DETROIT — Ford Motor’s largest competitors in electrical automobiles is not U.S. chief Tesla or crosstown rival Basic Motors — it is Chinese language automakers, CEO Jim Farley mentioned Thursday.

Farley mentioned Chinese language firms comparable to Warren Buffett-backed BYD are forward of the massive U.S. automakers and startups on electrical automobiles, particularly battery chemistry and different rising applied sciences.

“We see the Chinese language as the primary competitor, not GM or Toyota,” Farley mentioned in the course of the Morgan Stanley Sustainable Finance Summit.

He used BYD because the prime instance of a Chinese language automaker that has efficiently developed and bought EVs, first in China, and now Europe.

“I like BYD. Completely vertically built-in, aggressive … very, very spectacular firm. They usually have been all the time dedicated to electrical,” Farley mentioned when requested which firm is doing EVs proper.

BYD has grown its gross sales in China from 445,000 items in 2015 to almost two million final 12 months, making it one of many prime 5 automakers by gross sales in China, in response to LMC Automotive.

Farley’s feedback echo these of business consultants and traders relating to the expansion of BYD and different Chinese language automakers, which have authorities backing in China.

“BYD has an enormous place, each from the electrical automobile perspective and in addition by means of the battery manufacturing aspect,” Philip Ripman, portfolio supervisor at Storebrand Asset Administration, advised CNBC Professional Talks final week.

Ripman, who manages the $1 billion Storebrand World Options sustainable fund, highlighted BYD’s developments in cheaper, sodium-ion battery expertise, which may probably change lithium batteries. He famous these may turn into prevalent in BYD’s extra reasonably priced EVs and assist improve revenue margins for the automaker.

Farley additionally famous BYD’s battery benefits in comparison with the present U.S. business commonplace of lithium-ion batteries.

Ford earlier this 12 months introduced a brand new collaboration with China’s Modern Amperex Know-how Co., or CATL, for a brand new $3.5 billion plant to construct cheaper batteries in Michigan.

The ability will produce new lithium iron phosphate batteries, or LFP, versus pricier nickel cobalt manganese batteries with lithium, which the corporate is presently utilizing. It’s anticipated to open in 2026 and make use of about 2,500 folks, in response to the Detroit automaker.

Farley touted BYD’s position in constructing out that expertise.

“BYD’s scale is method greater than Tesla now, they usually developed the LFP expertise, which is a greater battery,” Farley mentioned.

The Ford-CATL deal has been criticized amid tensions between the U.S. and China. Particularly, Marco Rubio requested the Biden administration to evaluation the deal, which incorporates Ford licensing CATL’s applied sciences. The Detroit automaker will personal the brand new facility by means of a wholly-owned subsidiary as an alternative of working it as a three way partnership with CATL.

Farley mentioned if politics get in the best way of permitting cheaper EV applied sciences within the U.S., the buyer goes to be “screwed” with greater costs.

“Now we have to work by means of that in our nation. And I feel they’re actually fascinating firms,” Farley mentioned.