Ford CEO Jim Farley announced a new $3.5 billion electric vehicle battery plant in the state to manufacture lithium iron phosphate (LFP) batteries at the automaker’s battery lab in suburban Detroit on February 13, 2023 .
Michael Wayland/CNBC
DETROIT – Ford Motors The biggest EV competitor is not the US leader Tesla or Crosstown Rival General Motors“It’s Chinese automakers,” CEO Jim Farley said Thursday.
Farley said Chinese companies like Warren Buffett would be supported BYD are ahead of the big US automakers and startups in electric vehicles, particularly in battery chemistry and other emerging technologies.
“We see the Chinese as our main competitors, not GM or Toyota,” Farley said during the Morgan Stanley Sustainable Finance Summit.
He cited BYD as a prime example of a Chinese automaker that has successfully developed and sold electric vehicles – first in China and now in Europe.
“I like BYD. Totally vertically integrated, aggressive… a very, very impressive company. And they’ve always been committed to electrical engineering,” Farley said when asked which company is getting electric vehicles right.
BYD’s new luxury brand Yangwang sells its first model, the U8, for more than 1 million yuan ($160,000).
CNBC | Evelyn Cheng
According to LMC Automotive, BYD increased its sales in China from 445,000 units in 2015 to almost 2 million last year, making it one of the top five automakers in China according to LMC Automotive.
Farley’s comments echo those of industry experts and investors on the growth of BYD and other Chinese government-backed automakers in China.
“BYD has a lot of value, both from an electric vehicle perspective and battery production perspective,” Philip Ripman, portfolio manager at Storebrand Asset Management, told CNBC Pro Talks last week.
Ripman, who manages $1 billion sustainable fund Storebrand Global Solutions, highlighted BYD’s developments in cheaper sodium-ion battery technology that could potentially replace lithium batteries. He pointed out that these could be prevalent in BYD’s lower-priced electric vehicles and could help boost the automaker’s profit margins.
Farley also noted BYD’s battery advantages compared to the current US industry standard for lithium-ion batteries.
The Ford Mustang Mach-E is unveiled at the New York International Auto Show on April 5, 2023 in Manhattan, New York City.
David Dee Delgado | Reuters
Ford earlier this year announced a new collaboration with China’s Contemporary Amperex Technology Co. (CATL) for a new $3.5 billion plant in Michigan to build cheaper batteries.
The plant will produce new lithium-iron phosphate (LFP) batteries, as opposed to the more expensive nickel-cobalt-manganese batteries with lithium that the company is currently using. According to the Detroit automaker, it is expected to open in 2026 and will employ around 2,500 people.
Farley emphasized BYD’s role in developing this technology.
“The size of BYD is now much larger than Tesla’s, and they developed LFP technology, which is a better battery,” Farley said.
The Ford-CATL deal has been criticized amid US-China tensions. In particular, Marco Rubio called on the Biden administration to review the deal that would see Ford licensing CATL technologies. The Detroit automaker will own the new plant through a wholly owned subsidiary rather than operate it as a joint venture with CATL.
Farley said that if policies hindered the US from allowing cheaper EV technologies, the consumer would be “fooled” with higher prices.
“We have to do that in our country. And I think these are really interesting companies,” Farley said.
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