Ford CEO and CFO left shocked after testing electric vehicles in China

The quick test drive, in which Farley drove and Lawler rode shotgun, gave executives a taste of what it was like to ride in a Chinese-made electric vehicle.

Farley and Lawler were both shocked and impressed by how smooth and quiet their driving was, The Journal reported.

“Jim, it’s nothing like it used to be,” Lawler told Farley, per The Journal.

“These guys are ahead of us,” Lawler added.

Farley’s fears were raised again in May when he made another trip to China, The Journal reported.

“John, this is an existential threat,” Farley told Ford board member and former Goldman Sachs executive John Thornton after his trip.

Ford representatives did not immediately respond to a request for comment sent outside regular business hours.

Chinese automakers like BYD have dominated the EV race. First, Chinese carmakers have made inroads into emerging markets such as Brazil and Mexico, as well as Southeast Asian countries such as Thailand.

According to data compiled by technology firm ABI Research for Business Insider, Chinese automakers accounted for 88 percent of the eV market in Brazil and 70 percent in Thailand in the first quarter of this year.

The rapid rise of Chinese-made electric vehicles has led Western governments to impose trade restrictions on them.

In May, the US government imposed crippling tariffs on Chinese automakers, effectively shutting them out of the US auto market. The European Union followed suit soon after, introducing tariffs a month later.

Ford certainly isn’t the only American automaker struggling to compete with the Chinese.

Even Tesla, widely considered to be a pioneer in electric vehicles, has faced pressure from the Chinese. At the end of 2023, BYD briefly dethroned Tesla as the world’s largest electric vehicle manufacturer.

When Tesla held its quarterly earnings call in January, CEO Elon Musk acknowledged the threat posed by Chinese automakers, calling them “the most competitive auto companies in the world.”

“If trade barriers aren’t put in place, they’re going to demolish pretty much every other car company in the world,” Musk told investors at the time.