This might be hard to hear, but China’s electric car industry is running laps around the US, which Ford CEO Jim Farley describes as «the most humbling thing I have ever seen.»
Seventy percent of electric vehicles are made in China and «they have far superior in-vehicle technology,» Farley said at the Aspen Ideas Festival, according to Business Insider. «You get in, you don’t have to pair your phone. Automatically, your whole digital life is mirrored in the car.»
Meanwhile, the cost and quality of the vehicles «is far superior to what I see in the West.»
Farley has been open about the US auto industry’s inability to compete with China for a while. In August 2024, Ford cited it as the main reason it killed plans for a 3-row electric SUV and pivoted to hybrids. The biggest issue is China’s access to cheaper batteries.
«The electric vehicle market is rapidly evolving as Chinese competitors leverage advantaged cost structures,» Ford said at the time. «An affordable electric vehicle starts with an affordable battery. If you are not competitive on battery cost, you are not competitive.”
China is the dominant global player when it comes to battery minerals mining and production. Its companies bankroll new plants around the world, including one in Indonesia that’s set to open in 2026, Reuters reports. The Chinese government also heavily subsidizes the industry, putting US automakers far behind, according to the Carnegie Endowment for International Peace.
Access to cheap batteries means more affordable but still-high-quality EVs. Farley drove a Xiaomi SU7 for six months, the first vehicle made by the well-known smartphone company. During an October appearance on «The Fully Charged Podcast,» Farley said he «doesn’t want to give it back.»
Xiaomi EVs are not available in the US due to a 100% import tariff on Chinese EVs imposed last year that makes them prohibitively expensive. (By 2027, all «connected» passenger vehicles made or owned by Chinese or Russian entities will also be banned from operating in the US.)
519-Mile Range for $35,000
Xiaomi debuted its second vehicle last week, the YU7. It starts around $35,000, just undercutting the price of the Tesla Model Y, with an eye-popping 519-mile range (835km) on the Chinese CLTC scale. Range numbers are typically lower on the US EPA’s scale, but the range would likely remain impressive. The Model Y starts at $44,990 with a 357-mile range.
Even at that low price, the YU7 is a «high-performance luxury SUV,» Xiaomi says. The few EVs in the US priced around $35,000 are not in the luxury segment, such as the Chevrolet Equinox EV ($33,600) and Hyundai Kona ($32,975). The Tesla Model Y is also not considered luxury like the Model X. Simply put, Chinese EV buyers are getting more for their money.
Politics Get in the Way
The Biden administration aimed to catch up with China’s EV industry by allocating billions for US battery production and research. It also set aside $5 billion for a nationwide EV charging network and created a $7,500 electric vehicle rate for qualifying buyers.
The Trump administration offers a sharply different vision for the automotive industry and the nation’s energy supply. It promptly froze funding for the charging network upon taking office in January, although last week a federal judge ordered it to unfreeze funds for 14 states. The EV tax credit is also set to go away this year through a provision in the Big Beautiful Bill, which also introduces a new tax on wind and solar, The Wall Street Journal reports.
Tesla CEO Elon Musk slammed the bill on X today, calling it «utterly insane and destructive. It gives handouts to industries of the past while severely damaging industries of the future.»
Don’t expect Tesla and Ford to team up against their Chinese rivals anytime soon. As Fortune reports, Farley prefers Waymo’s LiDAR-based approach to autonomous cars over Tesla’s camera-only Autopilot system.
At the Aspen event, Farley confirmed that he’s talked with Musk about licensing Tesla’s technology. But when asked to choose between Waymo and Tesla’s robotaxi tech, Farley chose the former. Whereas a Tesla’s «camera [could] be completely blinded, the LiDAR system will see exactly what’s in front of you,» Farley said.
