The Ford CEO Drives a Xiaomi, Not a Tesla.

I drive a Tesla. I defend Tesla at dinner parties. The earnings transcripts sit on my phone. So when the CEO of Ford said on a podcast that he'd been daily-driving a Xiaomi, the Chinese phone maker that started building cars in 2024, for six months and didn't want to give it up, my first reaction wasn't “huh, interesting.” It was “that's on purpose.”

Jim Farley said it on the Fully Charged podcast in October 2024.^[1] He said it again, in slightly different words, to Fortune this month.^[2]His team flies Chinese cars from Shanghai to Detroit, drives them, takes them apart, puts them back together. He's been to China six or seven times in the past year.^[3] Of every EV on sale there, the one he picked to daily-drive in Chicago is the SU7.

The line everyone pulled was the one about Tesla. “Nothing against Tesla. They've been doing great, but you know, they really don't have an updated vehicle.”^[2]Everyone ran with that one. It's the boring quote. The interesting part is that Farley had the entire Chinese EV industry to pick from and he didn't pick a BYD (BYD Auto, China's biggest EV maker by volume).

The part everyone missed: he didn't pick a BYD

BYD is the car CEO's obvious answer. It's the biggest EV maker on earth. It out-produces every American and European EV company combined. It's vertically integrated from the lithium mine up. Farley himself called it “the best in the business” on cost, supply chain, and manufacturing.^[2]If you're the CEO of Ford and you want to benchmark the scary competition, you drive a BYD Han sedan. You daily a BYD Seagull, the $10,000 hatchback, for a month. You take an Atto 3 crossover apart on the factory floor in Detroit.

He drove a Xiaomi.

Xiaomi is a phone company. The SU7 is their first car. They've delivered about 400,000 cars total in their entire corporate life, most of them in 2025.^[4] BYD sold more than that last quarter. On a conventional scorecard, BYD is the one Farley should be benchmarking.

The reason he's not is the detail that gave the whole thing away. Here's Farley describing what it's like to actually sit in the thing:

That's the whole thesis. BYD wins on price. They make cars cheaper than anyone else because they own the stack. Farley can benchmark BYD by price. He can try to copy pieces of it. In the Fortune piece, he said Ford should “take the cost competitiveness of BYD and compete with that platform in parts of the market where we know our customers.”^[2]That's a five-year engineering plan. It's hard, but it's a plan.

Xiaomi doesn't win on price. It wins by plugging the car into an existing ecosystem. The SU7 launches with hundreds of millions of Xiaomi phone owners whose earbuds, watches, tablets, rice cookers, and robot vacuums are already on HyperOS, the company's cross-device operating system that spans more than 200 product categories and over 1,000 smart-home devices.^[5]If you're a Xiaomi phone customer, you bought into this company six years ago. You just didn't know the car was coming.

Sit in the driver's seat and the car already knows who you are. The voice assistant you've been talking to at home for three years is in the dashboard. The smart-home scene you named “arrive home” triggers when you pull into the driveway.

That's the part Farley can't clone. Not in five years. Not for any money. Ford isn't a consumer electronics brand and isn't about to become one.

The “no updated vehicle” jab is a misdirect

Farley's Tesla line is a classic auto-exec move. Quotable, gets the headlines, makes him look like he's paying attention. Technically it's a stretch too. Tesla shipped the Model 3 “Highland” refresh (Tesla's codename for the late-2023 interior and chassis overhaul) with a new interior, reworked suspension, and a ride-quality bump big enough that reviewers called it a generational update.^[6]“No updated vehicle” in 2026 is a punchy line, not a fair description.

But that's not what he was really saying. Farley's point isn't “Tesla is stale.” His point is that for the buyer he cares about, the one walking out of a Xiaomi showroom in Beijing for roughly $32,000 in a base SU7 that does 0 to 100 km/h in 3.08 seconds and talks to their watch,^[7]“Tesla” isn't the right reference set anymore. The whole premium EV sedan benchmark has moved. Tesla happens to be the American brand sitting closest to where that benchmark used to be.

The numbers back this up. In 2025, the SU7 outsold the Model 3 in China for the full year, 258,164 to 200,361, per the China Passenger Car Association.^[8] Tesla had owned the Chinese premium sedan category for five years. It took Xiaomi nine months from launch to break the streak.

Two things Ford can't clone

Set aside the Xiaomi bit for a second. Here's what the picture looks like from Ford's side, in numbers.

Ford's Model e division, which houses its EVs, lost $5.1 billion in 2024.^[9] It lost another $4.8 billion in 2025.^[10] Then in December 2025, Ford took a $19.5 billion charge after revamping its EV strategy, writing down and cancelling a big chunk of its pure-EV program.^[2]The company is guiding to a $4.0 to $4.5 billion Model e loss in 2026. Three years, more than $33 billion of losses and impairments, on a business losing market share to Chinese competitors that didn't exist five years ago.

My first instinct, shouting at the dinner table, was to blame management. Then I ran the numbers against the supply chain and realized this isn't really a Ford problem. It's two problems, and neither one is cloneable on any timescale that matters.

First: the battery stack. China was 80% of global battery cell production in 2024. It controls roughly 85% of cathode and 90% of anode production. Battery pack prices in China fell about 30% in 2024 alone, versus 10 to 15% in the US and Europe.^[11] That's not a procurement problem. It's the consequence of fifteen years of central industrial policy, enormous fixed-capex commitments, a workforce that's done this for a generation, and a domestic auto market big enough to absorb all the capacity. The US doesn't catch up to that by building a few gigafactories in Georgia. It catches up by doing the fifteen years.

Second: the consumer electronics front-end. Xiaomi ships more than 200 million phones a year, plus a catalog of wearables, home devices, and appliances that all run HyperOS. When they ship a car, the car isn't a car with a software layer bolted on. It's another endpoint on a running ecosystem. There is no American equivalent. Apple had a shot and killed its car project. Google has Android Auto, which is a layer, not an ecosystem. Tesla is the closest, and Tesla doesn't have a phone.

Ford can compete with BYD on cost, eventually. It cannot compete with Xiaomi on anything. And neither can anyone else in America.

What a Tesla fan should actually take from this

Here's where I land. The defensive reaction to this story is to argue about Farley's word choice, point out that the SU7 doesn't sell in the US and never will because of the 100% tariff, or note that SU7 sales are declining month-over-month. That last one is technically true. They're declining because Xiaomi launched a second car, the YU7 SUV, which outsold the SU7 inside Xiaomi's own lineup in December 2025, so the brand is growing, not shrinking.^[12] The phone company shipped its second car and started cannibalizing the first. Imagine Apple releasing a second iPhone line in year two.

Each of those is technically correct and none of it changes the headline. A CEO running a company that has made cars for 122 years looked at the entire global EV market and picked a first-year sedan from a phone company as his personal reference vehicle. He did it on purpose. He said so on a podcast. He's been saying it, in various forms, for a year and a half. He isn't confused about who pays Ford's bills. He's telling you the industry's reference vehicle doesn't live in America anymore.

I like my Tesla. I'm going to keep driving it. But Elon Musk is the only American EV CEO who could plausibly build something adjacent to the Xiaomi play, and he's currently busy being a political figure and running five other companies. That's not a strategy. That's a coin toss.

When the Ford CEO says he doesn't want to give up the car, he isn't really talking about the car.