theglobalsun – Ford CEO Jim Farley recently described China’s electric vehicle industry as “the most humbling thing I have ever seen.” Speaking at the Aspen Ideas Festival, Farley praised China’s dominance in EV manufacturing and superior technology. He pointed out that 70% of the world’s electric vehicles come from China, and their in-car digital systems surpass Western offerings.
Farley explained how Chinese EVs seamlessly integrate users’ digital lives without requiring phone pairing. He emphasized that China’s vehicles not only cost less but also offer better quality compared to Western models. This gap has impacted U.S. automakers, including Ford, which abandoned plans for a three-row electric SUV in August 2024 due to China’s cost advantages.
A key factor behind China’s EV lead is its access to cheaper batteries. Farley stated, “An affordable electric vehicle starts with an affordable battery.” China dominates global battery mineral mining and production. Its companies are expanding battery plants worldwide, including a major new facility opening in Indonesia by 2026.
The Chinese government also provides strong subsidies for the EV industry. According to the Carnegie Endowment for International Peace, this financial support places U.S. manufacturers at a competitive disadvantage. Farley personally experienced China’s EV advances while driving a Xiaomi SU7 for six months. He praised the vehicle and said he “doesn’t want to give it back.”
However, Xiaomi EVs are not sold in the U.S. due to a 100% import tariff on Chinese electric vehicles. Additionally, by 2027, all connected cars made or owned by Chinese or Russian companies will be banned from operating in the U.S., further limiting market access for Chinese EVs.
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Last week, Xiaomi launched its second electric vehicle, the YU7, priced around $35,000. This price undercuts Tesla’s Model Y, which starts at $44,990. The YU7 boasts an impressive 519-mile range based on the Chinese CLTC testing cycle, significantly higher than the Model Y’s EPA-rated 357 miles.
Xiaomi markets the YU7 as a high-performance luxury SUV. By contrast, other U.S. electric vehicles near the $35,000 price point, such as the Chevrolet Equinox EV and Hyundai Kona, are not positioned as luxury models. This means Chinese buyers get more features and performance for a lower price than their Western counterparts.
The Biden administration has sought to boost the U.S. EV industry with billions allocated to battery production and research. It also set up a $5 billion fund for nationwide EV charging infrastructure and a $7,500 federal tax credit for qualifying EV buyers.
However, the Trump administration took a different approach, freezing funds for the charging network after taking office in January. Although a federal judge recently ordered the release of funds for 14 states, the EV tax credit is set to expire this year under a provision in the “Big Beautiful Bill.” The bill also introduces new taxes on wind and solar energy.
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Tesla CEO Elon Musk criticized the bill on X, calling it “utterly insane and destructive” for harming future industries while supporting outdated ones. Musk and Farley remain competitors rather than allies. Farley prefers Waymo’s LiDAR-based autonomous vehicle technology over Tesla’s camera-only Autopilot system. He explained that LiDAR systems are more reliable in various conditions.
Farley confirmed discussions with Musk about licensing Tesla’s technology but made it clear he favors Waymo’s approach for robotaxis. The U.S. EV market faces tough competition from China, and political decisions will play a critical role in shaping the future of American automakers.
