Sohrab Oshidar’s Post

As the piece states, Jim Farley recently returned from China, expressing anxiety over how quickly Chinese automakers have advanced in the EV space, calling their rise an "existential threat." But why is this only now being acknowledged? For decades, global automakers entered China through 50-50 joint ventures, mandated by the Chinese government since 1994. These partnerships required foreign companies to share technology and profits with their Chinese counterparts, a move that many saw as short-term profit-driven but risky in the long run. The aim was clear from China’s side: to absorb critical technology, which is now helping their EV sector dominate. The automakers knew the risks but prioritized market access, and now they are facing the consequences. With legacy automakers struggling to pivot at the necessary pace, and at the same time contending with ICE baggage, we might be witnessing a Kodak moment for more than one major player. Although this is the natural evolution of business (there is a plethora of Kodak’s) and a good thing in the long run, none will have the far reaching impact as what we are witnessing in the automotive world. It’s happening.

Per the recent WSJ article, Ford CEO Farley is prepared to make significant moves to compete in the EV market and revamp Ford's strategy. Farley recognizes China's advantage in offering cost-effective, advanced EVs that Ford currently lacks. Despite reservations about EV mandates and subsidies inflating prices in the US market, it's clear that the Chinese government heavily subsidizes numerous EV manufacturers. Farley's focus remains on enhancing Ford's product lineup rather than dwelling on challenges posed by the Chinese government. This proactive approach signals a promising future for the EV market, with an array of appealing options for consumers on the horizon. Markets have the potential to drive innovation and competition, ultimately benefiting consumers. Learn more about Ford's EV strategy shift and the evolving landscape in the automotive industry: [Link to the article] #EV #AutomotiveIndustry #Innovation

EVs from China advancing rapidly... "Jim Farley had just returned from China. What the Ford Motor chief executive found during the May visit made him anxious: The local automakers were pulling away in the electric-vehicle race." "In an early-morning call with fellow board member John Thornton, an exasperated Farley unloaded." "The Chinese carmakers are moving at light speed, he told Thornton, a former Goldman Sachs executive who spent years as a senior banker in China. They are using artificial intelligence and other tech in cars that is unlike anything available in the U.S. These Chinese EV makers are using a low-cost supply base to undercut the competition on price, offering slick digital features and aggressively expanding to overseas markets." "In the span of a few years, Chinese EV maker BYD, backed by Warren Buffett, and other domestic brands have clawed away gobs of market share in China from once-dominant foreign rivals, through a combination of lower prices, high-tech interiors and rapid vehicle updates. Today, they are quickly expanding in Europe, the Middle East and other Asian markets." "Chinese brands have so far been kept out of the U.S. by steep tariffs, geopolitical tensions and regulatory hurdles. But some have established a toehold in Mexico, where China-built vehicles—both EVs and combustion-engine vehicles—now account for about 20% of sales." "Governments around the world are worried about China’s EV expansion, citing everything from potential job losses to data-security concerns. In the European Union, where Chinese imports make up about one-fifth of electric sales, regulators recently disclosed plans for tariffs up to nearly 50%. The Biden administration went further with a roughly 100% tariff." "Meanwhile, Beijing was methodically investing in a plan to leapfrog global carmakers through a move to electric cars. The government offered generous subsidies for car companies to build EVs, and for consumers to buy them. Huge investment into car chargers also nurtured the EV market." #China #EVs #WSJ

"Yesterday’s ideas won’t work for you tomorrow!" - Futurist Jim Carroll Someone asked me yesterday about my comment that Chinese automotive companies will likely own the automotive industry of the future. Sadly, I think that it is true - the reason for that being that most auto manufacturers seem to continue to be busy fighting the battles of the last century, using product designs, ideas, and concepts involving the vehicle architecture of that era. The other automotive company that has the opportunity to own the industry in the 21st century has a CEO in place who has no focus on the battle ahead. Case in point? How about this: ---- Toyota Motor Corp., the world’s largest carmaker, has since been a frequent EV skeptic, funding misleading advertisements, and lobbying against government policies that promote them around the world. How Three High-Tech Countries Became Laggards in Electric Vehicles,Japan, South Korea and the US have fallen behind their peers in EV adoption — despite meeting the criteria to be frontrunners.Blooomberg, April 4, 2024 ----- I could dig out a zillion articles like this from my research service that play into this theme, but why bother? Many folks have an ingrained belief that the dominant companies of the 20th century will be the dominant ones of the 21st. It's their right! Rather than doing that, I went into one of my research services and dug out this article from 1962, which involves a desperate plea from the Association of Buggy Whip Manufacturers. You want to read this one! #leadership #disruption #transformation #automotiveindustry https://lnkd.in/gP8j5UWh

“This is an existential threat,” said Ford CEO Jim Farley after his trip to China, where he witnessed firsthand the advanced EV technology. He even brought a few models back to the U.S. headquarters to make sure all his executives understood the reality. This threat applies not just to Ford but to all global automakers outside China. While EU and U.S. trade protection may slow the impact at home, it won't prevent their decline in the Chinese market. It will be fascinating to watch how these once-dominant companies react to this challenge! #EV #AutoIndustry #Ford #China #Leadership The biggest competitive threat, according to Ford's CEO? Chinese EV makers.

