Ford CEO Jim Farley has been telling anyone who will listen that the real EV competition is no longer in Fremont, California. It is in Shenzhen, Shanghai, and Beijing. And sometime in early 2026, according to multiple reports, he put that conviction into practice by getting behind the wheel of a Xiaomi SU7 electric sedan rather than evaluating Tesla’s current lineup.
His reasoning was blunt. In public remarks that have circulated widely through automotive and financial media, Farley said Tesla does not have an “updated vehicle.” Coming from the CEO of America’s second-largest automaker, that is not a throwaway line. It is a strategic verdict on a company that, until recently, set the pace for the entire electric car industry.
Why Xiaomi, and why now
Xiaomi, the Chinese tech giant best known for smartphones and smart home devices, launched the SU7 sedan in 2024 and immediately turned heads. The car starts at roughly $30,000 in China, undercuts the Tesla Model 3 on price, and packs a technology suite built on Xiaomi’s software ecosystem. Within months of its launch, the SU7 racked up enough pre-orders to strain Xiaomi’s production capacity.
For Farley, the SU7 apparently represents something Ford cannot ignore: a vehicle designed by a company with no legacy automotive baggage, built at a price point American manufacturers have struggled to hit, and loaded with the kind of seamless tech integration that younger buyers increasingly expect. Choosing it over a Tesla for a benchmarking drive was a deliberate statement about where he believes the most relevant innovation is happening.
That said, the specifics of Farley’s test drive remain thin. No official Ford press release, investor filing, or verified video has documented exactly when or where it took place, or what detailed feedback he offered about the SU7’s ride, build quality, or software. The reports stem from secondary news coverage, not from Ford’s own communications. The drive fits within the broader context of Farley’s well-documented interest in Chinese EVs, but readers should note the sourcing gap on the finer details.
The BYD factor looming over everything
Farley’s Xiaomi test drive did not happen in a vacuum. The larger force reshaping his competitive calculus is BYD, the Shenzhen-based automaker that overtook Tesla in total EV deliveries to claim the title of the world’s largest electric car seller, a milestone confirmed by reported sales figures at the close of 2025. BYD then opened 2026 with what The Wall Street Journal described as blockbuster sales growth in Europe, extending its reach well beyond China’s domestic market and into territory that Ford, Volkswagen, and Stellantis have long considered their own.
These are not projections. BYD’s position atop the global EV sales chart is based on reported delivery figures, and its European expansion is backed by verifiable registration data. The company’s mastery of vertical integration, from battery cells to finished vehicles, has allowed it to hit price points that legacy automakers find almost impossible to match while still turning a profit.
Farley has spoken openly about needing to “catch up” with BYD and other Chinese manufacturers. In interviews, he has praised their cost discipline and speed of execution, effectively conceding that Ford cannot assume a permanent technological or brand advantage in the EV space. That kind of candor from a sitting Detroit CEO is unusual, and it reflects a genuine shift in how American auto executives assess the competitive landscape.
The Tesla critique, unpacked
Farley’s comment that Tesla lacks an “updated vehicle” invites several readings. Tesla’s Model 3 received a significant refresh (internally called “Highland”) that rolled out in late 2023 and through 2024, and the Model Y got a similar update. But neither represents a ground-up new platform, and Tesla has not launched an entirely new mass-market model since the Model Y debuted in 2020. The long-anticipated affordable Tesla, sometimes referred to as the next-generation platform, has been the subject of repeated delays and shifting timelines.
Farley may have been pointing to that gap: Tesla’s lineup, while still competitive, has not fundamentally changed in years, even as Chinese rivals flood the market with new models at aggressive price points. Whether his critique was aimed at styling, hardware, platform age, or Tesla’s broader product development priorities under Elon Musk is not entirely clear from the available quotes. The remark appears to stem from public interviews and remarks Farley made in late 2025 and early 2026, though no single primary transcript has been widely cited as the definitive source. Tesla has not publicly responded to Farley’s remarks.
What Ford actually does next
The harder question is whether Farley’s competitive awareness translates into vehicles that can match Chinese rivals on price, technology, and quality. So far, the gap between recognition and execution at Ford has been painful. The company’s EV division, Ford Model e, reported substantial operating losses in recent years, and the per-vehicle loss figures have been a recurring source of investor concern.
No internal memos, supplier announcements, or prototype plans have been disclosed that tie directly to Farley’s benchmarking of Chinese EVs. Whether Ford intends to develop a low-cost EV platform inspired by what Farley has seen, pursue component partnerships with Asian suppliers, or simply use the intelligence to refine existing programs remains unconfirmed. Analysts can draw inferences from Ford’s shifting investment priorities, but those connections are circumstantial.
What is clear is the scale of the challenge. Building affordable electric cars profitably requires the kind of supply chain control and manufacturing efficiency that BYD has spent over a decade perfecting. Ford, like most Western automakers, is still working to close that gap, and closing it will likely take years and billions of dollars in investment.
What Farley’s Xiaomi drive signals for the EV market in 2026
For consumers, the practical takeaway is that competition in the electric car market is intensifying in ways that should eventually benefit buyers. If Ford and other legacy automakers are studying Chinese EVs this seriously, the pressure to deliver better vehicles at lower prices will only grow. For investors, the signal is more cautionary: Ford’s leadership clearly sees a threat it has not yet figured out how to neutralize.
Farley’s decision to drive a Xiaomi SU7 instead of a Tesla is, at one level, a single test drive by a single executive. But it captures something larger about where the auto industry’s center of gravity is shifting. The CEO of Ford no longer looks to Silicon Valley for the benchmark. He looks to China. Whether Detroit can respond fast enough to stay in the race is the question that will define the next several years of this industry, and right now, Farley’s own words suggest he is not sure of the answer.
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*This article was researched with the help of AI, with human editors creating the final content.
