In a recent interview on “The Fully Charged Podcast,” Ford CEO Jim Farley shared his experience with Xiaomi’s electric vehicle, the Speed Ultra 7 (SU7), revealing his genuine enthusiasm for the car. Farley disclosed that he has been driving the SU7 for six months, expressing a strong desire to hold onto it. “I don’t typically discuss competitors, but I drive the Xiaomi,” he remarked, noting that the car was flown from Shanghai to Chicago for his use.
The Xiaomi SU7 marks the company’s debut in the EV market and is available in three models: SU7, SU7 Pro, and SU7 Max. Although Farley didn’t specify which version he drives, he praised its performance and the impressive sales figures that Xiaomi has achieved.
Xiaomi’s Growing Market Presence
Farley highlighted Xiaomi’s success, stating, “It’s fantastic. They sell between 10,000 and 20,000 units a month and are sold out for six months.” He contrasted the attention around upcoming products like the rumored Apple Car with Xiaomi’s existing and successful vehicle, labeling it an “industry juggernaut.” The SU7, introduced in 2023, is designed as a performance-luxury sedan, comparable to a more affordable Porsche Taycan, and offers powerful engine options of 295 and 664 horsepower.
The Shift in the Automotive Landscape
Farley’s remarks underscore the significant advancements made by Chinese automakers in recent years. Once reliant on Western designs, these manufacturers, including Xiaomi, have evolved into formidable competitors. Llewellyn, the podcast host, noted the striking image of a Ford CEO driving a rival’s car, a testament to the changing dynamics of the automotive industry.
With 25 years of experience at Toyota, Farley possesses a unique perspective on industry evolution. He recalled Toyota’s humble beginnings in the U.S., where it was once seen as an obscure brand. “When I joined Toyota, there were only 500 employees, and we were a marginal player,” he said, reflecting on how Toyota’s rise caused significant shifts in the automotive landscape, particularly in Detroit, where American automakers lost market share.
Facing New Challenges from Chinese Brands
Today, Farley perceives a similar threat from Chinese automakers. He believes that Ford and its rivals face a situation reminiscent of the past when brands like Toyota and Honda surged ahead. To tackle this challenge, he has formed a “skunkworks” team within Ford to explore innovative strategies for competing with companies like Xiaomi and BYD.
After visiting China earlier this year, Farley expressed concern that the Chinese automotive industry presents an “existential threat” to Western manufacturers. Reports suggest that Farley and CFO John Lawler were impressed by the quality of Chinese EVs, including a vehicle from state-owned Changan Automobile. Lawler’s remark, “These guys are ahead of us,” emphasizes the urgency with which Ford must adapt.
Financial Hurdles for Xiaomi’s EV Division
Despite the popularity of the SU7, Xiaomi’s EV division is facing challenges. In its second-quarter earnings report, the company revealed a staggering loss of $252 million for its EV operations, equating to a loss of approximately $9,200 for each of the 27,307 SU7s shipped. Currently priced at around 215,900 yuan (about $30,000), the SU7 is exclusively available in China, yet Farley’s enthusiasm hints at its potential global appeal.
Farley’s insights come at a time when Chinese automakers continue to capture significant shares of the global EV market, accounting for 88% in Brazil and 70% in Thailand during the first quarter of 2024, according to ABI Research. This trend signals the increasing influence of Chinese brands worldwide.
For Ford, adapting to this new competitive landscape is crucial. After reporting a $1.14 billion loss in its EV segment in the second quarter of 2024, the company is shifting its strategy from fully electric SUVs to hybrid models, a move expected to cost nearly $2 billion.
