Historically, the “Big Three” automakers from Detroit have been dismissive of Chinese car manufacturers. However, Ford CEO Jim Farley now claims that U.S. car companies are encountering unprecedented challenges as Chinese automakers, once considered underdogs, have overtaken Ford, Stellantis, and General Motors in electric vehicle (EV) production.
In an interview with the Wall Street Journal, Farley stated that companies like Changan, Xiaomi, and BYD now represent “an existential threat” to Ford—not necessarily in the U.S. just yet, but in international markets such as Brazil and Mexico. Here, Chinese gasoline and electric vehicles comprise 20 percent of sales in a market previously dominated by American, German, and Japanese brands.
The shift in the market can be seen not only in Mexico but also in the U.S., where Japanese automakers gained popularity in the 1980s and 1990s, offering strong competition to Ford, Chevy, and Dodge.
Farley, who recalls this transformation vividly, emphasized to the WSJ that he has “seen this movie before,” indicating that he uses past lessons to guide his team about how Japanese and later Korean manufacturers established themselves in the U.S. market. His experience makes sense, given that he began his automotive career marketing for Toyota, where he played a key role in consistently driving growth for two decades before joining Ford in the late 2000s.
The rapid advancement of Chinese automakers in EV production reflects a trend similar to that of Japanese brands in the U.S. decades ago. As noted by the WSJ, these Chinese companies have reshuffled the competitive landscape through “elegant, low-cost engineering” and a supply chain that allows them to undercut Western rivals on price. Chinese brands, recognized for their quality and innovation, are “moving at light speed,” as Farley noted in his discussions with Ford CFO John Thornton. Other executives concur that Chinese electric vehicles are currently ahead of Ford and other American manufacturers in the U.S.
Ford finds itself at a disadvantage in China, where its joint venture partner Changan is rapidly producing EVs. Farley was so impressed by the models he assessed during a 2023 trip to China that he requested several to be sent to Michigan for evaluation. Upon their arrival, Ford executives gathered to examine these vehicles, and Farley told them that “executing to a Chinese standard is going to be the most important priority.”
This assertion may come as a surprise, especially considering that Ford is known for producing the best-selling F-Series truck in America. However, there are lessons to be learned from Changan, particularly in how to reduce recalls. It’s worth noting that Changan Ford is the joint venture responsible for producing many of Ford’s luxury vehicles sold in the U.S. under the Lincoln brand. Ford is taking a careful approach in China, prioritizing competitiveness in the commercial sector first.
Farley believes that this strategy plays to Ford’s inherent strengths, particularly in truck, off-road, and commercial vehicle production. Nonetheless, the company anticipates a loss of $5 billion in 2024 from its EV ventures, including the Ford F-150 Lightning, according to the Wall Street Journal. This substantial write-off is comparable to Ford losing half its anticipated operating profit for the year. The focus is now shifting to smaller, more cost-effective models instead of full-size electric pickups or the previously planned Ford Explorer-sized EV.
Farley advocates for the development of smaller electric models that can achieve weight savings and increased range without relying on large, costly batteries. To support this, Ford is adopting strategies used by Chinese competitors, focusing on a “low-cost mechanical layout as a foundation for multiple upcoming EVs,” as reported by the WSJ. This initiative is expected to produce a midsize EV truck by 2027, catering to buyers in both China and the U.S.
However, Ford’s midsize electric truck is still three years away from launch in both domestic and international markets. In the meantime, Chinese automaker Maxus, a brand under SAIC alongside MG, has unveiled the first midsize electric truck with four-wheel drive in the U.K. The MG Maxus eTerron 9 will enter the European market this year, with delivery expected in 2025, as reported by Autocar. The price is projected to exceed £50,000 before VAT, equivalent to around $66,300 at current exchange rates.
Despite its unfortunate name, the Maxus eTerron 9 has its appeal: it offers a range of up to 267 miles, towing capacity of 7,700 pounds, and a combined output of 429 horsepower from motors on each axle. Featuring air suspension, it can also lower its bed for easier cargo loading. Visually, it bears a resemblance to the latest Ford Ranger or the new Maverick.
While the eTerron 9 may not dethrone any current trucks in America, high tariffs currently protect domestic markets from Chinese EVs. Yet, the WSJ reports that Farley considers them an “immediate threat in Europe and other overseas markets, and a long-term risk in Ford’s North American profit base, despite protective measures.” Once viewed as insignificant, Chinese automakers now demand attention, prompting Ford to reassess its approach towards partners and rivals alike.
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