- China has become a global EV powerhouse in recent years.
- Ford CEO Jim Farley said visiting the country was "the most humbling thing."
- He praised the technology, cost and quality of China's electric cars during an interview at the Aspen Ideas Summit.
China’s electric vehicle industry has seemingly risen out of nowhere and become a global goliath. To say Ford CEO Jim Farley is impressed would be an understatement.
“It’s the most humbling thing I’ve ever seen,” Farley said, speaking of his trips to China at the Aspen Ideas Summit on Friday. During an interview with the journalist Walter Isaacson, Farley said he’s been to China six or seven times in the past year to scope out the competition.
One of his big takeaways is the advanced tech in those vehicles. “They have far superior in-vehicle technology,” Ford’s CEO said.
The entire auto industry has talked a big game for years about developing “smartphones on wheels” or, to use an industry buzzword, “software-defined vehicles.” A few, like Tesla, have successfully made cars that act and feel like consumer devices—vehicles with lots of tech features, smooth digital interfaces and a steady stream of meaningful software updates. Most are playing catch-up.
As Farley tells it, Chinese firms have taken the in-vehicle digital experience up several notches, something our staff has noticed during visits to the country too. In the U.S., “technology” in most cars amounts to a media player, a navigation system and maybe some smart cruise control. China has pushed the envelope far beyond that.
“Huawei and Xiaomi are in every car,” Farley said, referring to two of China’s tech giants. “You get in, you don’t have to pair your phone. Automatically, your whole digital life is mirrored in the car. You have an AI companion that you can talk to … All the automatic payment is already there. You can buy movie tickets. It has facial recognition so it knows who’s in which seat and which media you like.”
The challenge for Ford and other automakers outside of China goes far beyond AI assistants. Thanks to massive government subsidies, vertical integration and other factors, Chinese firms have built up immense EV manufacturing scale and driven costs down. What’s perhaps even more worrisome to carmakers trying to compete with Chinese offerings in markets around the world: The cars may be cheap, but they don’t feel like it.
“And even beyond that, their cost, their quality of their vehicles is far superior to what I see in the West,” Farley continued. “We are in a global competition with China, and it’s not just EVs. And if we lose this we do not have a future at Ford.”
BYD, China’s biggest EV maker, famously sells the Seagull hatchback for under $10,000 domestically. It costs around $26,000 in Europe, where it recently debuted. Meanwhile, most automakers around the world are still struggling to scale up EV production, bring down high battery costs and turn a profit. To be sure, many analysts say the price war going on in China’s car industry is unsustainable—that this oversaturated market is bound to see some consolidation as smaller players collapse.
Still, the challenge remains: China’s car companies are building top-tier cars, they’re edging out foreign car companies from their home market and they’re expanding globally. Right now, high tariffs are keeping them at bay in the U.S., but auto executives expect Chinese cars to hit American shores sooner or later.
So what’s Ford doing to manage the situation? It’s learning from China, first off. Farley said he brings his whole leadership team on his trips to the country, where they drive as many of the latest cars that they can.
“Then we pick the four or five that we love and then we put them on a plane and fly them to Detroit. And then we drive the crap out of them, and then we take them apart and we put them back together,” he said. Previously, he said he loved driving the Xiaomi SU7, essentially China's version of the Apple car that never was.
Ford is also working on a $30,000 electric car that Farley called “the Model T of EVs.” It’s building up manufacturing of cheaper lithium iron phosphate, or LFP, batteries in Michigan through a licensing agreement with China’s CATL. That partnership has been mired in political controversy, but Ford argues it’s necessary to build affordable EVs in America.
“People don’t realize that China has IP that America needs,” he said. “I think we just need to be more humble as a country that they do things really well, that we need to learn.”
Got a tip about the EV world? Contact the author: Tim.Levin@InsideEVs.com
