Gone are the days when Chinese automakers were considered the underdogs of the automotive world. They’ve largely moved on from mimicking the designs of established brands and have significantly improved their engineering prowess. With a wealth of inexpensive labor and access to materials that international manufacturers can only dream of, they’ve become a formidable presence.
After a trip to China where he tested local vehicles, Ford‘s CEO had an eye-opening moment. The Wall Street Journal reported that Jim Farley told board member John Thornton that Chinese electric vehicle (EV) manufacturers pose “an existential threat.” On this trip, he was accompanied by Chief Financial Officer John Lawler, who openly acknowledged, “these guys are ahead of us.”
Farley noted he’s “seen this movie before,” drawing parallels to the rise of Toyota, Honda, and other Japanese automakers that have captured market share from American brands since the 1980s. He also connected the escalating influence of Chinese car manufacturers with the significant advancements made by Hyundai and Kia in recent years, particularly in the EV sector.
So how is Ford responding? In early February, Farley announced that a “skunkworks team” is developing a new platform specifically for affordable EVs to compete not only with Chinese firms but also with Tesla. In the meantime, they’re preparing to launch a fully electric Puma small crossover, although it’s unlikely to be available in the United States. The main market for the Puma-E is expected to be Europe, where Ford has recently postponed its ambitious goal of becoming fully electric by 2030.
EVs with the Blue Oval have been sparse. An electric three-row SUV was scheduled for a 2027 release (delayed from its initial 2025 launch), but it was ultimately canceled last month. Additionally, Ford is cutting EV expenditures by 10% and postponing the next-generation electric F-150 pickup truck for a second time. It was initially set for 2025, then moved to 2026, and is now pushed back to 2027.
You could say Ford has made some rather intriguing choices in recent years. Last year, it discontinued the Fiesta, a favorite in Europe. The supermini’s end followed the Mondeo’s phase-out in 2022, with the Focus also heading to retirement in 2025. These three models have been off the market in the U.S. for several years, with the Mondeo having been sold as the Fusion. The larger Taurus was retired in 2019.
Many governments around the globe have recognized the Chinese challenge and are implementing tariffs on EVs produced in China for export markets. Recently, the Biden administration established a hefty 100% duty on Chinese EVs. The U.S. Trade Representative’s office confirmed that this import duty will take effect on September 27.
Next week, the European Union is anticipated to vote on increasing tariffs. According to Automotive News Europe, the EU plans to impose duties of 36.3% on SAIC. Volvo’s parent company, Geely, could face a 19.3% tariff, while BYD vehicles shipped to Europe may incur a 17% duty. However, Bloomberg suggests that these rates might be subject to reduction.
Source and Images: Motor1