When it comes to electric vehicle sales, China has been dominating the market: EVs from China account for nearly 70% of global EV sales. Even Ford CEO Jim Farley is a fan. He’s been driving—and loving—an EV made by Chinese tech giant Xiaomi.

“I don’t like talking about the competition so much, but I drive the Xiaomi,” Farley said on this week’s Fully Charged Podcast, hosted by British actor and presenter Robert Llewellyn. “We flew one from Shanghai to Chicago, and I’ve been driving it for six months now and I don’t want to give it up.” 

The Xioami is just one affordable Chinese EV

Xiaomi is an electronics manufacturer based in China; it’s the second-largest smartphone manufacturer in the world. It also makes software, home appliances, and EVs. The company has just one EV model currently: the Xiaomi SU7, a sedan that comes in two versions: Standard (350 kilometers of range) and Max (510 kilometers of range). It has a starting price of around $30,000. 

China is known for affordable EVs, with some from manufacturer BYD as cheap as $10,000. In the U.S., the average EV price is closer to $55,000. The Ford F-150 Lightning starts at $54,995, while Ford’s electric SUV, the Mustang Mach-E, starts around $43,000.

Ford says it is working on a more affordable EV. It hasn’t yet released details on exactly how much that new model will cost, but previously the company gave a price of around $25,000 as a “general target” of what its new low-cost EV platform could allow for. To make that a reality, Ford established a Skunk Works team in California in 2022 focused on next-generation vehicle development. 

But Chinese auto manufacturers have had a headstart on EV development, which is why they’re so cost-competitive. “China made this commitment more than a decade ago, far before any of the Western countries fell in love with pure electrification,” Farley said on that podcast. “They have IP that the rest of the world has not developed.” 

Strict tariffs, though, mean those affordable EVs aren’t available to U.S. consumers. Chinese EVs have been taking off in the European market, and automakers there are starting to respond with their own more affordable options. Renault recently showed a 25,000-euro compact EV at the Paris Motor Show.

How Ford is pushing for affordable EVs

Ford has been watching that Chinese EV advancement happen, Farley said. He’s even taken recent trips to China himself that he said were “literally epiphanies.” 

To compete with Xiaomi, BYD, and other Chinese EV manufacturers, Farley said he knew they’d have to focus on the technological developments from scratch. “I felt like the institution of Ford would have a really tough time competing with BYD, so we needed a ground-up team with a similar approach as the Kelly Johnson SR-71 Skunk Works,” he said, referencing the Lockheed engineer known for his SR-71 aircraft design, who is also the creator of the Skunk Works approach.

Farley said his employee badge doesn’t even work at the Ford California Skunk Works building. “That’s how extreme of a different approach we needed to compete against BYD.”

Still, Ford has had some EV success. The company’s F-150 Lightning became the best-selling electric truck after it debuted in 2022 (though it has recently been dethroned by the Tesla Cybertruck). Farley noted that Ford has been number two to Tesla in terms of overall EV sales in the U.S. for the past two years. (Ford declined to comment further on Farley’s podcast appearance, but the company did point to a tweet the CEO made about how he tries to drive “everything we compete against.”)

But Ford has also had some EV issues. It recently canceled some planned fully electric SUVs to instead pursue hybrid models. And after pausing production because of the semiconductor shortage that began March 2020 and stretched through the pandemic, “we found out that the mainstream customers were completely different to the ones who bought during COVID, and not willing to pay any premium for an EV,” Farley said. (Early adopters of new tech like EVs are usually more willing to pay higher costs and are more risk-tolerant, whereas the second wave of customers are more pragmatic.)

During that time, Ford also wasn’t experimenting with battery chemistry or advanced manufacturing as Chinese companies were. “We found ourselves upside down by $20,000 or $30,000, in terms of what the customer was willing to pay versus what it cost.”

After that, “we got real,” Farley added, in terms of Ford’s plans to design a more affordable EV. The company has previously said it expects a more affordable midsize electric pickup truck to launch in 2027.