Ford CEO: U.S. policy keeping Chinese EVs at bay
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Ford Motor CEO Jim Farley says he's growing more confident the automaker can produce EVs profitably in the U.S. because government policies have helped level the playing field with low-cost Chinese competitors.
Why it matters: Ford is the second-largest EV brand in the U.S. — although well behind Tesla — thanks to the popularity of its Mustang Mach-E, F-150 Lightning pickup and E-Transit commercial van.
- But EVs are still a money-losing proposition for Ford, which expects to lose a whopping $5.5 billion on them this year.
Driving the news: The next generation of EVs will be cheaper to build, Farley told Axios last Friday after speaking at the Aspen Ideas Festival in Colorado.
- That's in part because of EV incentives in the Inflation Reduction Act (IRA), plus other government policies.
- For example, the Biden administration has imposed 100% tariffs on Chinese EVs and moved to crack down on technology that could track U.S. drivers — all part of a broader effort to block low-cost Chinese EVs from coming to the U.S.
What they're saying: "It seems like the government is very serious about passing policy around data privacy and autonomous technology coming from those OEMs," Farley told Axios, referring to Chinese manufacturers.
- "With the recent changes, I am more confident than I was before that we would have a level playing field with the Chinese in the U.S."
State of play: An existing 27.5% tariff has all but barred low-cost Chinese EVs from the U.S. so far.
- But some models from BYD, which recently surpassed Tesla as the world's largest EV manufacturer, sell for less than $11,000 — far below comparable American models.
- And China is already on America's doorstep, with Chinese imports now accounting for 20% of new car sales in Mexico.
Threat level: It's only a matter of time, Farley says, before Chinese manufacturers set up factories in Mexico and begin shipping EVs to the U.S.
- Ford's answer is to attack the EV market with its next generation of vehicles from two angles, Farley said.
- "We're now betting on an affordable platform with multiple vehicles. And we're betting on commercial vehicles."
