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Jim Farley has spent years warning that China is the real competition in the global auto industry. He has visited Chinese factories, tested their electric vehicles, and repeatedly emphasized how serious the challenge has become.
But beyond public statements, Farley conducted a personal experiment. For six months in 2024, the CEO of Ford Motor Company drove a Chinese electric car daily—and by the end, he didn’t want to give it back.
That car was the Xiaomi SU7, the first EV from Xiaomi. What started as a simple evaluation turned into genuine admiration and reshaped Ford’s strategic thinking.
Why Farley Chose Xiaomi Over Tesla
During an appearance on the Rapid Response podcast, Farley explained why he chose Xiaomi instead of a Tesla for his long-term test.
His statement was direct:
Tesla has done great, but it doesn’t have a truly updated vehicle right now.
While Tesla has introduced updates—like the refreshed Model Y and improved Model 3—critics argue these are incremental.
In contrast, Chinese automakers are:
- Building software-first vehicles
- Using advanced manufacturing systems
- Redesigning cars from the ground up
- Achieving aggressive cost efficiency
For Farley, the real competition isn’t Tesla—it’s China.
BYD: The Benchmark Ford Is Studying
Farley repeatedly highlights BYD as the industry benchmark.
Why BYD Stands Out
- Superior cost structure
- Deep supply chain integration
- Advanced manufacturing precision
- Strong intellectual property
Founded in 1995 as a battery company, BYD entered the auto sector in 2003 and has since become the world’s largest EV manufacturer by volume.
By 2025:
- BYD surpassed Tesla in revenue
- Became global EV leader by units sold
Even Elon Musk acknowledged Chinese automakers as the most competitive globally.
Government Support & Global Expansion
China’s EV success is backed by massive government support:
- Consumer subsidies
- Manufacturing incentives
- Charging infrastructure expansion
However, this has sparked global tensions:
- EU imposed tariffs up to 38.1%
- US imposed 100% tariffs
Despite this, BYD continues rapid growth.
In early 2026, its European sales nearly tripled, proving that tariffs slow growth but don’t stop it.
What Ford Plans to Do About It
Farley believes China’s rise is not a threat to fear—but a lesson to learn from.
His strategy:
- Adopt BYD’s cost efficiency
- Build vehicles tailored to customer needs
- Focus on affordability
Key Target
The next generation of buyers wants vehicles around $30,000—not $50,000.
Current Price Gap
- Ford Maverick XL: ~$28,000
- Tesla Model 3: ~$37,000
- BYD Seagull: ~$9,500
This gap defines the competitive challenge.
Ford’s Strategic Shift
Ford has already begun major changes:
Key Moves
- $19.5 billion restructuring charge
- Shift toward hybrids & extended-range EVs
- Retooling F-150 Lightning into EREV
Upcoming Plan
- Launch a $30,000 electric pickup by 2027
- Create a separate innovation team
- Speed up development cycles
This marks one of Ford’s biggest transformations in decades.
What Is an Extended-Range EV (EREV)?
An EREV uses:
- Electric motor for driving
- Small engine as a generator
This solves range anxiety while keeping EV efficiency.
Ford sees this as a practical bridge between hybrids and full EVs.
The Bigger Industry Shift
Farley has made a critical statement:
Ford’s real competitors are no longer traditional giants like Toyota or GM—but Chinese companies like BYD and Xiaomi.
This changes everything:
- What companies study
- How fast they innovate
- How they price vehicles
The Reality Check
Ford’s transformation is still in progress:
- $30K EV not yet launched
- New platform under development
- Heavy financial investment ongoing
Meanwhile, Chinese automakers continue to move fast.
Final Insight
A CEO who drove a Xiaomi SU7 for six months and didn’t want to return it is sending a clear message:
The global EV race is no longer led by the West.
The future of the auto industry is being shaped in China.
And companies that fail to recognize this risk falling behind.
Frequently Asked Questions (FAQs)
Q1. Why did Jim Farley drive the Xiaomi SU7?
To understand real competition in the EV market, especially from China.
Q2. What impressed him about the Xiaomi SU7?
Its design, technology, and market relevance made a strong impact.
Q3. Why is BYD so important?
It leads in cost, scale, and EV production globally.
Q4. Why aren’t Chinese EVs sold in the US?
Due to 100% import tariffs.
Q5. What is Ford’s future EV plan?
A $30,000 electric pickup and a shift toward hybrid + EREV models.
Conclusion
The biggest takeaway from Farley’s experiment is simple:
The EV race is accelerating—and China is setting the pace.
Ford’s future now depends on how well it can learn, adapt, and compete in this new reality.