Despite plans to scale back in the region, Ford is planning to use the market in China as a “listening post” to help the automaker better understand EV battery tech.
According to CEO Jim Farley, speaking with the Financial Times, Ford will use a concentrated approach in China amid growing competition from domestic EV makers.
Rather than pouring money into the region like Volkswagen, which revealed a €1 billion (around $1.1 billion) investment to establish a new EV development center earlier this year, Ford plans to focus on less risky commercial vehicles like delivery vans.
After seeing domestic automakers in China winning over buyers from foreign brands, Farley said that even if it were to launch new passenger EVs in the region, there’s no promise it would win them back, claiming:
If you just reinvest in a new cycle of EVs in China, there is no guarantee, or no data, that would suggest the western companies win.
Legacy automakers are losing market share to cheaper and, in some instances, more tech-savvy EVs in China. For example, China’s largest EV maker, BYD, surpassed Volkswagen in Q1 to become the top-selling brand.
Ford to study EV battery tech while scaling back in China
After seeing its market share halve since 2016, Ford is redeveloping its strategy in the region.
We have been for the last couple of years, really looking carefully at our China business. And now we have made up our mind where our strategy is going to be, and it will be a much lower investment, more focused investment.
Although local reports claimed Ford was preparing to cut 1,300 jobs this week, Farley declined to comment.
Farley said rather than pulling out of the region altogether, the automaker will use China as a “listening post” to gain deeper insights into EV and battery tech, claiming:
We don’t want to leave China like others have because the battery technology, the user digital experience . . . is among the best in the world.
This is an idea Farley has reiterated several times now. On the company’s Q1 earnings call, Farley said his visit to China was a “real epiphany,” claiming:
It’s interesting to see how customers are no longer just attracted to traditional luxury brands with EVs or even hardware design anymore.
Instead, he says, “The best new brands are offering integrated digital, retail, lifestyle and experience that are software defined.”
Electrek’s Take
Ford is likely taking the smart route here by doubling down on what it knows in commercial vehicles and scaling back on where it is losing. Rather than fighting the trend, Ford plans to sit back and study the game from the inside to see how EV makers in China are doing it.
EVs made in China are already beginning to take over key import markets. For example, in the first three months of the year, 28.2% of electric cars imported into Germany were from China, more than tripling from only 7.8% last year.
Ford is playing the long game by studying what tactics work best with plans to implement them in its home market, where it has the advantage.
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