When Ford boss Jim Farley wanted to test the competition, he didn’t look at Tesla, but at China. Now he’s looking for ways the legacy automaker can emulate its Chinese counterparts.
For six months in 2024, Farley drove the Xiaomi Speed Ultra 7, the first electric vehicle from the Chinese technology company best known for its smartphones. When the six months were up, Farley said, “I don’t want to give it up.”
In an interview on Quick response Podcast On Friday, Farley explained why he chose to drive a Xiaomi SU7 rather than a vehicle from an American company like a Tesla.
“Nothing against Tesla. They’re doing great, but you know, they really don’t have an updated vehicle,” Farley told host Bob Safian.
Tesla has pushed some redesigns and updates to its vehicles to meet growing Chinese competition. The company’s 2026 version of the Model Y featured a futuristic-looking exterior and an improved interior that included a redesigned dashboard. The 2023 version of Tesla’s Model 3 has also been revised and equipped with ventilated front seats and ambient lighting. Some criticism have argued that these updates are incremental compared to improvements made by Chinese automakers.
Tesla did not immediately respond AssetsPlease comment.
If Ford wants to be the best in the world, Farley argued, the company must focus on its competition abroad, not just Xiaomi but also Chinese electric vehicle leader BYD, which the Ford CEO called “the best in the business” in terms of costs, supply chain, manufacturing and intellectual property.
Chinese electric vehicles won’t be sold in the US as President Joe Biden imposed an increased 100% tariff and President Donald Trump maintained it. Still, Chinese vehicles, particularly BYD’s low-cost electric vehicles, have begun to take hold in other markets. Despite a tariff of up to 38.1% imposed by the EU on Chinese vehicles in 2024, BYD increased its European sales almost threefold at the start of the year, with BYD’s new registrations rising to 18,242 in January, up from 6,884 in the same month last year Wall Street Journal reported.
BYD was founded in 1995 as a battery maker but moved into car production in 2003 when founder Wang Chuanfu bought struggling state-owned automaker Xi’an Qinchuan Automobile. BYD later expanded its electric vehicle production by focusing on sales in China, which quickly became the world’s largest electric vehicle market, in part because the government offered subsidies to both consumers who bought electric vehicles and the companies that made them. In addition, charging infrastructure has been built in the country and strict fuel consumption standards have been set for gas-powered vehicles.
In 2022, BYD became the first car manufacturer in the world to stop producing internal combustion engine cars exclusively with gasand instead focuses on electric vehicles and hybrids. By 2025, the company had overtaken Tesla in terms of sales and continued to do so dethroned Elon Musk’s company as the world’s largest manufacturer of electric vehicles. Tesla still has a much higher valuation compared to BYD at $1.22 trillion $138 billion.
Farley said during the interview that he wants Ford to emulate BYD and do what Americans are great at: “Using innovation to compete with the best in the world.”
Chinese electric vehicles are particularly cheap, but also advanced. Critics have argued that the About $231 billion in subsidies The Chinese government has acknowledged the domestic electric vehicle industry has allowed companies like BYD to sell their cars below cost to outperform other industry players.
Nevertheless, even Tesla CEO Elon Musk admitted in 2024 that Chinese industry participants were “the most competitive automotive companies in the world.”
Farley said Ford should take a cue from BYD and build cars that meet the needs of the “next cycle” of American car buyers who want a wide range of different body styles, but for $30,000, not $50,000.
“If we’re smart, we’ll take BYD’s cost competitiveness and then compete with that platform in parts of the market where we know our customers really well,” he said.
Ford’s cheapest vehicle, the Maverick XL hybrid pickup, starts at about $28,000while Tesla’s cheapest vehicle, the Model 3 sedan, starts at just under $37,000. Both entry-level vehicles are significantly more expensive than BYD’s compact EV hatchback, the Seagull goes for $9,500 but only in China. It is sold at a higher price abroad, including in Latin America and Europe.
Ford is already reinventing itself to compete and has succeeded $19.5 billion feeone of the biggest setbacks ever suffered by a company in December as it overhauled its EV strategy, driven in part by weaker-than-expected demand after Trump ended EV credit.
The company is now focusing on hybrids and so-called extended-range electric vehicles (EREVs), which have a small internal combustion engine that acts primarily as a generator to charge the car’s electric battery and provide greater range. Ford’s F-150 Lightning, once considered the future of its electric vehicle business, will be converted as an EREV.
But it’s not a complete departure from electric vehicles. By 2027, Ford still plans to produce a $30,000 electric pickup truck that will be the first in a new class of low-cost electric vehicles. The Ford F-150 Lightning for comparison: starts at $54,780.
Farley has been among the loudest voices urging U.S. automakers to take notice of the Chinese, previously saying the company sees Chinese automakers, not GM or Toyota, as its biggest competitors.
As a result, Farley says Ford is changing the way it does business to emulate its Chinese competition as the company works to become a better company.
“That’s the gift that China gave us,” he said, “to be so fearful and respectful of their advances that we couldn’t just denounce it.”
