Ford CEO Jim Farley’s recent positive comments about China’s growing EV fleet may have been the catalyst for talks with some Chinese automakers about potential production partnerships.
Ford CEO Jim Farley’s offered an honest assessment of China’s electric vehicle makers in recent months.
A couple of days after media reports of discussions between Chinese EV makers Xiaomi Corp. and BYD Co., media reports claim the automaker is in talks with Geely, which owns Volvo Cars, about partnering in Europe on new vehicle production as well as technology sharing.
According to a Reuters report, the two sides are exploring ways to pair up and save on manufacturing and technology costs. The early discussions are focused on Geely using Ford plants to build vehicles for sale in Europe. The two companies reportedly are also looking for ways to share technology platforms, including autonomous driving tech, Reuters reported.
Neither company has confirmed talks, although representatives have traveled to China and Michigan to engage in discussions. The discussions have been ongoing for several months, but they appear to be focused on Europe.
Coming to America
There has been plenty of discussion in recent months about what many see as inevitable: Chinese automakers selling vehicles directly in the U.S. It’s unclear if there any talks about a partnership for the U.S. market between Ford and Geely.
There are differences on Ford’s Chinese products, such a swing door with spare tire. The Chinese models also get a LIDAR sensor on the roof.
Farley’s repeatedly told the media in recent months he believes China’s EV segment is superior to that of the U.S., and that it’s going to be difficult to catch up. The concerns about China selling vehicles in the U.S. were heightened when Canada agreed to lower the tariffs on certain China-made vehicles from 100% to 5.9%.
The move, which would eventually allow up to 70,000 vehicles to be imported from China using the lower tariff rate, drew the ire of President Donald Trump, who vowed to raise tariffs on Canadian goods coming into the U.S. to 100% unless the Canada changed course.
Canadian officials noted the deal with China didn’t violate any trade agreements with the U.S., including the USMC Free Trade Agreement Trump negotiated during his first term as president.
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New path
Chinese automakers are rolling out new products like this Geely Emgrand EV at a rapid pace.
Many believe that the quickest way for Chinese automakers to begin selling vehicles in the U.S. is to simply start building them here. Trump has suggested he’s open to that scenario. However, using existing facilities of U.S. automakers, such as Ford, might also be a way to skirt the 100% tariff on vehicles made by Chinese automakers exported to the U.S.
For reportedly held talks with Xiaomi and BYD, according to the Financial Times. According to the publication, Ford and Xiaomi were discussing a potential joint venture to build electric vehicles in the U.S. Earlier talks with BYD were centered on a similar strategy, although Ford and Xiaomi denied the report while BYD declined to comment to the Financial Times.
For now, the talks between Geely and Ford are focused on EV production, but solely in Europe, specifically Ford’s plant in Valencia, Spain. If the two sides reach agreement, it would help Ford deal with underutilization and allow Geely to avoid a 37.6% tariff on EVs imported into Europe from China.
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