Despite plans to cut back on the region, Ford is planning to use the Chinese market as a “listening post” to help the automaker better understand EV battery technology.
According to CEO Jim Farley, from Financial TimesFord takes a more aggressive approach in China amid growing competition from domestic EV makers.
Rather than pouring money into the region like Volkswagen, Ford plans to focus on less dangerous commercial vehicles like delivery vans, as it announced earlier this year that it would invest 1 billion euros (about $1.1 billion) to set up a new EV development center.
After watching domestic automakers in China win buyers from foreign brands, Farley says there’s no guarantee he’ll win them back even if he launches new passenger EVs in the region:
If they reinvest in a new round of EVs in China, there is no guarantee, or any data, that Western companies will win.
Older automakers are losing market share in China to cheaper and, in some cases, more tech-savvy EVs. For example, China’s largest EV maker, Baidu, overtook Volkswagen as the top-selling brand in Q1.
Ford will study EV battery technology while it is coming back to China.
After seeing its market share halve since 2016, Ford is ramping up its strategy in the region.
We have been, for the past two years, really looking at our China business. And now we have decided where our strategy will be, and it will be a very low investment, a more focused investment.
Farley declined to comment, though local reports said Ford was preparing to cut 1,300 jobs this week.
Fairley said the automaker would use China as a “listening post” instead of pulling out of the region entirely.
We don’t want to leave China like others because of the battery technology, the digital experience of the user. . . It is among the best in the world.
This is an idea that Farley has repeated many times now. On the company’s Q1 earnings call, Farley said the China visit was “a true story”:
It’s interesting to see how customers aren’t attracted to traditional luxury brands with EVs or hardware design.
Instead, he says, “the best new brands are delivering integrated digital, retail, lifestyle and software-defined experiences.”
Ford may be taking the modern route here by doubling down on what it knows in commercial vehicles and going back to where it’s been missing. Instead of bucking the trend, Ford plans to sit back and study the game from the inside to see how EV makers in China do.
Chinese-made EVs are beginning to dominate key import markets. For example, in the first three months of the year, 28.2% of electric cars imported into Germany came from China, which tripled from 7.8% last year.
Ford is playing the long game by studying which strategies work best and planning to implement them in its own markets, which has the advantage.
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