The Ford CEO says tearing apart Tesla and Chinese EVs left him ‘shocked.’
Jim Farley literally stripped the cars down to their bolts to see how they were built.
And what he found hit harder than he expected.
It’s the moment that pushed him to overhaul Ford’s entire EV strategy.
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The Ford CEO Tesla teardown that changed his company’s future
Jim Farley isn’t your typical buttoned-up auto boss.
A lifelong car guy who races vintage Mustangs on weekends, he took over as Ford CEO in 2020 with one big problem to solve: Tesla.
Soon after stepping into the role, he asked his engineers to strip down a Tesla Model 3 inside Ford’s benchmarking labs to see how it compared with the Mustang Mach-E.
It wasn’t a PR stunt but an audit of Ford’s own work.
Farley wanted to know why the company’s electric cars cost more to build and carried extra weight.
“When we took apart the first Model 3 Tesla … it was shocking what we found,” he told the Office Hours: Business Edition podcast.
“I was very humbled.”
The teardown revealed that the Mach-E had roughly a mile (about 1.6 kilometers) more electrical wiring than the Tesla – extra weight that demanded a bigger, more expensive battery.
That realization led Farley to reorganize Ford’s electric operations.
In 2022, he created a standalone division called Model E so his engineers could move faster and be held directly accountable for results.
Model E lost more than $5 billion in 2024 and is expected to post similar losses this year, but Farley told the podcast he anticipated the hit.
“I knew it was going to be brutal business-wise,” he said.
“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.”
China’s EV boom is Ford’s biggest threat
Farley’s teardown didn’t stop with Tesla.
He’s been equally vocal about Chinese EV makers, calling them ‘far superior’ and warning that brands like BYD and Xiaomi are ‘completely dominating’ the market.
Around half of all new cars sold in China are electric.
In the US, it’s roughly one in 10.
He knows what that means: China’s edge isn’t just price, it’s pace.
And it’s forcing Ford to rethink how and where it competes.
The company’s next big play is a $30,000 midsize electric truck, built on a lean new production line designed to challenge Tesla and BYD head-on.
“We can’t walk away from EVs,” Jim Farley said.
“Not just for the US, but if we want to be a global company, I’m not going to just cede that to the Chinese.”
The US market may be cooling but globally, the race is only getting faster.
For Ford, the question now isn’t whether to build EVs, it’s whether it can build them as efficiently as the people who inspired the teardown in the first place.
Tearing down those cars didn’t just humble Farley, it rewired Ford’s future.
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