Farley said Chinese companies such as Warren Buffett-backed BYD are ahead of the large U.S. automakers and startups on electric vehicles, specifically battery chemistry and other emerging technologies.
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“We see the Chinese as the main competitor, not GM or Toyota,” Farley said during the Morgan Stanley Sustainable Finance Summit.
He used BYD as the prime example of a Chinese automaker that has successfully developed and sold EVs, first in China, and now Europe.
“I like BYD. Totally vertically integrated, aggressive … very, very impressive company. And they were always committed to electric,” Farley said when asked which company is doing EVs right.
BYD has grown its sales in China from 445,000 units in 2015 to nearly two million last year, making it one of the top five automakers by sales in China, according to LMC Automotive.
Farley’s comments echo those of industry experts and investors regarding the growth of BYD and other Chinese automakers, which have government backing in China.
“BYD has a huge place, both from the electric vehicle perspective and also through the battery production side,” Philip Ripman, portfolio manager at Storebrand Asset Management, told CNBC Pro Talks last week.
Ripman, who manages the $1 billion Storebrand Global Solutions sustainable fund, highlighted BYD’s developments in cheaper, sodium-ion battery technology, which could potentially replace lithium batteries. He noted these could become prevalent in BYD’s more affordable EVs and help increase profit margins for the automaker.
Farley also noted BYD’s battery advantages compared to the current U.S. industry standard of lithium-ion batteries.
Ford earlier this year announced a new collaboration with China’s Contemporary Amperex Technology Co., or CATL, for a new $3.5 billion plant to build cheaper batteries in Michigan.
The facility will produce new lithium iron phosphate batteries, or LFP, as opposed to pricier nickel cobalt manganese batteries with lithium, which the company is currently using. It is expected to open in 2026 and employ about 2,500 people, according to the Detroit automaker.
Farley touted BYD’s role in building out that technology.
“BYD’s scale is way bigger than Tesla now, and they developed the LFP technology, which is a better battery,” Farley said.
The Ford-CATL deal has been criticized amid tensions between the U.S. and China. Specifically, Marco Rubio asked the Biden administration to review the deal, which includes Ford licensing CATL’s technologies. The Detroit automaker will own the new facility through a wholly-owned subsidiary instead of operating it as a joint venture with CATL.
Farley said if politics get in the way of allowing cheaper EV technologies in the U.S., the consumer is going to be “screwed” with higher prices.
“We have to work through that in our country. And I think they’re really interesting companies,” Farley said.