There may be trouble ahead - so let’s face the music and dance! 🎶 CNBC’s Michael Wayland spells out a whole heap of trouble ahead as many western auto OEM’s are seemingly caught between the proverbial ‘rock and a hard place’😱 China’s Cash Cow can be milked no more as the country’s population increasingly favour local electric brands - and as one of Michael’s financial charts graphically illustrates - the best has been and gone! Meanwhile, making 🇺🇸🇪🇺EV’s both attractive and profitable seems to be a conundrum, just as BYD, GEELY, & SAIC are there with at least 1 out of 2 of those in play. PLUS…as good as ALL the batteries our western OEM’s need have ‘Made In China’ stamped on them!🇨🇳 And how, where, and when will the non-China Gigafactories be up and running as the cash crunch hits!🪫 And as much of this is about the product proposition - I’d suggest the greater malaise is with incumbents management culture and the inate ability to kick the can down the road. ‘Before the fiddlers have fled Before they ask us to pay the bill And while we still have the chance Let's face the music and dance!’ Wise words from Irving Berlin for sure!👏 Happy to help with a few tangible suggestions if that’s what anyone’s looking for right now… #automotive #management #electricvehicles #gigafactory

"Yesterday’s ideas won’t work for you tomorrow!" - Futurist Jim Carroll Someone asked me yesterday about my comment that Chinese automotive companies will likely own the automotive industry of the future. Sadly, I think that it is true - the reason for that being that most auto manufacturers seem to continue to be busy fighting the battles of the last century, using product designs, ideas, and concepts involving the vehicle architecture of that era. The other automotive company that has the opportunity to own the industry in the 21st century has a CEO in place who has no focus on the battle ahead. Case in point? How about this: ---- Toyota Motor Corp., the world’s largest carmaker, has since been a frequent EV skeptic, funding misleading advertisements, and lobbying against government policies that promote them around the world. How Three High-Tech Countries Became Laggards in Electric Vehicles,Japan, South Korea and the US have fallen behind their peers in EV adoption — despite meeting the criteria to be frontrunners.Blooomberg, April 4, 2024 ----- I could dig out a zillion articles like this from my research service that play into this theme, but why bother? Many folks have an ingrained belief that the dominant companies of the 20th century will be the dominant ones of the 21st. It's their right! Rather than doing that, I went into one of my research services and dug out this article from 1962, which involves a desperate plea from the Association of Buggy Whip Manufacturers. You want to read this one! #leadership #disruption #transformation #automotiveindustry https://lnkd.in/gsF_URm3

What's New to The Street... Geopolitical tensions are reshaping business landscapes. 🌏 Volkswagen grapples with mounting pressure to withdraw from a joint venture in China, highlighting the complex interplay between global politics and corporate strategies. 🚗 #Volkswagen #VW #businessnews #business #news #newtothestreet

EXCERPTS: The Chinese carmakers are moving at light speed, he [Jim Farley, Ford CEO] told Thornton, a former Goldman Sachs executive who spent years as a senior banker in China. They are using artificial intelligence and other tech in cars that is unlike anything available in the U.S. These Chinese EV makers are using a low-cost supply base to undercut the competition on price, offering slick digital features and aggressively expanding to overseas markets. Chinese brands have so far been kept out of the U.S. by steep tariffs, geopolitical tensions and regulatory hurdles. But some have established a toehold in Mexico, where China-built vehicles—both EVs and combustion-engine vehicles—now account for about 20% of sales. Governments around the world are worried about China’s EV expansion, citing everything from potential job losses to data-security concerns. In the European Union, where Chinese imports make up about one-fifth of electric sales, regulators recently disclosed plans for tariffs up to nearly 50%. The Biden administration went further with a roughly 100% tariff.  Farley, a 62-year-old, blunt-talking car fanatic who spent the early part of his career in marketing at Toyota Motor, sees Chinese EVs as an immediate threat in Europe and other overseas markets, and a long-term risk in Ford’s profit engine of North America, regardless of protectionist measures. Farley often reminds his executive team of how Toyota and other Japanese car companies grabbed market share from the U.S. automakers in the 1980s and 1990s, followed in recent decades by Korea’s Hyundai and Kia, which have found success with EVs. On a visit to China last year, he watched engineers dissect an electric car from Chinese juggernaut BYD to reveal elegant, low-cost engineering. A spin around a test track in another China-branded EV left him blown away by the car’s ride quality and high-tech features.

Interesting article in the WSJ: After a recent visit to China, Ford CEO Jim Farley observed that Chinese automakers are rapidly outpacing their U.S. counterparts by leveraging advanced technology like artificial intelligence and a cost-efficient supply chain. With sleek digital features and aggressive global expansion, Farley called this fast-paced progress an "existential threat" to Ford and other U.S. automakers.