A person tries the Chinese-made Xiaomi Speed Ultra 7 sedan displayed at a store in Beijing in May.Tingshu Wang/Reuters
Gus Carlson is a U.S.-based columnist for The Globe and Mail.
When Ford Motor chief executive officer Jim Farley imported a Chinese-made electric vehicle to gain some first-hand competitive intelligence, he didn’t expect to fall in love.
Now, he says of his Xiaomi Speed Ultra 7 test car, “I’ve been driving it for six months now, and I don’t want to give it up.”
Mr. Farley’s remarkably unvarnished revelation at the annual Aspen Ideas Festival last week was yet another wake-up call for Western automakers and maybe an inadvertent ding on the products made by his own company and its traditional rivals.
But it was just part of a bigger warning about what he calls the “humbling” superiority of Chinese EVs’ quality, technology and pricing, and the dire threat they pose for global carmakers − both the legacy brands and EV makers such as Tesla Inc. TSLA-Q.
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The competitive challenge is so big, Mr. Farley said, “if we lose this, we do not have a future Ford.”
Mr. Farley’s transparency may be refreshing − and his dramatic soothsaying is perhaps a bit of a public prodding of the Ford team as it embarks on a revitalization of the company’s struggling EV program. There’s also nothing more stand-up than showing respect for rivals.
But it’s a big step from expressing admiration for a competitor to floating the idea of a world without Ford after more than 120 years in business. The nub: If Ford’s latest EV Hail Mary pass isn’t completed, Mr. Farley’s prediction that the company − and by extension any company that can’t meet the challenge − may cease to exist is positively apocalyptic.
It’s no secret that legacy automakers such as Ford have had a difficult time getting consistent and profitable traction in the EV market.
And while Ford’s first-quarter EV sales were up modestly from a year earlier, the cash burn of its Model e program has been significant – and with disappointing results.
The program has lost close to US$10-billion over the past two years. Losses are expected to be more than US$5-billion this year.
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The inability of Ford to create enough commercially compelling EV models killed the US$1.8-billion conversion of its assembly plant in Oakville, Ont., to produce electric cars starting this year. Last summer, the company said it would shelve plans for the conversion and instead build heavy-duty trucks at the factory.
Last fall, the company also stopped production of its new F-150 Lightning electric pickup trucks because of weak demand and laid off more than 700 workers at a Michigan plant.
While General Motors Co. GM-N has fared marginally better in the EV transition, the North American market is still relatively small. Based on total first-quarter EV sales this year of about 300,000 units, full-year sales are expected to total north of one million cars.
The global EV market is where the battle will be won and lost – and that’s where Chinese-made products dominate. Of the 17 million EVs sold worldwide in 2024, Chinese vehicles accounted for more than 11 million.
While the legacy automakers are feeling the heat, Tesla is not immune. Its once dominant share of the U.S. market has been cut almost in half.
And if Mr. Farley’s personal experience is any indicator, Tesla is about to come face to face with a potential giant-killer.
A Xiaomi YU7 car is displayed at the showroom of the Xiaomi EV Factory, where all the company's electric vehicles are made, in Beijing on Tuesday.GREG BAKER/AFP/Getty Images
Last month, Xiaomi XIACF unveiled its new EV called the YU7, a luxury high-performance SUV marketed as a cheaper alternative to the new Tesla Model Y. The YU7’s sticker price will be about US$35,000.
Despite the steep climb ahead, Ford has no choice but to double down on its EV aspirations. It is planning a single EV platform that will underpin eight body styles. And it has vowed to do it all at costs that are competitive with Chinese rivals and appealing to car buyers, many of whom have balked at going electric because of high sticker prices.
Ford has a lot to do to meet the expectations of Mr. Farley, who said he was stunned by China’s EV superiority during several visits there over the past year.
“It’s the most humbling thing I have ever seen,” he said. “They have far superior in-vehicle technology.”
“Beyond that,” he added, “their cost, their quality of their vehicles is far superior to what I see in the West.”
As for Mr. Farley’s Xiaomi test car, he may not want to give it up until his own company can make a car that matches or exceeds its across-the-board excellence. And if Ford can’t, in his view, there may be no company left.