CEO of Ford Company drives Xiaomi EV for 6 months and “doesn’t want to part with it”
The CEO of Ford, Jim Farley, said in a recent podcast interview that he was driving an electric car made by the Chinese electronics company Xiaomi and “does not want to give it up.” The Xiaomi SU7 model resembles a Porsche Panamera sedan and starts at around $30,300, with the top model priced at around $42,100.
“This Xiaomi car is amazing,” Farley said. “They sell ten to twenty thousand of them monthly.” “I don’t like talking about competition much, but we flew a plane (SU7) from Shanghai to Chicago and I’ve been driving it for six months, and I don’t want to give it up.”
Farley did not mention which version of the SU7 he imported, but it is natural for car manufacturers to test their competitors’ cars to better understand their challenges. Recently, the CEO of Rivian, RJ Scaringe, mentioned that he knew that his small trucks were being demolished by auto manufacturers in China.
Xiaomi is known for producing smartphones and was once referred to as “China’s Apple” due to its rapid rise in the market there. It lags behind Huawei today but is still a major player in the Chinese smartphone market. It also sells a range of other electronic devices including TVs and smart speakers that can all work together within the Xiaomi ecosystem.
It may seem strange at first for a phone manufacturer to enter the electric car market, but it is not uncommon when you consider that BYD, one of the largest electric car manufacturers in China, started manufacturing batteries for companies like Motorola. Electric cars, ultimately, are essentially smartphones on wheels, and the toughest challenge car manufacturers had to overcome was battery chemistry and pricing.
The SU7 is fully integrated with Xiaomi’s other products, allowing you to remotely control home devices from the car, for example. It features a 16.1-inch entertainment information screen with a smartphone mirror and Xiaomi Pilot software, a driving assistance program. The car can accelerate from 0 to 62 mph in 2.7 seconds, outperforming the Tesla Model 3’s 3.1-second time. Xiaomi claims that the standard model can travel 435 miles on a charge, although this figure may not be reliable.
Chinese companies have achieved what Ford and Tesla have struggled to do – produce cheap electric cars that are already profitable. This is partly due to the Chinese Communist Party’s electric vehicle-friendly policies, access to battery raw materials, and the massive scale of local battery production. The goal seems to be to displace the United States as a dominant global player in the future of the auto industry and enhance China’s soft power abroad. BYD, which briefly surpassed Tesla in 2023 as the world’s largest electric car maker, has focused on growth in emerging markets, providing affordable electric vehicles and opening factories in places like Brazil.
Unfortunately, due to geopolitical issues, the American market is currently closed to Chinese car manufacturers, and it does not seem that either side is willing to change that. Last September, the Biden administration imposed a 100% tariff on Chinese electric vehicles sold in the United States, even though no Chinese automaker sells vehicles there.
However, one of the cheapest Chinese electric cars, the BYD Seagull EV, starts at just $9,700, so considering the tariff, $20,000 for a 190-mile range electric car is not bad at all. It is sold in Mexico as the BYD Dolphin Mini, so you can drive south and get one, although the price is approaching $20,000 there, it is still a good deal.
Ford is struggling alongside other old car manufacturers in the United States to start their electric car business. Electric car sales have not declined, but growth has slowed down, and old companies rushed to reduce their ambitions as they slowly move towards profitability. Ford recently cancelled a three-row electric SUV and postponed a small electric truck until 2027. The company announced a loss of $1.3 billion in the Model e EV segment in the first quarter of 2024 and a loss of $1.1 billion in the second quarter.
Tesla is the only company that has been able to achieve profitability in the U.S. electric car market, but CEO Elon Musk said in an earnings call this week that the company will not launch a $25,000 car as many had hoped for. The company’s sales will remain fairly flat in 2024, which is far from the 50% annual growth Musk expected not long ago. Musk hopes that growth will rebound by 20 to 30% in 2025, but the company still sells far fewer cars than companies like Toyota.
Ultimately, building electric cars requires large upfront investments and years of patience to achieve returns. There is a small “chicken and egg” problem – selling a lot of cost-effective electric vehicles requires a large scale to lower costs, but selling a lot of electric vehicles requires the cars, as you know, to be affordable to a sufficient number of people. Trump said that if he becomes president again, he will reduce tax breaks and other incentives supporting the electric car industry. Do not expect cheap Chinese electric cars like the Xiaomi SU7 to appear in the United States anytime soon.