UPDATE: Ford CEO Jim Farley has issued a stark warning about the dominance of Chinese automakers in the electric vehicle (EV) sector, labeling them the “700-pound gorilla” of the industry. Farley made these comments during an episode of The Verge’s “Decoder” podcast aired on October 9, 2023, emphasizing that the competition with Tesla, GM, and Ford is virtually nonexistent in comparison to China’s rapidly advancing EV landscape.
Farley highlighted the significant advantages enjoyed by Chinese manufacturers, primarily due to substantial government support and innovative technologies. “The competitive reality is that the Chinese are completely dominating the EV landscape globally and more and more outside of China,” he stated, reinforcing concerns that American companies are falling behind.
The CEO elaborated on the critical factors contributing to China’s success, noting, “China’s successful for good reason. It has great innovation at a very low cost.” He cited the proliferation of hundreds of local companies, including prominent players like BYD, Geely, and Xiaomi, many backed by generous local subsidies. Farley emphasized that these factors create an uneven playing field for American automakers.
During the podcast, Farley reiterated sentiments he shared earlier this year, describing China’s advancements in the EV sector as “the most humbling thing” he has ever witnessed. He specifically pointed out the superior in-vehicle technology provided by companies such as Huawei and Xiaomi, stating, “You get in, you don’t have to pair your phone. Automatically, your whole digital life is mirrored in the car.”
The implications of China’s lead in EV technology extend beyond just the automotive industry. Farley warned, “We are in a global competition with China, and it’s not just EVs. If we lose this, we do not have a future Ford.” His comments reflect a growing concern that American automakers may struggle to compete as China’s EV market continues to expand.
Farley also praised the Xiaomi’s maiden electric vehicle, the SU7, stating, “I don’t want to give it up,” after having driven it for six months. This endorsement underscores the competitive threat that Chinese brands pose to established American manufacturers.
The gravity of the situation is further emphasized by research from the Centre for Strategic & International Studies, revealing that the Chinese government has invested at least $230 billion to support local EV makers between 2009 and 2023. Rivian CEO RJ Scaringe echoed Farley’s concerns, stating on the “Everything Electric” podcast that there are no “secret magic” factors driving China’s impressive cost structures, but rather the compounded benefits of lower capital costs.
As the EV market evolves rapidly, the stakes are higher than ever for Ford and its competitors. The pressure is mounting for American automakers to innovate and adapt swiftly to keep pace with their Chinese counterparts. What happens next is critical for the future of the automotive industry, and all eyes will be on how Ford and others respond to this urgent challenge.
