Ford CEO admits he drives a Chinese electric vehicle and doesn't want to give it up

Warns the Middle Kingdom is drinking Detroit's milkshake at the moment

Jim Farley, CEO of Ford, has made a surprising confession - he has been driving a Chinese-made electric vehicle, and he loves it.

"I don't like talking about the competition so much, but I drive the Xiaomi," he said in the Everything Electric Show. "We flew one from Shanghai to Chicago, and I've been driving it for six months now, and I don't want to give it up."

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People have been talking about an Apple car for years, he said, but Chinese telco Xiaomi has already built one and it was a very nice ride. Xiaomi and Huawei are both major players in the electric vehicle market in a way that US companies have yet to emulate, Farley suggests.

Ford does have its finger in the electric car pie, with Farley pointing out it's the number two in the US marketplace. But when it comes to EVs, China is way ahead of Western manufacturers, he warned. Ten years ago, the Chinese government declared a policy on developing electric vehicles and batteries, and that's paying off, he opined.

"70 percent of all electric cars made on the globe are made in one country, China," he said.

"And they're starting to specialize where they have electric vehicles for long range travel, where the charging structure is not built out. One car goes 150 to 200 miles as an all electric car, and it has a small internal combustion engine that powers the batteries. One tank of gas gives a range of up to 1,000 to 1,200 kilometers."

At the moment, China has a lock on the supply chain in this sector, he warned. It has the battery technology, a grip on the rare earth market needed to produce them, and enough manufacturing capacity to meet global car demand while overwhelming Western carmakers with excess supply. While waiting lists for cars do exist in China, he said, the long-term capability to outproduce rivals will be telling, he explained.

Farley likened the situation to Toyota in the 1980s, a company that he served at for about 20 years. Initially they were a tiny car company producing ugly vehicles, but now it's a major player in the automotive business. But Japan's a small country, he said, and when the Chinese scale moves into the EV market, it's got a lot more muscle.

He also predicted that EV prices are going to come down - a lot. Mainstream buyers are no longer willing to pay a premium for electric vehicles, he explained. This may explain why Tesla is so keen to get into the lower end of the EV market, as the business explained on Wednesday.

There's also simplification savings to be made, he argued. EVs need 40 percent fewer parts and have fewer moving components that can go wrong. Batteries are a major factor in the cost of such vehicles, but China has the lead in intellectual property in that department, he suggested - for the moment at least.

"That's why we created the Skunk Works team in California, because I felt like the institution of Ford would have a really tough time competing," he said. "So we needed a ground-up team with a similar approach to Kelly Johnson's SR 71 Skunk Works in California. My badge doesn't even work there. I can't even get in the building."

We'll see what Ford comes up with, but in the short and medium term, China is the player to watch in the EV space it seems. ®

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