During an appearance on a podcast in late October 2024, Ford’s CEO Jim Farley confessed a dirty little secret that gives new insight into his position as the leader of one of Detroit’s Big Three.
In a conversation about its Chinese competitors with the host of the Fully Charged Podcast, Robert Llewellyn, he admitted that his daily driver was a car made by one of Ford’s Chinese competitors: an EV by consumer electronics giant Xiaomi called the SU7.
Despite it not being officially sold in the U.S., he noted that after benchmarking the electric sedan, he has been having a grand old time using it as his personal vehicle.
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“I don’t like talking about the competition so much, but I drive the Xiaomi,” Farley confessed. “We flew one from Shanghai to Chicago, and I’ve been driving it for six months now, and I don’t want to give it up.”
If there is one category of car that can be described best as “forbidden fruit,” it would be the technologically advanced, Tesla-rivaling EVs that hail from the People’s Republic of China. These cars, made by manufacturers including Nio (NIO) , Geely (GELYF,) and Tesla’s main Chinese rival BYD (BYDDY) , are praised for their segment-leading technological features and lower price tags than Western rivals.
However, despite not being offered for sale in the United States, the popularity of these vehicles in markets where they are sold shows that they can be a nightmare for the auto establishment.
A BYD Yangwang U9 electric vehicle (EV), manufactured by Chinese car manufacturer BYD, on display at the Singapore Motorshow on January 9, 2025.
ROSLAN RAHMAN/Getty Images
Biden administration strikes final nail in Chinese EV coffin in U.S.
According to a new report from Reuters, the outgoing Biden administration finalized a rule that effectively prohibits nearly all cars and trucks made in China from being sold in the U.S. market.
The new move from Washington is part of a rule that also adds restrictions on vehicles made in Russia. The finalized rule evolves from a September 2024 Commerce Department proposal that suggested a sweeping ban on Chinese software and hardware related to “connected vehicles” from the American market.
Under the ruling, automakers will be tasked with removing offending software by the 2027 model year and offending hardware by 2029. The ruling also bars Chinese car companies from testing self-driving cars on U.S. roads.
In a statement to Reuters made a few days before the ruling was made final, Commerce Secretary Gina Raimondo justified the “Chinese car ban” on national security grounds and made it clear that they worked with auto manufacturers before making a final decision.
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“We wanted to hear from industry. We had to get it right. We digested all of that comment and now we’re going to get this out,” Raimondo said. “It’s really important because we don’t want two million Chinese cars on the road and then realize… we have a threat.”
In a statement, the White House states that the DoC’s ruling will help the U.S. “defend against the PRC’s cyber espionage and intrusion operations;” something they state continues to “pose a significant threat to U.S. critical infrastructure and public safety.”
“Over the past several years, PRC state-sponsored cyber actors such as Volt Typhoon have engaged in an extensive hacking campaign aimed at pre-positioning on — and potentially launching disruptive cyberattacks targeting — U.S. critical infrastructure,” the White House said.
In addition, they justify the rule by stating that “certain hardware and software used in connected vehicles could enable mass collection of sensitive information, including geolocation data, audio and video recordings, and other pattern-of-life analysis.”
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The revised rules contain carveouts for specific applications. For instance, the new rule does not apply to vehicles heavier than 10,000 pounds; which would allow BYD to keep producing its electric buses at its California factory.
Detroit automakers will still be allowed to import some vehicles from China
Additionally, the new rules also do not apply to Chinese vehicle software developed before the new rules came into effect on the condition it is not being maintained by a firm based in the PRC. According to a Biden administration official, this will allow Detroit automakers General Motors (GM) and Ford (F) to keep importing some vehicles that are made in the People’s Republic.
Currently, GM imports the Buick Envision crossover from a factory in Yantai, Shandong, China, while the Blue Oval imports the Lincoln Nautilus from a factory in Hangzhou, Zhejiang, China. Both vehicles are produced in factories made in partnership with state-owned automakers.
In publicly available comments to the Commerce Department made in October 2024, Geely-owned Polestar (PSNY) said that the proposed rule could “effectively prohibit” the brand from selling its EVs in the United States, even models like the Polestar 3, which is built in South Carolina.
It argued that while it makes just one vehicle — the Polestar 2 — in China, much of its operations and staff are not located within the People’s Republic and that the ruling puts restrictions on a largely American company.
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The Commerce Department’s ruling on Chinese “connected cars” is far from the only restriction designed to cripple the hopes of Chinese automakers that wish to sell their motors in the United States.
In September, President Biden finalized a set of rules first unveiled in May, including a 100% tariff on electric vehicles imported from China and significant tariffs on a targeted list of other Chinese imports totaling $18 billion, including battery components, computer chips and medical supplies.
“We’re not going to let China flood our market, making it impossible for American automakers […] auto manufacturers to compete fairly,” Biden said in May 2024 remarks at the Rose Garden. “I’m determined that the future of the electric vehicles will be made in America by union workers. Period. And we’ll do it by following international trade laws to do it.”
On the campaign trail, President-Elect Trump noted that he wanted to prevent Chinese automakers from flooding the U.S. auto market, but noted in an August 2024 interview by Reuters that he was open to allowing such companies to make them in the States.
“We’re going to give incentives, and if China and other countries want to come here and sell the cars, they’re going to build plants here, and they’re going to hire our workers.”
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