Ford CEO says China main EV rival, not GM, Toyota

Reuters

Published May 25, 2023 03:51PM ET

Updated May 25, 2023 07:37PM ET

By David Shepardson

(Reuters) - Ford Motor (NYSE:F) Co CEO Jim Farley said on Thursday Chinese electric vehicle makers are its main rivals in the sector, but the company has hurdles competing on cost at a smaller scale.

"I think we see the Chinese as the main competitor, not GM or Toyota," Farley said at the Morgan Stanley (NYSE:MS) Sustainable Finance Summit. "The Chinese are going to be the powerhouse."

China, the world's largest auto market, has some of the best battery technology and dominates EV production, Farley said. He cited BYD, Geely, Great Wall, Changan SAIC as among the "winners" among Chinese automakers.

To beat Chinese automakers, Farley said Ford needs distinctive branding, which he believes it has, or lower costs. "But how do you beat on them on cost if their scale is five times yours?" Farley said. "The Europeans let (Chinese automakers) in - so now they are selling in high volume in Europe."

Ford said in February it would invest $3.5 billion to build an electric vehicle battery plant in Michigan using technology from Chinese partner CATL to produce lower-cost batteries.

The U.S. Treasury must still issue rules later this year that will determine whether the Ford SAIC arrangement violates a prohibition on "Foreign Entities of Concern" that is part of a $7,500 EV tax credit. Ford has faced criticism from Senator Marco Rubio for the plan.

"We have a decision to make here in the US," Farley said. "If battery localizing their technology in the US gets caught up in politics - you know the customer is really going to get screwed."

General Motors (NYSE:GM) CEO Mary Barra this week made her first visit to China since the start of the pandemic, as GM struggles with a sales slump there.