Ford chief admits that China leads the US in EV battery development
Ford CEO Jim Farley admitted that the Chinese car industry poses a threat to Western interests due to its EV battery developments, estimating that it now leads the US by at least a decade.
The EV industry is blighted by concerns over how quickly the Chinese auto industry has developed next-generation EV batteries that far surpass anything commercially available in Western markets. Ford CEO Jim Farley, speaking to The New York Times, made an admission that heading off the threat will require taking advantage of China’s technical expertise.
Farley said, “The way we compete with them is to get access to their IP just the way they needed ours 20 years ago, and then use our innovative ecosystem and American ingenuity and our great scale and our intimacy with the customer to beat them globally.”
Ford is referencing the fact that China already took advantage of American IP some time ago to supercharge its own development efforts. Leading EV battery brand CATL’s technology was actually developed in the US but was then purchased by Chinese investors for relative pennies. Today, this investment has catapulted China to the top of EV battery development globally.
Farley made it clear in no uncertain terms that “It will be one of the most important races to save our industrial economy.”
Even Ford themselves are relying on Chinese technology simply to keep up in the race. Currently, Ford is working on the BlueOval Battery Pack, but it’s still only in mid-build and isn’t expected to be completed until 2026, when it will churn out thousands of the latest Lithium-Ion Phosphate (LFP) batteries. However, the venture relies entirely on technology coming from CATL.
Although commentators may see this as an enormous misstep, it’s vital to mention that, at the time, nobody could have predicted how big EVs would become in the global auto industry. The Chinese gambled on this assumption, and it’s a wager that has paid off. Today, the Chinese are estimated to control 83% of the entire global lithium-ion battery manufacturing capacity.
While tariffs on Chinese EVs continue to protect auto manufacturers like Ford, it’s obvious this remains nothing more than a band-aid as Chinese costs rapidly decline, potentially negating the costs of existing tariffs. It will be up to automakers like Ford to do the heavy lifting and catch up with their Chinese counterparts.
