How Tesla's Technology Inspired EV Innovation at Ford

Ford CEO Jim Farley revealed he was struck by a “shocking” discovery when inspecting rivals’ vehicles, driving him to act so Ford could better compete with Tesla and China’s fast-growing EV market. Appearing on the Office Hours: Business Edition podcast, Jim said he realised just how far ahead Elon Musk’s company and Chinese EV startups have advanced.

Previously, the CEO warned that China’s EV leaders pose a major challenge to Western automakers, describing them in June as “far superior” and “completely dominating” the global EV sector.

In 2022, Jim launched Ford’s Model E division to accelerate innovation in EVs, but the unit recorded losses exceeding US$5bn in 2024.

On the podcast released 12 November, Jim acknowledged that venturing into EV development was bound to be “brutal business-wise”. He explained: “My ethos is, take on the hardest problems as fast as you can and do it in public because you’ll solve them quicker that way.”

Although US EV sales surged in 2025, Jim said during Ford’s third-quarter earnings call in October that EVs will still only represent about 5% of the US car market in the near future.

The Ford revelation

In an interview with Monica Langley, Jim shared: “I was very humbled when we took apart the first Model 3 Tesla and started to take apart the Chinese vehicles. When we took them apart, it was shocking what we found.”

When comparing the Tesla model to Ford’s Mustang Mach-E, he said, “our wiring loom, just the wiring in the vehicle, was 1.6km longer than the Tesla wiring loom”, noting the battery cost to “haul around the wiring in the car” was about US$200.

He added that “when an EV has a really expensive battery, the weight of the vehicle is monetised through the size of the battery”, observing that investing in lightweight wiring—though more expensive initially—would save costs on battery investment later.

EVs from China vs the US

Jim also reflected on international trends, pointing out that “EVs are exploding in China” due to strong economic backing from the Chinese government for battery-powered vehicles. He stated: “We can’t walk away from EVs, not just for the US, but if we want to be a global company, I’m not going to just cede that to the Chinese.”

Business Insider reports that nearly 50% of new cars sold in China are electric, compared with roughly 10% in the US.

Chinese automakers continue to outpace many Western rivals, offering a range of advanced EV models and now expanding rapidly into Europe.

In the UK, for instance, BYD achieved an 880% year-on-year sales increase, delivering over 35,000 vehicles in 2025. This milestone made the UK BYD’s largest market outside China, thanks largely to its ability to deliver high-quality electric cars at competitive prices. The BYD Dolphin, for example, offers a budget-friendly alternative to premium models like the Tesla Model 3, attracting more mainstream buyers.

Much like in Europe, Jim noted that US consumers are showing greater interest in affordable electric models rather than premium vehicles priced at “US$70-80,000”.

Automation and Ford’s future

Jim also spoke about automation, sharing a story involving his grandfather’s experience with one of the first automated devices—the elevator.

“I asked my grandfather, ‘what would be the worst job you could think of?’. He said ‘an elevator operator. You have no one to talk to, and automation is a scary thing,’” Jim recalled.

He went on to say that Ford’s operating philosophy revolves around “democratising technology”, with the company focused not only on pioneering advanced innovation but also on expanding technological access to as many customers as possible.