Ford CEO Jim Farley recently disclosed his fascination with the Chinese electric vehicle (EV) landscape after spending months driving a Xiaomi SU7. This bold move underscores the gap between American and Chinese automakers in the EV space and raises pressing questions about the future of U.S. electric vehicle development. Farley’s appreciation for the Xiaomi SU7, a sleek Chinese EV, has sparked discussions across the industry, suggesting a need for accelerated innovation among Western automakers.
Farley, known for his dedication to the American automotive scene, stunned many by revealing he’s been driving the Xiaomi SU7, a car imported directly from Shanghai. Xiaomi, one of China’s largest tech giants, introduced the SU7 in late 2023, and the model quickly became a bestseller, selling out its entire 2024 production run within just 24 hours. The car has a six-month waiting list, a testament to its popularity in China.
“I’ve had two trips to China in the last two years, and each one was an epiphany,” Farley remarked on the Everything Electric Show podcast, emphasising how impressed he was with the Chinese automaker’s advancements. “In China, companies like Huawei and Xiaomi are fully integrated into the vehicle industry, unlike the Western market where the auto and tech sectors remain largely separate.”
The Xiaomi SU7 is the first passenger car from Xiaomi, a company renowned for its smartphones and e-scooters. The car is available in two versions: the Standard model, offering a range of 350 kilometres, and the Max model, with an impressive 510 kilometres. Priced at around $30,000, the Xiaomi SU7 is designed to be both affordable and technologically advanced, bridging the gap between modern technology and accessible pricing.
Farley explained his preference, saying, “I don’t like talking about the competition so much, but I drive a Xiaomi, and I don’t want to give it up.” The car’s affordability, advanced software, and integration with Xiaomi’s other tech offerings make it a standout among EVs—a concept that Farley finds inspiring.
Farley’s enthusiasm for Xiaomi highlights a growing disparity: Chinese automakers, having prioritized EV technology for over a decade, are years ahead of their Western counterparts. InsideEVs recently discovered in a Shanghai study that Chinese brands surpass American and European manufacturers in affordability, battery technology, software integration, and overall range.
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This gap in progress is largely inaccessible to U.S. consumers due to high tariffs on Chinese imports. The concern among policymakers is that allowing Chinese EVs to enter the American market could devastate domestic automakers by offering superior products at competitive prices. Farley echoed these concerns last month, labelling Chinese automakers as an “existential threat” to American manufacturers.
To bridge this technology gap, Ford has established a special team called Skunk Works in California, focusing on next-generation EV development. The Skunk Works project aims to create a new EV platform targeting a $25,000 price point—a feat that would significantly increase affordability for American consumers.
Farley explained, “We needed an entirely new approach to compete with companies like BYD and Xiaomi, who have years of head start in the EV sector. The institutional model wasn’t going to work, so we adopted the Skunk Works approach pioneered by Lockheed’s Kelly Johnson.”
Ford’s Skunk Works team operates independently, with Farley noting that even his employee badge doesn’t grant him access to the facility. The team’s goal is to foster a startup-like environment to cultivate innovation, similar to how tech companies operate in Silicon Valley.
Price is a major differentiator between Chinese and American EVs. In China, automakers like BYD offer EVs for as little as $10,000. In contrast, the average price of an EV in the U.S. is around $55,000. The Ford F-150 Lightning starts at $54,995, while the Mustang Mach-E starts at $43,000. Despite its success as a best-selling electric truck, Ford has struggled to lower production costs to a competitive level.
“We found ourselves with a cost gap of around $20,000 to $30,000 between what it cost to produce the vehicle and what customers were willing to pay,” Farley noted. This revelation underscores the challenges American automakers face in making EVs both affordable and profitable.
Ford has seen notable success with models like the F-150 Lightning, which held the title of best-selling electric truck until it was surpassed by the Tesla Cybertruck. However, the company has also encountered setbacks in its EV strategy, including the cancellation of planned fully electric SUVs in favour of hybrids. This shift is partially due to evolving customer preferences, with more mainstream consumers seeking practical options at accessible prices rather than early adopters’ higher tolerance for premium EV costs.
Acknowledging these challenges, Farley noted, “We got real about what the mainstream customer wants and the price point they’re willing to accept. It’s been a learning curve, but we’re committed to developing an EV platform that meets consumer expectations for affordability and quality.”
Ford expects to launch a more affordable midsize electric pickup truck by 2027, which could make EVs more accessible to the general public. The company’s pivot reflects a new, customer-centred approach to EV development aimed at addressing real-world needs and overcoming the price challenges currently limiting widespread EV adoption.
Farley’s decision to drive a Xiaomi EV underscores a larger trend that Chinese automakers are leading the EV market, with American companies scrambling to catch up. However, with initiatives like Ford’s Skunk Works and its dedication to affordable EV models, there’s hope that Western automakers can bridge the gap and meet consumer demand for accessible, high-quality EVs.
The path forward is challenging, but Farley’s insights and admiration for the Xiaomi SU7 serve as a wake-up call for the entire American automotive industry. If they don’t innovate quickly, Chinese manufacturers may dominate not only in Asia and Europe but possibly in North America as well. For Farley, the Xiaomi experience is more than just driving a car—it’s a lesson in how the future of mobility may be shaped.
