Chinese electric cars ‘an existential threat’ – Ford boss
The CEO of Ford has issued a fresh warning for the US and European car industry on the rapid growth of Chinese brands.
Ford CEO Jim Farley returned from a visit to China earlier this year "anxious" and "exasperated" about the threat Chinese-made electric vehicles pose to manufacturers in the US and Europe.
A revealing report by The Wall Street Journal details a series of trips to China made by Farley over the past 18 months to experience and drive cars made by the country's fastest-growing auto brands.
"John, this is an existential threat," the Ford CEO reportedly told fellow board member John Thornton after a visit in May, warning Chinese brands are moving much faster, and with new technology unlike any US brand.
Farley watched engineers pull apart a BYD "to reveal elegant, low-cost engineering," according to the Wall Street Journal, and test an electric vehicle from Ford's Chinese joint-venture partner Changan.
The CEO is said to have "sat silently" with Ford chief financial officer John Lawler after the test drive, who told the top boss: "Jim, this is nothing like before. These guys are ahead of us."
The publication reports Farley has "arranged" to have two Chinese electric cars shipped to Ford's Michigan headquarters for executives to experience.
One is the new SU7 sedan from smartphone giant Xiaomi, and the other a $US77,000 ($AU115,000) futuristic electric people mover from Li Auto, with plush rear seating Ford executives likened to "business-class air travel".
It was needed as Chinese cars – in particular, electric models – are rare in the US.
Only a handful of Chinese-made vehicles are sold in the US, and almost all are from manufacturers such as Lincoln, Polestar and Lotus which are not headquartered in the country.
Companies such as BYD and Changan sell vehicles in Mexico, but not in the US, due in part to hefty tariffs recently boosted from 25 to 100 per cent on electric vehicles from what remains the world's largest new-car market.
The top Ford executive has reportedly made changes inside the US car giant following his observations in China, including "exploring ways" to use the same "low-cost" parts suppliers as Chinese car brands.
The US car giant is developing a new range of cheaper and smaller electric cars designed by a 'skunkworks' team in California, set to launch with a Ranger-sized ute due in 2027.
"Either he can make us uncomfortable, or we can wait, and the Chinese can make us uncomfortable," Doug Field, a former Tesla and Apple executive who is now Ford's Chief EV, Digital, and Design Officer, told The Wall Street Journal.
Ford's growing understanding of Chinese electric cars comes as the company continues to post hefty losses selling its current range of battery-powered models.
The company expects to lose $US5 billion ($AU7.5 billion) on electric vehicles this year, with Farley quoted by the publication as saying: "The sense of urgency is so high because the $[US]5 billion loss is so visible."
Amid cooling demand for electric vehicles, plans for a large, seven-seat, long-range Ford electric SUV have been shelved due to a high projected price, while the company's next-generation, full-size electric pick-up has been delayed.