Ford can’t realistically compete with Chinese electric vehicles without fundamentally reshaping its strategy. The US-based automotive giant aims to stay competitive against burgeoning Chinese electric vehicle manufacturers. Ford has revealed further details on its forthcoming affordable electric vehicle (EV) platform, outlining its strategy to stay competitive in the market, particularly vis-à-vis China’s dominance in the sector.
Ford vows to rival Chinese EVs with a budget-friendly strategy.
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Ford’s CEO Jim Farley recently disclosed a top-secret project, dubbed “skunkworks,” which has been working on a novel electric vehicle (EV) platform since last year.
Actually, isn’t that quite large? The team, led by former Tesla engineer Alan Clarke, has expanded to approximately 500 members, many of whom previously worked at companies like Tesla, Rivian, Lucid, and Apple.
Farley has previously stated at a corporate earnings call that the “final competitors will be reasonably priced Tesla and the Chinese OEMs.” Additionally, in October 2024, Ford’s CEO indicated that the company is benchmarking prices against the best rivals globally, including those in China.
In accordance with Farley, Ford’s upcoming mid-size electric pickup, built on a new platform, will “mirror the cost structure of Chinese OEMs manufacturing in Mexico”, thereby aligning with industry benchmarks.
During a candid dinner discussion towards the end of his tenure, Daniel Roeska, Bernstein’s top-ranked automotive analyst, engaged in an enlightening conversation with Lisa Drake, Ford’s vice president of technology platform applications and electric vehicle programs, to gain insights into the company’s innovative new platform.
In an advisory note sent to traders, Roeska reported that Lisa Drake was explicit: “Ford aims to replicate the price structure of major Chinese players.” The note further noted that this means not only matching battery prices, but also the full system value from chassis and thermal systems to inverters and electronics.
Ford will slash costs by employing prismatic LFP batteries sourced from China’s leading electric vehicle battery manufacturer, Contemporary Amperex Technology (CATL). The innovative products will be produced at a state-of-the-art manufacturing facility in Michigan.
Ford’s new low-cost electric vehicle (EV) platform is expected to support production of at least eight different vehicle body styles, including vans, crossover sport utility vehicles (SUVs), and potentially even sedans, according to Drake. Ford’s forthcoming affordable electric model, reportedly a midsize EV pickup, is expected to draw inspiration from the iconic Ranger, adopting a similar design aesthetic.
Roeska outlines that its innovative framework, characterised by eight distinct physique types, is poised to serve as the foundation for Ford’s electric vehicle strategy, boasting global relevance and versatility across the next decade.
Despite its progress, Ford still faces some significant obstacles. Ford is investing approximately $3 billion in a state-of-the-art lithium-ion iron phosphate (LFP) battery plant in Michigan, with expectations of securing around $700 million in federal tax credits to help mitigate the significant upfront costs. As Republicans seek to eliminate government subsidies and other incentives for electric vehicles, batteries, and various clean energy initiatives, they may be met with significant resistance.
Electrek’s Take
Will a Chinese-made electric car disrupt Ford’s domestic market dominance? The lack of progress is compounded by the Trump administration’s efforts to move in this direction.
After flying Xiaomi’s SU7 from Shanghai to Chicago for the past year, Farley described the Chinese EV as “unbelievable,” even mentioning he “doesn’t need to give it up.” Xiaomi has already delivered over 200,000 SU7 models since its launch just last March.
As Farley emphasized, “To truly outdo competitors, you must immerse yourself in the driving experience.” Meanwhile, Ford faces a challenge in catching up with Chinese electric vehicle manufacturers, such as BYD, which is rapidly expanding its global footprint and entering new foreign markets.
