Tesla's stock price declined during early Monday trading, influenced by news suggesting its automotive business could face new challenges.
Last weekend, the Financial Times, citing four independent sources, reported that Ford Motor is in discussions with Chinese consumer electronics and automaker Xiaomi Group to establish a joint venture for producing electric vehicles within the United States.
Reportedly, this is not the first instance of Ford exploring potential collaborations with Chinese new energy vehicle manufacturers. Earlier this year, the Wall Street Journal disclosed that Ford was in talks with new energy vehicle giant BYD regarding potential cooperation in the battery sector in the US.
Tesla's stock dropped by nearly 3% at one point during the early trading session.
Ford's Chief Communications Officer posted on the X platform, stating that the Financial Times report was "completely false and without basis."
Xiaomi Group also issued a statement on the X platform in response: "Reports regarding the company forming a joint venture with Ford Motor are completely untrue. Xiaomi currently does not sell products or services in the US market and has not entered into any discussions with any companies regarding this matter."
Despite the denials from both parties regarding the collaboration rumors, it remains an undeniable fact that Chinese new energy vehicles,凭借 their high cost-performance ratio and excellent design, already pose a significant challenge to Tesla's new energy vehicle business and even traditional American automakers like General Motors.
Ford CEO Jim Farley has repeatedly offered positive assessments of Chinese new energy vehicles, particularly praising the product strength of the Xiaomi SU7 sedan. Ford reportedly even imported the model to the US for testing.
The Xiaomi SU7 is a hot-selling model in the Chinese market with an excellent reputation; its sales in China have surpassed those of the Tesla Model 3, and the product has faced supply shortages. It is reported that orders for Xiaomi's new model, the YU7, have exceeded 100,000 units since pre-orders began in early January.
For some US regulators and members of Congress, importing Chinese new energy vehicles into the US or having Chinese-funded companies establish production facilities locally are largely unacceptable propositions. However, former US President Donald Trump has expressed openness to the idea of Chinese companies manufacturing vehicles in the US.
In mid-January, speaking at an event hosted by the Detroit Economic Club, Trump stated: "If the Chinese want to come here and build a plant, and employ you, and your friends, and your neighbors, that’s OK. I’m all for it. Let them come. And let Japan come."
Trump made these remarks as the Canadian government was signing a landmark trade agreement with China, which included provisions to allow the import of up to 49,000 Chinese new energy vehicles into Canada.
Beyond their foothold in Mexico, successful entry into the Canadian market would provide Chinese automakers with another strategic position in North America, from which they could target the vast US market.
The administration of former President Joe Biden had previously imposed a 100% tariff on all Chinese cars imported into the US. Furthermore, a series of additional US restrictions targeting Chinese technology present another barrier for Chinese automakers seeking to enter the American market.
Setting aside political and trade factors, a collaboration between Ford and Xiaomi to jointly produce cost-effective new energy vehicles represents a logical choice for the American automaker—Ford currently lacks an entry-level model in its lineup, following the discontinuation of the EcoSport after the 2025 model year.
Ford's small, affordable new energy vehicle, based on a General Motors electric platform, is expected to launch officially in 2027.
Speaking about the challenges Ford faces in the new energy vehicle sector during an interview with Yahoo Finance at the Detroit Auto Show, Farley said: "I think, whether it's software-defined vehicles or electrification, these two technologies are separate but linked. When such new technologies disrupt a traditional industry like automobiles, it's important to understand that in the early stages of industry development, the landscape will continue to change."
From this perspective, while a partnership with Xiaomi carries potential costs, it holds a certain rationale from a corporate development standpoint.
Michael Dunne, an automotive industry analyst and China market expert, wrote late last year: "Automakers currently face three major challenges simultaneously—securing funding for the electric transition, developing autonomous driving technology, and surviving amidst a trade war. Against this backdrop, the Sino-foreign joint venture model is bound to continue evolving, the scale of Chinese car exports will keep expanding, and Western automakers' reliance on Chinese supply chains will deepen."
Dunne pointedly highlighted the dilemma facing global automakers. He believes that Western automakers, in their rush to capture the Chinese market, have ceded 50% equity in joint ventures, transferred core Western technology to Chinese partners—helping them build better vehicles—achieving short-term market efficiency at the expense of their own long-term strategic advantage.
Now that China has established absolute advantages in automotive production scale, cost control, and even technology, Dunne questions whether the industry's tipping point has already arrived and whether the Sino-foreign joint venture model is merely the tip of the iceberg for the future industry structure.
He stated: "The core question is whether Western automakers can still maintain truly independent operations, or whether they will ultimately become brand operators for vehicles whose production is controlled by Chinese companies."
