Ford CEO Jim Farley isn’t shy about acknowledging the monumental challenge facing traditional automakers like his own. The world of electric vehicles (EVs) is being rapidly reshaped by both aggressive upstarts like Tesla and an increasingly dominant wave of Chinese manufacturers, who seem to have a knack for adapting quickly. These newcomers are often outpacing legacy car companies in areas crucial for EVs: design and seamless software integration—areas where Ford has struggled to keep up.
Farley recently recounted the “shocking” moment that jolted him into rethinking Ford’s direction. It wasn’t a boardroom brainstorm or a market report, but rather a dispassionate examination of the competition. When Ford engineers began dissecting both Tesla Model 3s and several Chinese-built EVs, they uncovered a stark truth: those manufacturers were significantly ahead in terms of cost efficiency and software integration.
“I was very humbled when we took apart the first Model 3 Tesla and started to take apart the Chinese vehicles,” Farley revealed on the Office Hours: Business Edition podcast hosted by former Wall Street Journal reporter Monica Langley. “When we took them apart, it was shocking what we found.”
A Mile of Extra Wiring? Shocking Discoveries Inside Rivals’ EVs
One stark contrast stood out immediately. The Ford Mustang Mach-E contained a mile more electrical wiring than the Tesla Model 3 – unnecessary weight and complexity that hampered efficiency. These insights weren’t isolated. Farley’s team uncovered a pattern of smarter design, cheaper manufacturing, and deeper software integration in both Tesla and Chinese EVs compared to Ford’s offerings.
This discovery was a wake-up call. In response, Ford took the unprecedented step of restructuring its electric vehicle operations into a separate division, Model E, in 2022. This bold move aimed to streamline development and prioritize EV advancements over traditional gasoline-powered vehicles.
“We Can’t Walk Away From EVs” – Farley’s Declaration
Farley emphasized that the Chinese EV market is exploding, fueled by strong government support for battery technology. He sees this as more than just an American challenge: “If we want to be a global company, I’m not going to just cede that to the Chinese,” he declared.
The move has not been without financial turbulence. Model E lost over $5 billion last year. But Farley is undeterred. “I knew it was going to be brutal business-wise,” he stated, adding, “My ethos is, take on the hardest problems as fast as you can and do it sometimes in public because you’ll solve them quicker that way.”
Farley’s recent decision to routinely drive a Xiaomi SU7, praising the Chinese electric sedan in public, speaks volumes. It demonstrates a deep understanding of not only the threat posed by China but also the urgency with which Ford needs to adapt and innovate. The dismantling of rival vehicles was more than just an exercise; it served as a stark reality check that ignited a race against time for Ford’s survival in the rapidly evolving EV landscape.
