Ford CEO Jim Farley says Chinese automakers like BYD are his biggest EV rivals
Ford CEO Jim Farley at a battery lab for the automaker in suburban Detroit, announcing a new $3.5 billion EV battery plant in the state to produce lithium iron phosphate batteries, 13 February 2023.
DETROIT— Ford Motors The biggest competition in electric vehicles is not the US leader. tesla or rival from across town general motors — are Chinese automakers, Chief Executive Jim Farley said Thursday.
Farley said that Chinese companies like Warren Buffett backed BYD they are ahead of the big US automakers and startups in electric vehicles, specifically in battery chemistry and other emerging technologies.
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“We see the Chinese as the main competitor, not GM or Toyota,” Farley said during the Morgan Stanley Sustainable Finance Summit.
He used BYD as the prime example of a Chinese automaker that has successfully developed and sold electric vehicles, first in China and now in Europe.
“I like BYD. Fully vertically integrated, aggressive… a very, very impressive company. And they were always committed to electric,” Farley said when asked which company is doing EVs right.
BYD’s new luxury brand Yangwang is selling its first model, the U8, for more than 1 million yuan ($160,000).
CNBC | Evelyn Cheng
BYD has increased its sales in China from 445,000 units in 2015 to nearly two million last year, making it one of the top five automakers by sales in China, according to LMC Automotive.
Farley’s comments echo those of industry experts and investors regarding the growth of BYD and other Chinese automakers, which are backed by the government in China.
“BYD has a huge place, both from an electric vehicle perspective and from the battery production side,” Philip Ripman, a portfolio manager at Storebrand Asset Management, told CNBC Pro Talks last week.
Ripman, who manages the $1 billion Storebrand Global Solutions sustainable fund, highlighted BYD’s developments in cheaper sodium-ion battery technology, which could potentially replace lithium batteries. He noted that these could take precedence in BYD’s more affordable EVs and help boost the automaker’s profit margins.
Farley also pointed to the advantages of BYD’s battery compared to the current US industry standard for lithium-ion batteries.
The Ford Mustang Mach-E is unveiled at the New York International Auto Show, Manhattan, New York, April 5, 2023.
David Dee Delgado | trendswire
Ford earlier this year announced a new collaboration with China’s Contemporary Amperex Technology Co., or CATL, for a new $3.5 billion plant to build cheaper batteries in Michigan.
The facility will produce new lithium iron phosphate, or LFP, batteries, as opposed to the more expensive lithium nickel cobalt manganese batteries the company is currently using. It is expected to open in 2026 and employ about 2,500 people, according to the Detroit automaker.
Farley touted BYD’s role in building that technology.
“BYD’s scale is much larger than Tesla’s now, and they developed the LFP technology, which is a better battery,” Farley said.
The Ford-CATL agreement has been criticized amid tensions between the United States and China. Specifically, Marco Rubio asked the Biden administration to review the deal, which includes Ford’s license to CATL technologies. The Detroit automaker will own the new facility through a wholly owned subsidiary rather than operate it as a joint venture with CATL.
Farley said that if politics gets in the way of allowing cheaper EV technologies in the US, the consumer will be “screwed” with higher prices.
“We have to work on that at home. And I think these are really interesting companies,” Farley said.