Ford’s CEO Discusses Company Overhaul Amidst Competitive Pressure
Ford’s CEO, Jim Farley, recently expressed how competition in the automotive industry has made him feel quite humbled. He realized the necessity for significant changes within Ford, recognizing that failing to adapt could mean falling behind.
On a recent Tuesday, he candidly admitted to feeling “very humbled” after Ford’s engineering team took apart the original Model 3 Tesla along with various electric cars from China. The differences they observed were startling and led to a major shift in Ford’s approach to manufacturing.
The wake-up call came when Ford’s engineers compared Tesla’s Model 3 to their own Mustang Mach-E, which is the second-best-selling electric vehicle in the U.S. The comparisons were quite stark, as Farley noted.
“Taking apart my first Model 3 was an eye-opener. It was truly shocking what I discovered,” Farley shared during a podcast titled “Office Hours: Business Edition.” He mentioned that the wiring harness for the Mach-E is roughly 1.6 kilometers longer than Tesla’s version, which adds an extra 70 pounds to the vehicle’s weight. Since every pound of battery capacity in an electric vehicle comes at a cost, this added weight translates to an additional $200 expense per battery for Ford.
This realization highlighted the extent to which Ford needed to catch up, and Farley acknowledged that companies relying on traditional manufacturing methods were lagging significantly.
“An EV’s hefty battery changes everything,” he remarked. The findings from breaking down these competing models played a crucial role in Ford’s decision to split its operations into two distinct segments—Model E, focused on EVs, and the Blue and Pro businesses—back in 2022.
Farley believed that a new structure was necessary because the electric vehicle market demands a fundamentally different approach. This restructuring did not come without significant costs; the Model E division reportedly experienced losses exceeding $5 billion in 2024, and similar challenges are anticipated this year. Nonetheless, Farley remains unrepentant about this move.
“We knew it would be tough,” he stated on the podcast, emphasizing the importance of accountability within Ford’s EV sector.
He also believes in addressing tough problems head-on and often in public, as it can lead to faster solutions. Despite facing significant challenges, Ford still ranks third in U.S. EV sales as of the third quarter of 2025, trailing behind only Tesla and Chevrolet. Still, the competition is intensifying, and the gap is growing.
Farley noted that American EV makers, including Ford, are at a disadvantage compared to Chinese counterparts, which now represent over half of the global EV market and are rapidly gaining ground in various regions, including Europe and South America.
The shift is evident in China, where companies like Xiaomi surpassed Tesla in deliveries, with around 49,000 EVs sold last month compared to Tesla’s 26,000.
Chinese brands like BYD and XPeng are also making significant strides, bolstered by substantial government support over the years. However, U.S. consumers can’t access these vehicles due to high tariffs on imports.
Last year, Ford’s president mentioned that the company even arranged for the daily use of a Chinese-made Xiaomi SU7 EV, a remark that sparked discussions given his leadership role in a traditional automaker. Farley stated, “I don’t want to give up,” reiterating his drive to stay competitive.
Critics pointed out that this choice could be seen as disrespectful to Ford’s workforce. Jason Isaacs from the American Energy Association called it a “slap in the face” to employees, highlighting the complexities of Farley’s strategy.
In his defense, Farley stated, “I aim to drive every competitor’s vehicle. Specs can only tell part of the story; you truly need to experience the competition to understand and succeed.” The Xiaomi SU7, while popular in China priced at $30,000, isn’t available in the U.S. due to tariff and compatibility issues.
Throughout this narrative, Farley maintains a strong vision for Ford, referring to the company as an “industry giant” and likening it to the “Apple of China.”
