Chinese automakers, not American leader Tesla or neighbouring foe General Motors, are Ford Motor’s biggest rivals in the electric vehicle market, according to CEO Jim Farley.

Farley claimed that when it comes to electric vehicles, notably battery chemistry and other cutting-edge technology, Chinese firms, like the BYD company financed by Warren Buffett, are ahead of major American automakers and startups.

“We see the Chinese as the main competitor, not GM or Toyota,” Farley said during the Morgan Stanley Sustainable Finance Summit.

He cited BYD as the best illustration of a Chinese automaker that successfully created and sold EVs, first in China and now in Europe.

“I like BYD. Totally vertically integrated, aggressive … very, very impressive company. And they were always committed to electric,” Farley said when asked which company is doing EVs right.

According to LMC Automotive, BYD has increased its sales in China from 445,000 units in 2015 to nearly two million last year, placing it among the top five automakers by sales in China.

Farley’s remarks about the expansion of BYD and other Chinese automakers, which are supported by the Chinese government, are consistent with views of business analysts and investors.

“BYD has a huge place, both from the electric vehicle perspective and also through the battery production side,” Philip Ripman, portfolio manager at Storebrand Asset Management, said.

The cheaper sodium-ion battery technology being developed by BYD, which has the potential to replace lithium batteries, was emphasised by Ripman, who oversees the $1 billion Storebrand Global Solutions sustainable fund. He pointed out that these might be common in BYD’s more reasonably priced EVs and aid the carmaker in boosting profit margins.

Farley also mentioned BYD’s battery advantages over the current lithium-ion industry standard in the United States.

Ford announced a new partnership with China’s Contemporary Amperex Technology Co., or CATL, earlier this year for a new $3.5 billion facility to produce more affordable batteries in Michigan.

Instead of the company’s current, more expensive nickel cobalt manganese batteries with lithium, the factory will build new lithium iron phosphate batteries, or LFP. According to the Detroit automaker, it will start operations in 2026 and employ roughly 2,500 employees.

Farley praised BYD’s contribution to developing that technology.

“BYD’s scale is way bigger than Tesla now, and they developed the LFP technology, which is a better battery,” Farley said.

Amid tensions between the United States and China, the Ford-CATL agreement has come under fire. Marco Rubio specifically requested that the Biden administration evaluate the agreement, which calls for Ford to licence CATL’s innovations. The new factory will be controlled by the Detroit automaker through a wholly-owned company rather than run as a joint venture with CATL.

Farley claimed that the consumer would be “screwed” with greater costs if politics prevented the U.S. from adopting more affordable EV technologies.

“We have to work through that in our country. And I think they’re really interesting companies,” Farley said.

(Adapted from MoneyControl.com)