In a bid to solidify its position in the electric vehicle (EV) market and take on Chinese competitors, Ford CEO Jim Farley has expressed openness to partnering with rival automakers. Speaking at a Wolfe Research conference, Farley highlighted the significant risk of not being able to compete with Chinese EV manufacturers, stating that "20% to 30%" of a company's revenue is at stake in such a scenario.

Drawing from Ford's previous challenges with Japanese and South Korean automakers, Farley emphasized the need to address this problem swiftly. To that end, Ford has made the strategic decision to focus on smaller EV platforms. Since mid-2023, the company has committed to offering EVs at the same price range as hybrid vehicles, recognizing the limited affordability of customers.

While larger EVs, such as the F-150 Lightning, incur higher production costs, Farley acknowledged that customers demand functionality and utility in such models. In contrast, smaller EVs, like those comparable to the Ford Escape, offer a compelling cost advantage. Farley explained that these smaller EVs have "dramatically better operating costs" compared to popular traditional models such as the Toyota Corolla, Honda Civic, or even Ford's own Maverick.

Despite Ford's recent pivot towards more affordable EVs, Farley affirmed that the company has already made significant progress in this direction. He revealed that Ford has been working secretly on a low-cost EV platform and assembled a skilled team of engineers to develop it. The aim is to create a competitive offering to rival Chinese automakers, specifically highlighting BYD's Seagull EV, which can be manufactured for just $9,000 to $11,000 in materials.

BYD, a major player in the Chinese market, is even venturing into international markets, with plans to launch its low-cost Seagull (Dolphin Mini) in Brazil and potentially establish a manufacturing plant in Mexico for exporting to the US.

Ford's Model e EV unit COO, Marin Gjaja, emphasized the urgency of Ford's EV initiatives, referring to Chinese EVs as a "colossal strategic threat." Gjaja warned that Ford's future as a company is dependent on their ability to ramp up EV production and innovation, conceding that Chinese automakers are currently ahead in terms of EV technology.

However, despite these urgent calls for action, Ford is making some adjustments to its EV production plans. The company will be cutting EV production in the US and delaying around $12 billion in EV spending. Ford's CFO, John Lawler, explained that this decision aims to achieve a balanced approach to production, sales growth, and profitability. This includes scaling back production plans at the Marshall plant by approximately 50%.

In the midst of these challenges, overseas competitors like Volvo are surging ahead with the introduction of new EV models, such as the EX30, which starts at $35,000.

As Ford navigates the evolving landscape of the EV market, it is clear that collaboration and innovation are key to staying competitive, particularly against Chinese automakers. By focusing on affordability and functionality in smaller EVs, Ford aims to capture a broader market share while making strides in technological advancements in the industry.