Ford vice chair warns that fast-moving, advanced Chinese automakers threaten US industry

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Corrections & Clarifications: This story has been updated to correct information, including assertions about tariffs incorrectly attributed to John Lawler.

While tariffs present a fresh headwind to the North American automotive industry, for John Lawler, Ford Motor Co.’s vice chair, they are not the greatest threat.

The real threat right now is China, he said.

“I don’t think we can say no, they’re not going to come to the U.S.,” he said, despite current policies blocking Chinese-made vehicles from the U.S. market. “The Chinese are coming, and they are a force to reckon with.”

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Profits drying up

China once served as a haven for global automakers to lower costs and generate enough capital to fund costly innovation projects in the U.S. But both Ford and its crosstown competitor General Motors are working to restructure Chinese operations. GM said it is shuttering facilities and taking on $5 billion in restructuring costs.

Global automakers enjoyed a large chunk of $80 billion in profits from the Chinese auto market, Lawler said, but over the past three years, profits there slid 40%.

Ford's China business made $900 million in earnings before interest and taxes last year, a figure that includes exported vehicles. But not only is the money drying up — the same competition eating Detroit automakers' profits is coming for their American buyers as well.

Lawler most recently served as chief financial officer at Ford, and took on his new role focused on strategy, partnerships, alliances and corporate development in late February ahead of the company’s last earnings report. 

He has been on the road ever since, he said on the call, touring Europe and Asia to see for himself the progress Chinese automakers made in recent months.

The transformation of the industry is accelerating, he said. Not only are the Chinese leaders in electrification, but the pace of change in product development at Chinese automakers is “unbelievable.”

“From concept to market, two years, maybe less? And that's shrinking,” he said. “They're leaders in battery technology, they're leaders in development, they have the lowest cost structure in the industry. All of that's coming together.”

China's BYD is growing rapidly

China's best-selling auto brand BYD Co. saw global sales rise 58% in the first quarter of 2025 compared with the year before, as the automaker delivered 986,098 vehicles, of which 416,388 were all-electric. The company, chaired and operated by its founder Wang Chuanfu, recently revealed an ultrafast charging system that can add 400 kilometers of range in just five minutes.

Headquartered in Shenzhen, BYD aims to sell 5.5 million vehicles in 2025, exporting 800,000. BYD doesn’t sell passenger cars in the U.S. for two reasons: high levies imposed on China-made vehicles and a ban on what it calls smart driving EV technology. Since 2022, BYD produces only EVs and hybrids.

On April 1, BYD also posted record net income and full-year revenue over $100 billion.

Comparatively, Ford sold 501,291 vehicles in the first quarter. Its larger cross-town competitor GM sold 693,363 vehicles, while Stellantis sold 293,225.

“With the shifts that are happening in the industry, we believe we need to be a global player. The competitive nature of where the Chinese are heading, they’re looking to dominate around the world. If we get pushed back into just operating here in the U.S., and being a U.S. automaker, large profit, but where does that put us as a company in 10, 15 years? We have to compete, and we have to compete globally against the best that are out there.”

Tariffs eat profits

Meanwhile, uncertainty over tariffs has largely consumed the North American auto industry. President Donald Trump signed an executive order to implement a 25% tariff on foreign-built vehicles built starting April 3, with a few key auto parts subject to a tariff starting May 3. 

Reciprocal tariffs, also announced April 2, started at 10% on U.S. trading partners. Exactly one week later, he paused most of them for 90 days.

Even without looming tariff threats, Lawler said not one automaker in the U.S. can afford the changes needed to compete with the Chinese on its own. It takes serious financial and human capital to improving advanced digital architectures, software-defined vehicles and multienergy powertrain options to meet companies like BYD, and whoever can bring cost-structure and supply structure outside of China will “win.”

“It's only going to get tougher. How are we going to replace that to fund all of these things coming at us?” he asked. “We have to think about the industry differently. We have to think about joint ventures, we have to think about partnerships. Maybe there'll be consolidation. But if something doesn't change, all of us can't do all of this on our own, especially with what has been one of the largest profit generators in this industry over the last 10 to 12 years drying up.”

Lawler reiterated that tariffs would eviscerate automaker profits, as Ford CEO Jim Farley has repeatedly outlined, even though he said Ford is among the best positioned to weather the storm.

Ford asserts that it is more shielded from tariff threats than many competitors and has touted its manufacturing process as the “most American” of the Detroit automakers in recent advertisements to customers. Lawler said the company will reveal more information about how it is handling tariffs at its earnings call early next month.

“We assemble more vehicles than anybody else, we have the most hourly workers, and we export the most vehicles from the U.S.” Lawler said. “Are there going to be headwinds as this thing unfolds? There will be.”

This story has been updated to correct an error and update headlines.

Senior autos writer Jamie L. LaReau contributed to this report.

Jackie Charniga covers General Motors for the Free Press. Reach her at jcharniga@freepress.com.