On February 13, 2023, Ford CEO Jim Farley announced at the automaker’s battery laboratory in the suburbs of Detroit that he would invest $3.5 billion in a new electric vehicle battery factory in the state to produce lithium iron phosphate batteries or LFP batteries.
Michael Whelan/CNBC
Detroit- ford motor company The Biggest Competitor in EVs Is Not the U.S. Leader tesla or crosstown rival General Motorsit is the Chinese automaker, Chief Executive Jim Farley said on Thursday.
Farley says Chinese firms like Warren Buffett support BYD Leading the big U.S. automakers and startups in electric vehicles, especially battery chemistry and other emerging technologies.
“We see the Chinese as our main competitor, not GM or Toyota,” Farley said at the Morgan Stanley Sustainable Finance Summit.
He cited BYD as an example of how the Chinese automaker has successfully developed and sold electric vehicles — first in China and now in Europe.
“I like BYD. Totally vertically integrated, aggressive…very, very impressive company. They’ve always been committed to electric vehicles,” Farley said when asked which company got it right.
BYD’s new luxury brand, Yangwang, is selling its first model, the U8, for more than 1 million yuan ($160,000).
Financial Channel | Evelyn Cheng
BYD’s sales in China grew from 445,000 vehicles in 2015 to nearly 2 million last year, making it one of the top five automakers in China by sales, according to LMC Automotive.
Farley’s comments echo what industry experts and investors have said about the growth of BYD and other Chinese automakers that have received state support in China.
“BYD has a huge position, both from an EV standpoint and from a battery production side,” Philip Ripman, portfolio manager at Storebrand Asset Management, told CNBC Pro Talks last week.
Lippman, who manages the $1 billion Storebrand Global Solutions sustainable fund, highlighted BYD’s development of cheaper sodium-ion battery technology, which has the potential to replace lithium-ion batteries. These could become commonplace in BYD’s more affordable electric vehicles and help improve the automaker’s profit margins, he noted.
Farley also pointed to BYD’s batteries as having advantages over current U.S. lithium-ion battery industry standards.
Ford Mustang Mach-E unveiled at the New York International Auto Show on April 5, 2023 in Manhattan, New York City.
David Di Delgado | Reuters
Earlier this year, Ford announced a new partnership with China’s CATL, investing $3.5 billion in a new Michigan plant to produce cheaper batteries.
The plant will produce new lithium iron phosphate batteries (LFP), rather than the more expensive lithium-nickel-cobalt-manganese batteries the company currently uses. The plant is expected to open in 2026 and employ about 2,500 people, according to the Detroit automaker.
Farley touted BYD’s role in building the technology.
“BYD is now much bigger than Tesla, and they developed LFP technology, which is a better battery,” Farley said.
Ford’s deal with CATL has come under fire amid tensions between the U.S. and China.Specifically, Marco Rubio ask the biden administration Review of transactions, including Ford’s licensing of CATL’s technology. The Detroit automaker will own the new plant through a wholly owned subsidiary rather than a joint venture with CATL.
Farley said consumers would be “screwed” by higher prices if politics blocked the use of cheaper electric vehicle technology in the United States.
“We have to figure this out in our country. I think they’re very interesting companies,” Farley said.