Ford CEO Calls China’s EV Dominance a Wake-Up Call for U.S. Automakers

Ford CEO Jim Farley has sounded the alarm on China’s electric vehicle (EV) industry, describing its technological and cost advantages as a critical challenge for American automakers. Speaking at the Aspen Ideas Festival on June 27, 2025, Farley called China’s EV progress “the most humbling thing I have ever seen,” citing superior in-vehicle technology and production efficiency that outpace Western competitors. Farley’s remarks highlight a pivotal moment for the U.S. EV industry as it grapples with global competition.

China’s EV Technology Sets the Bar

Farley emphasized China’s lead in in-vehicle technology, particularly in seamless digital integration. “They have far superior in-vehicle technology. Huawei and Xiaomi are in every car,” he said. “You get in, you don’t have to pair your phone. Automatically, your whole digital life is mirrored in the car.”

This contrasts with U.S. vehicles, where tech giants like Google and Apple have opted out of direct automotive ventures, limiting similar advancements. Farley’s experience driving Xiaomi’s Speed Ultra 7 (SU7) for six months underscores this gap. “I don’t want to give it up,” he said of the SU7, which he tested after Ford shipped one from Shanghai to Chicago.

China produces 70% of the world’s EVs, a dominance driven by cost and quality advantages. Farley noted that Chinese manufacturers achieve lower production costs while maintaining high vehicle quality, a combination that challenges Ford’s offerings. For example, Xiaomi’s recently unveiled YU7, a luxury high-performance SUV priced at $35,000, undercuts Tesla’s Model Y at $36,760. Xiaomi reported over 200,000 orders for the YU7, signaling strong consumer demand.

READ MORE: Xiaomi’s $35,000 YU7 SUV Sparks Record Share Surge with 289,000 Pre-Orders

Strategic Shifts at Ford

Ford’s response to this competitive pressure involves a significant pivot. In August 2024, Ford’s CFO John Lawler announced a $2 billion shift from planned all-electric SUVs to hybrid models. This strategic change reflects the need to balance consumer preferences with the economic realities of competing against China’s cost-efficient EVs. Hybrids offer a transitional solution, blending electric efficiency with traditional fuel options, which may appeal to U.S. buyers hesitant to fully embrace EVs.

The implications extend beyond Ford. China’s ability to integrate advanced technology at lower costs could reshape global EV standards, forcing U.S. manufacturers to innovate rapidly or risk losing market share. Regulatory differences also play a role—China’s streamlined EV policies contrast with the U.S.’s complex incentives and emissions rules, which can slow domestic progress.

Economic and Operational Challenges

Farley’s warning carries weight for the U.S. auto industry’s economic outlook. “We are in global competition with China, and it’s not just EVs. And if we lose this, we do not have a future Ford,” he said. The operational challenge lies in matching China’s production efficiency while investing in next-generation technology. For EV owners and enthusiasts, this competition could drive innovation, potentially leading to more affordable, feature-rich vehicles. However, it also risks short-term disruptions as companies like Ford recalibrate their strategies.

China’s EV advancements, exemplified by brands like Xiaomi, signal a transformative era. With vehicles like the YU7 offering high performance at 3,280 pounds and a range of approximately 373 miles (600 kilometers), the bar is set high. U.S. automakers must close the technology and cost gap to remain competitive, a task Farley acknowledges as daunting but essential.

Featured photo courtesy of Ford Motor Company.