Last year, Jim Farley, the CEO of Ford Motor Company, visited China. However, this visit brought him a strong sense of &#34;anxiety&#34; - Ford is falling behind in the electric vehicle competition with Chinese automakers.
&#34;What scared the Ford CEO in China?&#34; This was the headline of a lengthy article published by The Wall Street Journal on September 14th local time. The article stated that after his visit to China, Farley told the company's board members that Chinese automakers are advancing at lightning speed, using artificial intelligence and other technologies in cars that are fundamentally different from existing technologies in the United States. These Chinese electric vehicle manufacturers, who provide smooth digital functions, are using a low-cost supply chain to beat competitors on price and actively expanding into overseas markets.
To Farley, this is already a &#34;survival threat.&#34; The Wall Street Journal also stated that for years, Tesla has been the source of &#34;anxiety&#34; for industry executives looking to transition to electric vehicles. But now, with the rapid rise of Chinese automakers, the United States, Germany, and Japan are all feeling uneasy. Even Tesla CEO Musk recently admitted that Chinese automakers are the &#34;most competitive&#34; in the world.
In just a few years, Chinese electric vehicle manufacturers such as BYD have taken a large share of the domestic market from foreign competitors by offering low prices, high-tech interiors, and rapid vehicle updates. Now, these Chinese automakers are rapidly expanding into Europe, the Middle East, and other Asian markets.
On the other hand, in the United States, although automakers see electric vehicles as the future, sales growth is slowing due to high prices and inconvenient charging, causing some buyers to hesitate.
The article recalls that decades ago, global automakers, including Ford, did not see Chinese automakers as a &#34;threat.&#34; In the 1980s, China opened its car market to foreign companies, leading to the emergence of many joint venture companies. At that time, Chinese domestic manufacturers mostly played the role of &#34;little brother&#34; to foreign partners.
Later, China systematically invested in a plan to surpass global automakers by developing electric vehicles. By the early 21st century, those once struggling Chinese companies, along with hundreds of startups, had begun producing stylish and affordable electric vehicles. In particular, BYD sold over 3 million pure electric and plug-in hybrid electric vehicles last year, nearly seven times the sales in 2019.
In early 2023, after the lifting of COVID-19 prevention and control restrictions, Farley visited China for the first time and sat in the driver's seat of an electric SUV from Ford's long-term partner, Changan Automobile. Over the years, Changan Automobile has been a mediocre player in the Chinese car market, with a market share hovering around 5%.
However, this time, Farley, a racing enthusiast with extensive knowledge of cars, drove the Changan Automobile on the test track, with Ford's CFO John Lawler sitting in the passenger seat and other executives quietly observing. They were shocked by the results achieved by Changan Automobile - a smooth and quiet driving experience, a high-end interior, full of technology and easy to use
&#34;Jim, this is completely different,&#34; Lawler told Farley after test driving, &#34;They are ahead of us.&#34;
The article introduces that shortly after Farley's visit to China, he arranged for some Chinese electric vehicles to be transported to Michigan for company executives and directors to test drive, including cars from brands like Xiaomi, Li Auto, and others. After seeing these futuristic cars equipped with powerful infotainment systems and luxurious seats, Farley emphasized, &#34;Meeting Chinese standards will become the top priority.&#34;
Having served as Ford's CEO for four years, Farley is a well-known &#34;car enthusiast.&#34; He believes that regardless of protectionist measures, Chinese electric vehicles pose a &#34;direct threat&#34; to Europe and other overseas markets, as well as a long-term risk to Ford's profit engine in North America.
The Wall Street Journal described that over the past 18 months, Farley has visited China several times, describing it as &#34;humble trips,&#34; and has gained valuable insights, leading him to change the electric vehicle strategy. During his visits to China, Farley witnessed the elegant industrial design of BYD, and he was impressed by the ride quality and high-tech features of electric vehicles from other Chinese brands.
As a result, Farley decided to shift Ford's focus in China to commercial vehicles rather than competing with local manufacturers in the consumer market. Additionally, his team is exploring contracts with low-cost component suppliers that provide significant advantages to Chinese electric vehicle manufacturers, shifting Ford's strategic focus to small electric vehicles rather than large pickups and SUVs that require large and expensive batteries.
In June of this year, Farley revealed that Ford plans to launch a pure electric vehicle priced at $30,000 (approximately 218,000 RMB), which is expected to be profitable in about two and a half years. He mentioned that the main competitors for this new car are Chinese automakers like BYD and Tesla's previously announced entry-level model.
Regarding the size of the new car, he stated that Ford will focus on small electric vehicles, while large trucks and SUVs will continue to be Ford's profit engine in the form of fuel-driven vehicles

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Ford CEO Jim Farley felt anxious after visiting China, as Chinese electric car manufacturers have rapidly surpassed Ford in technology and price, posing a survival threat. Farley pointed out that Chinese automakers are actively expanding overseas markets by utilizing low-cost supply chains and advanced technology, causing unease among American and other countries' car manufacturers. Tesla CEO Musk also acknowledged the competitiveness of Chinese manufacturers. In contrast, electric car sales in the United States have been growing slowly due to high prices and inconvenient charging

- Ford CEO Jim Farley's visit to China last year revealed a growing "anxiety" as Chinese electric car manufacturers surged ahead in the race, utilizing advanced technology and low-cost supply chains to outpace competitors globally, posing a "survival threat" to Ford according to Farley.
- Chinese electric car makers like BYD have rapidly gained market share domestically and are expanding overseas, while in the US, high prices and charging inconvenience have slowed electric car sales growth, prompting a shift in Ford's strategy towards smaller electric vehicles to compete with Chinese manufacturers.
- Farley's experiences in China led to a strategic pivot focusing on commercial vehicles and partnerships with low-cost component suppliers, aiming to launch a profitable $30,000 electric car to compete with Chinese brands like BYD and Tesla's affordable models within the next two and a half years.

What "scared" the CEO of Ford in China?