When Ford CEO Jim Farley wanted to test the competition, he didn’t look. Tesla’s but in China. It is now looking at ways the legacy automaker can imitate its Chinese counterparts.
Farley spent six months driving the car in 2024. Xiaomi Speed Ultra 7 is the first electric vehicle produced by the Chinese technology company, mostly known for its smartphones. When the six months were up, Farley said: “I don’t want to give up.”
In an interview on Quick Response podcast On Friday, Farley explained why he chose to use the Xiaomi SU7 instead of a vehicle from an American company like Tesla.
“Nothing against Tesla. They do a great job, but you know, they don’t really have an updated vehicle,” Farley told host Bob Safian.
Tesla has made some redesigns and updates to its vehicles to meet increasing Chinese competition. The company’s 2026 version of the Model Y featured a futuristic-looking exterior and an upgraded interior that included a redesigned dashboard. The 2023 version of Tesla’s Model 3 also received an overhaul, adding ventilated front seats and ambient lighting. Some critics argued that these updates were incremental compared to improvements made by Chinese car companies.
Tesla did not immediately respond Luck‘s request for comment.
Farley argued that if Ford wants to be the best in the world, the company should focus not only on Xiaomi but also on competition abroad. Chinese EV leader BYDFord’s CEO called it “the best in the industry” when it comes to cost, supply chain, manufacturing and intellectual property.
Chinese electric vehicles are not sold in the United States due to a 100% increased tariff imposed by President Joe Biden and kept in place by President Donald Trump. Still, Chinese vehicles, particularly BYD’s low-cost electric vehicle lineup, are gaining ground in other markets as well. Despite the customs duty of up to 38.1 percent that the EU imposes on Chinese vehicles in 2024, BYD It almost tripled its European sales at the beginning of the year; new BYD registrations jumped to 18,242 in January from 6,884 in the same month the previous year. Wall Street Magazine reported.
BYD was founded in 1995 as a battery manufacturer, but moved into automobile production in 2003 when founder Wang Chuanfu purchased struggling state-owned automaker Xi’an Qinchuan Automobile. BYD later increased EV production by focusing on sales in China; China has quickly become the world’s largest EV market, in part because the government offers subsidies to both consumers who buy EVs and the companies that produce them. It also created charging infrastructure in the country and set aggressive fuel economy standards for gas-powered vehicles.
BYD became the first automobile manufacturer in the world to stop producing motor cars in 2022. only with gasinstead the focus is on electric vehicles and hybrids. company until 2025 It surpassed Tesla in terms of revenue and there was Dethroned Elon Musk’s company As the world’s largest EV manufacturer. Tesla still has a much higher valuation than BYD at $1.22 trillion $138 billion.
Farley said during the interview that he wants Ford to emulate BYD and do what Americans excel at: “Use innovation to compete with the best in the world.”
Chinese EVs are quite cheap but also advanced. Critics argued: Around 231 billion dollars in subsidies The Chinese government has allowed the domestic EV industry to allow players like BYD to sell their cars below cost to outperform other industry players.
Still, even Tesla CEO Elon Musk expects Chinese industry players in 2024 to “The most competitive automobile companies in the world.”
Farley said Ford should take a page from BYD and produce cars that will meet the needs of the “next cycle” of American car buyers who want a wide range of different body styles, but want $30,000 instead of $50,000.
“If we’re smart, we’ll take on BYD’s cost competitiveness and then compete with that platform in parts of the market where we know our customers really well,” he said.
Ford’s cheapest vehicle, the hybrid Maverick XL pickup, about $28,000Tesla’s cheapest vehicle is the Model 3 sedan Just under $37,000. Both entry-level vehicles are significantly more expensive than BYD’s compact EV hatchback, the Seagull. It goes for $9,500 but only in China. It is sold at higher prices abroad, including Latin America and Europe.
Ford is currently reinventing itself to compete and $19.5 billion feeIt’s one of the biggest blows a company has ever taken, in part because it revamped its EV strategy in December amid weaker-than-expected demand after Trump Terminated EV loan.
The company is now focusing on hybrids and extended-range electric vehicles (EREVs) has a small internal combustion engine that is used primarily as a generator to charge the car’s electric battery and offer a longer driving range. Ford’s F-150 Lightning, once heralded as the future of the EV business Renewed as EREV.
However, electric vehicles are not being completely avoided. Ford still plans to produce a $30,000 electric pickup truck by 2027 that would be the first in the new low-cost EV class. Ford F-150 Lightning for comparison, Starting at $54,780.
Farley has been one of the loudest voices urging US automakers to take notes from the Chinese, and has previously said the company is eyeing Chinese automakers: Not GM or Toyotaas their biggest rivals.
That’s why Ford is changing the way it does business to mimic the competition in China as it tries to become a better company, according to Farley.
“This is the gift China has given us,” he said, “to be too fearful and respectful of their advances to organically reach out by phone.”
This story first appeared on: Fortune.com
