According toNikkei Asia ReportFord President and CEO Jim Farley recently stated...Earnings callIn response to a net loss of US$81.8 billion (approximately NT$2640 billion) for the year, the company issued a stern warning: the Chinese auto industry is a "wild card" that all global automakers must confront head-on.
This is not just a review of financial figures, but a mobilization for survival strategies.
Cutting off the tail to survive: The multi-billion dollar tuition fee for electric vehicles
Ford's revenue is projected to grow slightly by 1% in 2025 (reaching $1872 billion), but its net profit will turn from a profit the previous year into a significant loss. The main reason is that Ford recognized a special loss of up to $159 billion, including:
• Cancellation of some electric vehicle projects:They acknowledged the failure of their previous aggressive transformation strategy.
• Asset impairment:Revaluation of existing equipment and inventory.
• Termination of joint venture:End part of the joint venture with South Korean battery manufacturer SK On.
This shows that Ford is in a very painful "correction period" trying to pull away from its previously overly optimistic all-electric transition.
"Variables" in China's Auto Industry: The War Between Subsidies and Pricing Power
Jim Farley stated frankly at the conference that Chinese brands have already taken a dominant position in the global electrification competition. By 2025, China's automobile exports are projected to reach 709.8 million units, representing an annual growth of 21.1%.
Jim Farley's core concern is: "How will China change the global automotive pricing power landscape in a subsidy-driven and extremely competitive environment?" In other words, how can traditional automakers maintain profits when competitors are aggressively undercutting prices to seize market share?
Joining if you can't beat them? Ford's "opportunistic" strategy
Faced with this formidable opponent, Jim Farley proposed an "opportunistic" strategy:
• Made in China, exported globally:Leveraging the low-cost production advantages of joint ventures in China (such as Changan Ford), and using China as an export base, this business is currently growing.
• Embrace the Chinese supply chain:Despite U.S. government restrictions on Chinese batteries, Ford is still working with CATL at its Michigan plant to ensure that its lower-priced models can use cost-effective lithium iron phosphate batteries.
• Focus on partial electrification:Instead of blindly pursuing all-electric vehicles, they are investing in "efficient partial electrification projects" (such as hybrid electric vehicles) and only launching pure electric vehicles in less competitive markets.
Analysis of viewpoints
Jim Farley is actually one of the few CEOs of traditional automakers who is willing to publicly acknowledge that "China's auto industry is very strong."
As early as the end of last year, Jim Farley told the media: "Ford missed Japan (when Toyota/Honda rose to prominence), missed South Korea (when Hyundai/Kia rose to prominence), so it absolutely cannot miss China."
The subtext of this statement is that Ford has realized that relying solely on "Made in America" or traditional supply chains is simply not enough to compete on cost with BYD or Geely in the electric vehicle era. Ford's current strategy is pragmatic: "Since we can't win the cost war, we'll use your supply chain to save our profits."
The massive losses in 2025 are, to some extent, Ford's "stop-loss point." Cutting unprofitable pure electric projects, embracing hybrid technology again, and leveraging China's production capacity to subsidize the global market—this path, though awkward (given the US government's opposition to Chinese cars), may be the only way for a publicly traded company responsible to its shareholders to survive.
