Why Jim Farley Thinks China Is A Greater Threat To Ford Than GM Or Toyota

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Ford CEO Jim Farley has dismissed the likes of GM and Toyota from his list of EV rivals and instead worries about the likes of Geely, BYD, Great Wall and SAIC. That’s according to the Blue Oval head’s statement at the Morgan Stanley Sustainable Finance Summit earlier this week.

“The Chinese are going to be the powerhouse,” said Farley. Indeed, Chinese manufacturers are forging ahead with EV tech, with BYD already vying to sell more EVs globally this year than current leaders Tesla. China represents the world’s largest auto market and has already harnessed state-of-the-art battery production.

And these automakers are looking for inroads into Europe too. Chinese carmakers exported two million vehicles in 2022, a four-fold increase from 2020, and given the strength of exports through the first quarter of 2023, Chinese car exports could top three million vehicles this year.

Related: China Wary Of Ford’s $3.5B Michigan Battery Factory With CATL

Where Farley thinks the Chinese automakers may have Ford over a barrel concerns costs and scale. “How do you beat them on cost if their scale is five times yours?” Farley asked. While the Ford CEO believes his company can continue to compete with its distinctive branding, it is forced to try and cut costs as Chinese sales have slid since 2016.

Closer to home, Ford has partnered with Chinese battery maker CATL to build a new plant in Michigan, while the U.S. Treasury is yet to rule on whether the Blue Oval’s other Chinese partnership — Ford SAIC — violates the regulations against “foreign entities of concern” attached to the $7,500 EV credit.

“We have a decision to make here in the US. If battery localizing their technology in the US gets caught up in politics – you know the customer is really going to get screwed,” said Farley, according to Reuters.

Farley isn’t alone in his concern over China. Elon Musk has earlier conceded that Chinese automakers have been working hard and smart, as he expects an automaker from China to be second to Tesla in the EV race. And, earlier this week, Tesla’s Shanghai factory began exporting Tesla Model 3s and Model Ys to North America, with the first MIC (Made-In-China) models landing in Canada.