Ford Motor, one of the largest automakers in the US, is facing a tough challenge from Chinese electric vehicle (EV) makers, who have a significant edge in battery technology and market share. Ford CEO Jim Farley recently said that Chinese companies such as Warren Buffett-backed BYD are ahead of the large US automakers and startups on EVs, and that Ford sees them as the main competitor, not GM or Toyota.
Farley cited BYD, Geely, Great Wall, Changan and SAIC as the “winners” among Chinese EV makers, and said that Ford needs to lower its costs by building a battery plant in Michigan using CATL technology. CATL is a Chinese battery giant that supplies Tesla and other global automakers. Farley also warned that if the US politics interferes with the battery deal, the customer will suffer.
“We have a decision to make here in the US,” Farley said. “If battery localizing their technology in the US gets caught up in politics – you know the customer is really going to get screwed.”
Ford’s strategy in China is different from its rivals like Volkswagen, which has invested heavily in the region and partnered with local EV makers. Ford plans to use China as a “listening post” to better understand EV battery tech and focus on its distinctive branding. However, this approach may not be enough to compete with the Chinese EV makers, who have government backing and dominate the domestic market.
China is the world’s largest auto market and has some of the best battery technology. It also has ambitious goals to reduce carbon emissions and promote green vehicles. Chinese EV makers have grown their sales rapidly in recent years, both in China and abroad. BYD, for example, has grown its sales in China from 445,000 units in 2015 to nearly two million last year, making it one of the top five automakers by sales in China.
Ford is not the only US automaker that acknowledges China’s EV dominance. GM CEO Mary Barra recently visited China and met with local partners and officials. Tesla CEO Elon Musk also praised Chinese automakers earlier this year, saying: “They work the hardest and they work the smartest. … And so we guess, there is probably some company out of China as the most likely to be second to Tesla.”
Ford is trying to catch up with its rivals in the EV market by launching new models such as the Mustang Mach-E and the F-150 Lightning. However, it will need to overcome many challenges to compete with the Chinese EV makers, who have a clear advantage in cost, scale and innovation.
– Ford to scale back China investments amid EV competition from local rivals, Financial Times, May 16, 2023
– Ford will use China as a ‘listening post’ to better understand EV battery tech, Electrek, May 16, 2023
– Ford CEO Jim Farley says Chinese automakers such as BYD are its greatest EV rivals, MSN, May 25, 2023
– Ford CEO On EVs: “We see the Chinese as the main competitor, not GM or Toyota”, MSN, May 29, 2023