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, Feb. 13, 2023.
Michael Wayland/CNBC
DETROIT — Ford Engines biggest competition in electric vehicles is not the US leader Tesla or crosstown rival General engines — they are Chinese automakers, CEO Jim Farley said Thursday.
Farley said Chinese companies like Warren Buffett supported it BYD are ahead of the major US automakers and electric vehicle startups, especially battery chemistry and other emerging technologies.
“We see the Chinese as the main competitor, not GM or Toyota,” Farley said at the Morgan Stanley Sustainable Finance Summit.
He used BYD as the prime example of a Chinese automaker that has successfully developed and sold electric cars, first in China and now in Europe.
“I like BYD. Totally vertically integrated, aggressive… very, very impressive company. And they were always committed to electric,” said Farley when asked which company does EVs well.
BYD’s new luxury brand Yangwang sells its first model, the U8, for more than 1 million yuan ($160,000).
CNBC | Evelyn Cheng
BYD has grown its sales in China from 445,000 units in 2015 to nearly two million last year, placing it among the top five automakers in China, according to LMC Automotive.
Farley’s comments echo those of industry experts and investors on the growth of BYD and other Chinese automakers, which are government-backed in China.
“BYD has taken a huge place both from an electric vehicle perspective and from a battery manufacturing perspective,” Philip Ripman, portfolio manager at Storebrand Asset Management, told CNBC Pro Talks last week.
Ripman, who manages the $1 billion sustainable fund Storebrand Global Solutions, highlighted BYD’s advancements in lower-cost sodium ion battery technology, which could potentially replace lithium batteries. He noted that these could prevail in BYD’s more affordable EVs and help boost profit margins for the automaker.
Farley also noted BYD’s battery advantages over the current US industry standard for lithium-ion batteries.
The Ford Mustang Mach-E is presented at the New York International Auto Show, Manhattan, New York, April 5, 2023.
David Dee Delgado | Reuters
Earlier this year, Ford announced a new partnership with China’s Contemporary Amperex Technology Co., or CATL, for a new $3.5 billion plant to build low-cost batteries in Michigan.
The facility will produce new lithium iron phosphate batteries, or LFP, as opposed to more expensive nickel cobalt manganese lithium batteries, which the company currently uses. It is expected to open in 2026 and employ about 2,500 people, according to the Detroit automaker.
Farley praised BYD’s role in building out that technology.
“BYD’s scale is now much larger than Tesla’s, and they’ve developed the LFP technology, which is a better battery,” said Farley.
The Ford-CATL deal has been criticized amid tensions between the US and China. Especially Marco Rubio asked the Biden administration to review the deal, including Ford licensing CATL technologies. The Detroit automaker will take ownership of the new facility through a wholly owned subsidiary rather than operating it as a joint venture with CATL.
Farley said if politics gets in the way of allowing cheaper EV technologies in the US, consumers will be “screwed” with higher prices.
“We have to work through that in our country. And I think they’re really interesting companies,” Farley said.