Ford CEO Jim Farley revealed in an upcoming podcast interview that after dissecting electric vehicles (EVs) from Tesla Motors and Chinese automakers, he realized how far ahead these competitors' technologies were—a "shocking" realization that prompted him to overhaul the company.
"When we tore down the first Tesla Model 3 and started dismantling Chinese cars, I felt deeply ashamed. What we discovered upon disassembling them was truly astonishing," Farley said in the interview, set to air on Wednesday U.S. time.
Farley noted that the Ford Mustang Mach-E used about 1.6 kilometers more wiring than Tesla's models, adding unnecessary weight and requiring larger, more expensive batteries.
Dismantling competitors' vehicles is a common practice in the auto industry. Xiaomi CEO Lei Jun disclosed in September that his team had purchased three Tesla Model Ys to study each component.
Farley, who has led Ford since 2020, said these teardowns convinced him that the company must adapt to face new rivals. In 2022, he spun off Ford's EV operations into a new division called Model E. The unit lost over $5 billion in 2024 and is expected to face similar losses this year, but Farley stands by the decision.
"From a business perspective, I knew this would be brutal," he said in the podcast, emphasizing the importance of accountability to investors.
"My philosophy is to tackle the toughest problems as quickly as possible, sometimes publicly, because that accelerates solutions," Farley added.
China's EV Revolution Farley has repeatedly warned about the rise of Chinese EVs. In June, he called Chinese EVs "far superior" to Western counterparts, and last month, he stated that brands like BYD "completely dominate" the global EV market.
Yet, Farley is also an admirer of Chinese EVs. In a past interview, he mentioned owning a Xiaomi-produced EV for six months and not wanting to give it up.
"EVs are exploding in China," Farley said in the latest interview. "We can't abandon EVs—if we want to be a global company, I won't cede this market to the Chinese."
Despite this, Ford's EV journey in the U.S. remains rocky. While Blue Oval reported record U.S. EV sales in Q3 due to buyers rushing before federal tax credits expired, Farley told investors last month that he expects the U.S. EV market share to hover around 5% in the near term as demand slows.
"We now know the U.S. EV market is nothing like what we imagined," Farley said, noting consumers prefer affordable EVs over "$70,000–$80,000" models.
To adapt, Ford has revised its EV strategy again. In August, Farley unveiled a new EV production line aimed at competing with BYD and Tesla. The first vehicle from this revamped line—a $30,000 midsize truck—is expected to launch in 2027.