete in a market with diverse, affordable options.
The company is also adjusting its focus towards hybrids and extended-range electric vehicles (EREVs), amidst the backdrop of changing tax credits and market demands. This shift includes retooling the F-150 Lightning as an EREV.
Ford’s strategic pivot aims at learning from Chinese automakers, with Farley emphasizing, “That is the gift that China gave us, to be fearful and respectful enough of their progress that we could not organically just phone it in.”
Original Story at fortune.com