Jim Farley: Ford CEO on China – Beyond Demonization, Towards Learning and Competition
Admittedly, working and being educated in Silicon Valley, I don't typically follow Ford. But seeing Jim Farley, Ford's CEO, discuss a wide range of topics with Walter Isaacson at the Aspen Ideas Festival on June 29, 2025, was truly impactful for me. I gained immense respect for him, particularly his perspective on China. His insights, drawn from frequent visits, emphasized humility, learning, and strategic cooperation over outright demonization.
Here are the key takeaways from his impactful discussion on this complex relationship:
Level the Playing Field, But Don't Demonize: While acknowledging that Chinese companies benefit from government subsidies (like free land and taxes), Farley suggests a balanced approach to tariffs and economic policies. He advocates for creating a "fair playing field" but cautions against excessively "demonizing" China as an enemy, as it hinders necessary cooperation and learning.
Hands-on learning from China's Strengths: Farley strongly advocates for humility and learning from China, especially in areas where they excel. He points out that 70% of all EVs globally are made in China, and their in-vehicle technology (like integration with Huawei and Xiaomi for seamless digital experiences and advanced AI companions) is "far superior." He notes their "far superior" quality and cost efficiency in EV production. Farley's commitment to understanding the competition is evident in his six to seven visits to China in the past year. During these trips, he brings his entire leadership team. They meticulously test drive the latest 100 cars launched there, then select four or five top models to fly back to Detroit for detailed analysis, tearing them apart and reassembling them to understand their engineering and cost structures.
Acknowledge IP and Technology Gaps: The US needs to recognize that China possesses crucial IP, particularly in areas like Lithium Iron Phosphate (LFP) batteries, which are 30% cheaper and have less fire risk than the lithium batteries widely used in the West. He highlights that LFP technology, while invented at the University of Texas, was subsequently acquired, perfected, and scaled by China.
Pursue Joint Ventures and Partnerships: Farley believes that learning from China necessitates joint ventures, cooperation, and partnerships. These structures allow for the transfer of knowledge and know-how back to the home country (US). He acknowledges that China also benefits from these partnerships, gaining access to distribution systems and manufacturing quality experience that Western companies have.
Prioritize Industrial Independence with Guardrails: The US needs to understand its dependence on other countries for critical materials like high-powered magnets (currently almost exclusively from China) and manufacturing-grade semiconductors. Farley stresses the need for government policy to foster "industrial independence" for national defense and economic security. However, he also suggests guardrails for modern vehicles, given their advanced technology (cameras, microphones, autonomous capabilities), to ensure data privacy and prevent misuse.
Building on these broader points, two core insights deeply resonated with me personally:
First, while acknowledging Chinese companies benefit from government subsidies, Farley strongly cautioned against demonizing China as an enemy. He didn't attribute China's technological advantages primarily to these subsidies. Instead, he implied that such an adversarial mindset actually prevents us from being humble and open-minded, ultimately hindering cooperation and our own progress. This perspective is particularly striking coming from the head of a century-old automotive giant, assessing a relatively nascent Chinese auto industry.
Second, he highlighted Western companies' two significant current advantages: distribution channels and quality control. He noted that global supply chains are highly attractive to Chinese firms, and robust quality control and manufacturing processes will remain key strengths for Western companies over their Chinese counterparts in the future.
Ultimately, Farley's vision offers a compelling blueprint for navigating the intricate dynamics of global competition, advocating for a future built on mutual understanding and strategic collaboration. It's a perspective that profoundly deepened my respect for his leadership and for the evolving landscape of global industry.
(All opinions express the views of the author but not his employer. This article was created with the support of Google Gemini, no ChatGPT.)