On May 26th, Ford CEO Jim Farley stated that the company’s biggest competitor in the electric vehicle field is not American leader Tesla or cross-town rival General Motors, but rather Chinese automakers.
At a sustainable finance summit held by Morgan Stanley in the United States, Fali, speaking of Chinese companies such as BYD supported by Warren Buffett, said that they are leading the way in electric vehicles, particularly in battery chemistry and other emerging technologies, ahead of large American car manufacturers and start-ups.
Farley said, “We think that Chinese automakers are our main competitors, not GM or Toyota.” He cited BYD as an example of a Chinese automaker that has successfully developed and sold electric vehicles, first in China and now in Europe.
When asked which company is doing the best in electric vehicles, Farley said, “I like BYD. This company is fully vertically integrated and aggressive, leaving a deep impression.”
Data from market forecasting service LMC Automotive shows that BYD’s sales in China have grown from 445,000 in 2015 to nearly 2 million last year, making it one of the top five automakers in China in terms of sales.
Farley’s comments are consistent with many industry experts and investors who are bullish on the future growth prospects of BYD and other Chinese automakers.
Philip Ripman, portfolio manager at Storebrand Asset Management, said last week, “BYD has a huge market share in both electric vehicles and battery production.”
Ripman manages the $1 billion Storebrand Global Solutions Sustainable Development Fund and emphasizes BYD’s development in cheaper sodium-ion battery technology that could replace lithium-ion batteries. He noted that these technologies could be used in BYD’s more affordable electric vehicles and help improve the company’s profit margins.
Farley also noted that BYD’s batteries are more advantageous than the current lithium-ion battery industry standard in the United States. Earlier this year, Ford announced a new partnership with Nidec Corporation and invested $3.5 billion to build a new factory in Michigan to produce cheaper batteries.
The factory will produce new lithium iron phosphate batteries instead of the more expensive lithium nickel cobalt manganese batteries currently used by Ford. The company expects the new factory to be operational by 2026 and employ about 2,500 people.
Farley praised BYD’s role in advancing this technological progress. “BYD is now much larger than Tesla and they have developed LFP technology, which is a better battery,” he said.
