What scared Ford’s CEO in China
Subscribe to enjoy similar stories. Jim Farley had just returned from China. What the Ford Motor chief executive found during the May visit made him anxious: The local automakers were pulling away in the electric-vehicle race.
In an early-morning call with fellow board member John Thornton, an exasperated Farley unloaded. The Chinese carmakers are moving at light speed, he told Thornton, a former Goldman Sachs executive who spent years as a senior banker in China. They are using artificial intelligence and other tech in cars that is unlike anything available in the U.S.
These Chinese EV makers are using a low-cost supply base to undercut the competition on price, offering slick digital features and aggressively expanding to overseas markets. “John, this is an existential threat," Farley said. For years, Tesla was the main source of consternation for auto CEOs trying to tackle a transition to electric vehicles.
Now, it is the rapid rise of nimble automakers in China that have rattled executives from Detroit to Germany and Japan. Even Tesla’s Elon Musk recently called the Chinese the “most competitive" carmakers in the world. In the span of a few years, Chinese EV maker BYD, backed by Warren Buffett, and other domestic brands have clawed away gobs of market share in China from once-dominant foreign rivals, through a combination of lower prices, high-tech interiors and rapid vehicle updates.
Today, they are quickly expanding in Europe, the Middle East and other Asian markets. In the U.S., carmakers see EVs as their future, but for now, EV sales growth has slowed, as high prices and charging hassles turn off some shoppers. Shortly after the trip, Farley arranged to have Chinese EVs shipped to Michigan for executives and
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