Ford CEO Jim Farley bluntly called Chinese electric vehicles an “existential threat,” highlighting their fast-paced advancements.
A few years ago, few industry experts would have predicted that Chinese car manufacturers would be consistently producing some of the most impressive and technologically advanced EVs on the market. Yet, that’s exactly what’s happening. This realization struck Ford CEO Jim Farley and CFO John Lawler hard last year, leaving them stunned at how quickly China has caught up—and, in many cases, surpassed Western automakers.
Ford has maintained a strong presence in China for many years, and in early 2023, CEO Jim Farley and CFO John Lawler traveled there to test an electric SUV from Changan Automobile, a local company partnered with Ford in a joint venture. According to a recent Wall Street Journal report, Farley took the driver’s seat with Lawler as his passenger, and both were highly impressed by what they experienced.
“Jim, this is nothing like before,” Lawler reportedly told Ford’s CEO. “They’re ahead of us.” While the Wall Street Journal did not specify which Changan model they drove, it was impressive enough for Farley to later tell Ford board member and former Goldman Sachs executive John Thornton, “This is an existential threat,” according to the report.
Tariffs on Chinese-made EVs may offer Ford some protection from the influx of electric cars coming from the East. However, despite being aware of the significant advancements in Chinese vehicles, Ford continues to approach its expansion into the electric vehicle market cautiously.
In early July, Farley announced that Ford would be ready to launch a $30,000 EV by 2027, a smaller vehicle designed to compete with strong Chinese alternatives while remaining profitable. However, as work continues on this new model, Ford has scaled back some of its EV ambitions.
By mid-July, the company revealed that its plan to go fully electric in Europe by 2030 was no longer realistic, and it would continue offering internal combustion engine (ICE), hybrid, and battery electric vehicles (BEVs) in the market. In August, Ford scrapped plans for a three-row electric SUV slated for 2025 production, and delayed the launch of a large electric truck from 2025 to 2027.
