Somewhere in 1973, the Japanese caught American automotive manufacturing with its pants down. The fuel crisis that hit the United States exposed those who believed that a real car needed a V8 engine to a different kind of vehicle. About 50 years later, the American automotive industry may find itself in the same situation, this time with a kind of fuel crisis mixed with a climate crisis and with cars not coming from Japan but from China. Have the lessons been learned? Are Americans once again looking down on the current competition with complacency?
It turns out not quite. According to a report in the Wall Street Journal, Jim Farley, Ford's CEO and one of the prominent voices in the interface between the government, car manufacturers, and buyers, admitted after his test drive in an electric car manufactured by Changan that Chinese manufacturers are becoming an "existential threat," highlighting especially their rapid pace of advancement. Farley visited China as part of Ford's collaboration with the Chinese manufacturer.
According to the report, Ford's CFO, John Lawler, also joined the trip, later telling Farley, "Jim, it's not like what we saw from them in the past. These guys are ahead of us."
In this case, as in others in the field of propulsion, traditional manufacturers are discovering that the significant advantage they had or thought they had over Chinese manufacturers is actually non-existent in products intended for export, particularly regarding production costs.
There’s another angle; this event occurs against the backdrop of larger moves not only at Ford but across the automotive industry, which is "recalculating" regarding massive investments in planning, manufacturing, and converting factories to produce electric vehicles, while the demand for such propulsion is becoming increasingly muted.
From the American perspective, this statement by Farley and the CFO of Ford who was present comes at the peak of a drama regarding the U.S. government's intention to impose tariffs on vehicles and automotive components produced in China to protect the domestic automotive industry, at a rate of 100%.
However, this could end up backfiring on them like a boomerang. This is partly because Ford, and even more so General Motors, operate in China, where the government wouldn’t sit still in the case of aggressive taxation, and also because they are interested in using China as an outsourcing hub for cheaper and more competitive cars. The government’s move, for example, will make it difficult for them to use Chinese batteries to reduce the prices of their new electric vehicles.
Ford, which already manufactures the Mustang Mach-E and the F-150 Lightning in the U.S., and the electric Explorer in Europe, has announced its intention to launch a relatively affordable electric vehicle priced at around $30,000 by 2027, a price range that aims to target a market where the Chinese are currently very active.
The cancellation of some of the electric plans it presented in previous years cannot absolve it from the concern over what the Chinese will do if it is not there to offer a suitable product in the market for relatively affordable cars. This, as mentioned and remembered, was exactly the foot in the door that Japanese manufacturers left 50 years ago. Even if the U.S. government manages to block the sale of Chinese cars in the U.S., which is almost never happening today but Washington is worried about Chinese factories in Mexico, Ford will need to compete with Chinese electric vehicles in other markets.
And which intriguing car impressed the executives? According to the report, it’s an electric crossover from Changan, although the exact model name was not disclosed.
Changan, with a production volume of about 2 million vehicles per year, is one of the largest manufacturers in China, although its electric vehicle production volume is only a small part of that. From its sub-brand that is set to arrive in Israel—Deepal—the company produced 136,000 units last year. The importer holding the import license for the brand is Machshirei Tnu'a, the importer of Suzuki.
We are expected to see the S7 here, a crossover in the category of Exfang G6 and Tesla Model Y. It measures 4.75 meters long with a wheelbase of 290 cm. The propulsion is rear-wheel drive, producing 258 horsepower, and it accelerates to 100 km/h in 6.7 seconds. The range from the 66.8 kWh battery stands at 475 according to the WLTP standard.
Further details about the vehicle, trim levels, and prices are expected to arrive in the coming months in preparation for the regular marketing launch anticipated at the end of the year.