Ford's EV Shift Triggered by China Visit

Last month, $Ford Motor (F.US)$ shocked the auto world by scaling back its EV ambitions, scrapping plans for three-row electric crossovers in favor of hybrid SUVs like the Explorer. This shift could cost up to $1.9 billion but is seen as a smart fiscal move.

However, Ford CEO Jim Farley sees a bigger threat: Chinese EV companies. After a 2023 trip to China, where Farley and other executives were stunned by the quality of $Chongqing Changan Automobile (000625.SZ)$ 's electric SUV, it became clear that Chinese automakers are far ahead, much like Japan's rise in the 1980s.

Farley believes Ford needs to innovate to compete, not just with traditional rivals but with China's rapidly advancing EVs.