Ford Sees ‘Colossal’ Competitive Threat in Chinese EVs

Executives Warn China’s Lead in Tech Will Give Edge Over American Automakers
Ford sign
A Ford Motor Co. sign outside a dealership. (Matt Rourke/Associated Press)

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Ford Motor Co. sees low-cost Chinese electric vehicles as a “colossal strategic threat” that will ultimately arrive on U.S. shores, adding to the challenges for an automaker already confronting shaky consumer demand for plug-in cars.

“They are ahead of us in this technology,” Marin Gjaja, chief operating officer of Ford’s EV unit, Model e, said Feb. 14. “We look at that and say, ‘That’s coming here eventually, so we’d better get fit now and better get going on EVs, or we don’t have a future as a company.’”

Ford is recalibrating its EV strategy as mainstream U.S. consumers balk at the high price of battery-powered models and the spotty charging infrastructure. CEO Jim Farley revealed last week that Ford is working on low-cost EVs to take on Chinese competition and an affordable model that Tesla Inc. says it has coming. China’s BYD Co. recently surpassed Tesla as the world’s largest EV maker, with low-priced models such as its $11,000 Seagull.

Speaking in a panel discussion on disruptive technology in Detroit, Gjaja said Ford expects Chinese automakers to build factories in Mexico to get around the 27.5% U.S. tariff on EVs made in China. He cited news reports that BYD is already scouting factory sites in Mexico.

“If I was sitting in China right now running a Chinese OEM, I’d be looking for land in Mexico because you’ve got a supplier base, low cost of construction, low cost of labor and the USMCA” trade agreement “that gives you access to the U.S.,” Gjaja said in an interview after the panel. “They’re going to come here, just as the Japanese ended up here, the Koreans ended up here and the Germans ended up here. It’s a big market.”

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