The Wall Street Journal recently reported that Ford's CFO, John Lawler, told the company's CEO, Jim Farley, that "these guys are ahead of us" after they took a test drive in a Chinese electric SUV in 2023. The Ford Pairing were visiting China and took a Changan Automobiles electric SUV for a spin.
The Chinese state-owned automaker is a long-time venture partner with Ford, and other western manufacturers.
Farley drove and Lawler was passenger, giving the Ford executives a taste of what it was like to ride in a Chinese-made EV. It was most likely the Changan Qiyuan CD701 all-electric vehicle that was released in 2023, that the Ford execs drove. Apparently, they were both shocked and impressed by how smooth and quiet their drive was. It was at this point that Lawler reportedly said to Farley "Jim, this is nothing like before, these guys are ahead of us."
Farley's fears were further reinforced when he revisited China this year, claiming that Chinese car manufacturers were are an existential threat to the US Automobile industry. Ford are not the only western car manufacturer to make such a statement. Tesla's CEO Elon Musk, also acknowledged the threat posed by Chinese automakers, calling them "the most competitive car companies in the world."
The rapid ascendance of Chinese-made EVs has clearly got car makers rattled, prompting governments to introduce trade restrictions including those in the US and the European Union. But why did we not see this coming and could we have avoided this?
Absolutely, they could of! Unfortunately though, car makers in the west chose to think short-term and continued to produce and sell petrol and diesel vehicles, to eek out every last bit of profit on the outgoing carbon-based ICE platform. At a time when investment in electric was obvious, necessary and well overdue, western car makers adopted what they thought was, a relatively risk-free "wait and see" strategy. Unlike Henry Ford's pioneering and innovative approach that delivered the Model T Ford and the first moving assembly line, shaping the future of all automotive production, Ford were deliberately slow to invest in electric, letting others take the lead.
Western makers relied too heavily on China (and Tesla in the US) to undertake the initial research and development of electric, and push for the necessary technological leaps forward, a strategy that would see them jump on-board with EVs once the technological and market uncertainty had been bottomed-out. Sadly, things didn't go to plan. China did what they have always done; they looked to the future, the next big thing, and invested, heavily. They took a chance by retooling early and it paid off. Whilst we in the West were poking fun at the first iterations being produced by the the MG brand (bought by the Chinese back in 2006), China were already busy establishing themselves centre stage in electric automotive manufacturing. Ford's bosses are right, Chinese car makers are ahead with Pure Electric, but this didn't happen overnight and certainly not by accident...
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