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Ford CEO Jim Farley, the leader of the 122-year-old company that democratized the car for everyday Americans, said carmakers are facing three \u201cperfect-storm moments\u201d that could prove existential.<\/p>\n
Farley took over as CEO in 2020, but has worked at the automaker since 2007. Before that, he spent nearly 20 years at Toyota.\u00a0<\/p>\n
Now, he thinks the three-fold transformation barreling at carmakers represents a \u201ccome to Jesus\u201d moment for the industry, and they will have to either meet each of the challenges or face the consequences, he told Rolling Stone.<\/p>\n
China<\/p>\n
The first threat is Chinese carmakers. As recently as 2022, Western companies dominated the car market in the world\u2019s second largest economy, said Farley. But in 2023, Chinese automakers surpassed Western rivals\u2019 China car sales for the first time, the Wall Street Journal reported.\u00a0<\/p>\n
Volkswagen was the market\u2019s biggest player for a decade. The German automaker sold a high of 4.23 million units in 2019, but the market\u2019s growing preference for EVs and homegrown options led to steady declines that cut VW\u2019s sales down about 36% to 2.69 million in 2025.\u00a0<\/p>\n
Ford has also seen its own declines in China, where sales fell to 288,000 in 2022 from a peak of 853,000 in 2016.\u00a0<\/p>\n
Farley knows firsthand the capability of the Chinese car industry. In 2024, he spent six months driving a Xiaomi SU7, the first EV created by the Chinese tech company better known for its smart phones, and didn\u2019t want to give it up.<\/p>\n
China\u2019s carmakers have excelled partly because of controversial state subsidies, he said, but also because of engineering excellence.<\/p>\n
\u201cThey have the most subsidies from the government, plus their OEMs [original equipment manufacturers] are really good,\u201d he told Rolling Stone.\u00a0<\/p>\n
After success domestically, some of China\u2019s biggest carmakers are expanding worldwide, with BYD surpassing Ford in global sales last year\u2014while selling only EVs and hybrids.\u00a0<\/p>\n
Design<\/p>\n
Second, car companies are also facing the challenge of greater complexity thanks in part to the rise of EVs and a shift in engineering toward \u201csoftware-defined vehicles,\u201d according to Farley.<\/p>\n
\u201cThe systems for safety, driver assistance, and controlling the vehicle, are so sophisticated and there\u2019s so much software in the vehicles that are sensing devices,\u201d he said.<\/p>\n
These vehicles are much more complicated and expensive to build than traditional vehicles, and they require a different set of expertise than that which automakers have traditionally employed to build their vehicles.\u00a0<\/p>\n
An example of this struggle is Ford\u2019s F-150 Lightning, an electric pickup truck that Ford discontinued in December after only three years in production. Part of the problem with the vehicle was that the company approached it in a traditional way, instead of resetting their approach adjusted to building an EV.<\/p>\n
\u201cIt didn\u2019t take us long to learn that our internal combustion engine prejudice was so high that we actually hadn\u2019t designed the cars right,\u201d he told Rolling Stone.<\/p>\n
Meanwhile, when comparing the all-electric Mustang Mach E to the Tesla Model Y, the Mustang was 70 pounds heavier because Ford had approached the internal wiring in a more traditional way.<\/p>\n
Elon Musk\u2019s carmaker thought about designing its vehicle differently, he added.\u00a0\u00a0<\/p>\n
\u201cThey said, \u2018Let\u2019s design the vehicle for the lowest, smallest battery.\u2019 Totally different approach,\u201d he said.<\/p>\n
Regulations<\/p>\n
The third and potentially largest storm, Farley said, is the regulatory whiplash that has accompanied the march toward lower carbon emissions.<\/p>\n
\u201cEveryone thought the first inning or the second and third inning would be pure electric vehicles,\u201d Farley said.<\/p>\n
Instead, expensive batteries and the Trump administration\u2019s weakening of emissions standards have changed the calculus. In December 2025, Trump reduced the mandatory annual improvement for automakers\u2019 emissions from the Biden administration\u2019s 2% per year to a rate of 0.5% that steadily drops to 0.25% in 2031. <\/p>\n
The National Highway Safety Administration predicted the move will bring down the average miles per gallon for light-duty vehicles to 34.5 miles per gallon by 2031 from the 50.4 miles per gallon average that would\u2019ve been reached under the Biden-era standards.<\/p>\n
\u201cWhat that really means is, if there are no regulations, then every OEM is going to go back to their cultural norm,\u201d Farley said.<\/p>\n
Yet, Ford is hedging its bets. If emissions standards can change under Trump, it\u2019s likely they will change under the next president.\u00a0<\/p>\n
So Ford moved away from its plug-in EV business and scrapped its F-150 Lightning in December. The company is betting its future on hybrids, extended-range EVs (EREVs), and a smaller, affordable EV platform.\u00a0<\/p>\n
\u201cIf we don\u2019t put our chips on the right number and the right color, Ford could maybe not exist,\u201d he said.\u00a0<\/p>\n
#Jesus #moment #Ford #CEO #American #carmakers #battling #perfect #storm<\/p>\n","protected":false},"excerpt":{"rendered":"
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