background image

Ford's retreat: the challenges of competing in China's EV market

author image

By illuminem

· 2 min read

To bring you all sustainability information in one place, we are testing a new type of short summary called “illuminem Briefings”. Please let us know your feedback!

🗞️ Driving the news: Ford plans to reduce future investments in China, citing intense competition from local electric vehicle (EV) manufacturers
• Ford's market share in China has halved since 2016, with vehicle sales falling below 500,000 last year for the first time in a decade
Jim Farley, Ford's CEO, expressed doubt over the prospects of Western automakers in China's EV market, highlighting the success of local brands like BYD, Great Wall, SAIC, and Changan
Chinese brands today seemingly offer cheaper or superior EVs

🌎 Why does it matter for the planet: The mobility sector corresponds to 17% of the global emission, and  global competition in the development of EVs is considered positive for the success of the energy transition
• The Chinese trend, where non-native carmakers dropped from 25.7% in 2021 to 19.0% in 2022, may signal a less competitive EV market - with unknown repercussions

🔭 The context: China is rapidly establishing itself as the largest market for EVs, with Chinese brands aiming for global dominance
According to the International Energy Agency, EV sales accounted for 29% of total car sales in China in 2022, compared to 21% in Europe and just 8% in the US
BYD, China’s leading electric vehicle manufacturer, has surpassed Tesla in terms of global EV market share, jumping from 5% in Q1-21 (with Tesla at 17%) to a robust 20% by Q4-22 (Tesla fell to 12%)

⏭️ What's next: Ford's plans to downsize its operations in China reflect a broader strategy the company has implemented in regions like Europe, focusing on higher-margin vehicles
Instead of investing heavily in EV production in China, Ford will focus on commercial vehicles and use the market as a "listening post" for battery technology trends

💬 One quote: "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." (Jim Farley, CEO of Ford)

The full-length article was published in the Financial Times on May 16, 2023.

Did you enjoy this illuminem voice? Support us by sharing this article!
author photo

About the author

illuminem's editorial team - delivering the most effective, updated, and comprehensive access to sustainability & energy information.

Follow us on Linkedin, Instagram & Twitter

Other illuminem Voices

Related Posts

You cannot miss it!

Weekly. Free. Your Top 10 Sustainability & Energy Posts.

You can unsubscribe at any time (read our privacy policy)