Ford CEO Jim Farley, the leader of the 122-year-old company that democratized the car for everyday Americans, said automakers are facing three “perfect-storm moments” that could prove existential.
Farley took over as CEO in 2020, but has been with the automaker since 2007. Prior to that, he spent nearly 20 years at Toyota.
Now, he thinks the barreling three-fold transformation at carmakers represents a “come to Jesus” moment for the industry, and they must face each challenge or face the consequences, he said. Rolling Stone.
The first threat is the Chinese car manufacturers. As recently as 2022, Western companies dominated the car market in the world’s second-largest economy, Farley said. But in 2023, Chinese automakers surpassed Western rivals’ China car sales for the first time. The Wall Street Journal Reported.
Volkswagen was the biggest player in the market for a decade. The German automaker posted a record high of 4.23 million units in 2019, but the market’s growing preference for EVs and domestic alternatives led to continued declines that saw VW’s sales fall by nearly 36% to 2.69 million in 2025.
Ford also saw its own decline in China, where sales fell to 288,000 in 2022 from a peak of 853,000 in 2016.
Farley knows the potential of the Chinese car industry firsthand. In 2024, he spent six months driving the Xiaomi SU7, the first EV from the Chinese tech company known for its smartphones, and didn’t want to give it up.
China’s carmakers have excelled in part because of controversial state subsidies, he said, but also because of engineering excellence.
“They have the most subsidies from the government, as well as their OEMs [original equipment manufacturers] are really good,” he said Rolling Stone.
After success domestically, some of China’s biggest carmakers are expanding globally, with BYD overtaking Ford in global sales last year — while selling only EVs and hybrids.
Second, car companies are also facing the challenge of greater complexity due to the rise of EVs and the shift in engineering towards “software-defined vehicles”.
“Safety, driver assistance, and vehicle control systems are very sophisticated and vehicles have a lot of software that uses sensing devices,” he said.
These vehicles are more complex and expensive to build than conventional vehicles, and they require different expertise than automakers traditionally use to build their vehicles.
One example of this struggle is Ford’s F-150 Lightning, an electric pickup truck that Ford discontinued in December after three years in production. Part of the vehicle’s problem is that the company approached building an EV in a traditional way rather than a reset approach that accommodates it.
