Like many long-established carmakers, Ford has found itself under growing pressure from Tesla at home and an increasingly assertive wave of Chinese manufacturers abroad.

These newer players seem more adaptable, often leading in electric-vehicle design and software integration, areas where legacy automakers like Ford have struggled to keep pace. Chief executive Jim Farley doesn’t shy away from acknowledging the scale of that challenge.

Read: Ford CEO Warns China Could Put Every American Carmaker Out Of Business

Not long after Ford’s boss remarked that the threat from Chinese automakers now exceeds what Japanese carmakers posed in the 1980s, Jim Farley described the “shocking” moment that spurred him to rethink the company’s direction.

He said Ford’s engineers were taken aback when they began tearing down both the Tesla Model 3 and several Chinese-built electric cars, realizing just how far ahead those manufacturers had moved in terms of cost, efficiency, and software integration.

“I was very humbled when we took apart the first Model 3 Tesla and started to take apart the Chinese vehicles,” he told former Wall Street Journal reporter Monica Langley on the Office Hours: Business Edition podcast. “When we took them apart, it was shocking what we found.”

What Ford Found Inside

Ford’s engineers quickly learned that the Mustang Mach-E carried an extra mile of electrical wiring compared with the Model 3, adding unnecessary weight and complexity. That revelation, and others like it, convinced Farley to separate the company’s electric operations into a dedicated arm, the Model E division, in 2022.

“EVs are exploding in China,” Farley said, noting that the Chinese government had “put its foot on the economic scale” in support of battery-powered vehicles.

“We can’t walk away from EVs, not just for the US, but if we want to be a global company, I’m not going to just cede that to the Chinese,” he added.

Financially, Ford’s move to establish the Model E division has yet to bear fruit, losing more than $5 billion last year. However, Farley isn’t prepared to throw in the towel.

“I knew it was going to be brutal business-wise,” he said. “My ethos is, take on the hardest problems as fast as you can and do it sometimes in public because you’ll solve them quicker that way.”

If You Can’t Beat ‘Em, Join ‘Em

Last year, Farley revealed that he had been driving a Xiaomi SU7 daily and praised the electric sedan. Evidently, he understands not only the importance of answering the threat posed by the Chinese but also just how quickly Ford needs to respond.

One of the company’s most crucial upcoming projects is a mid-size electric pickup priced around $30,000. Built on a new architecture designed to underpin several future models, it represents the next test of whether Ford can match the speed and efficiency of the competition

Last year, Ford chief executive Jim Farley surprised many when he revealed that his daily driver was a Xiaomi SU7 quietly imported into the United States. Now, another American industry leader has joined the conversation about the Chinese electric sedan that’s been causing a stir both at home and abroad.

Rivian chief executive RJ Scaringe revealed his team recently tore down an SU7, and, likely Farley, he’s full of praise for it. However, he says that developing and building a vehicle like it in China is very different than doing the same in the US.

How Good Is It?

According to Scaringe, the SU7 is a “really well executed, heavily vertically-integrated technology platform” that is “nicely done.” He added that if he were living in China, it’s one of the cars that he’d personally consider buying.

Read: Rivian’s CEO Would Rather Lose You As A Buyer Than Add Apple CarPlay

One of the SU7’s most compelling advantages is its price. With a starting figure of 215,900 yuan, roughly $30,000, it undercuts much of the competition. After taking the car apart, Scaringe explained that Rivian “learned nothing from the teardown” about how Xiaomi keeps costs so low.

There was no hidden engineering trick or obscure cost-cutting secret waiting inside the panels. The real explanation, he said, is simple: China’s extensive government support.

China Plays By Other Rules

The distinction, according to Scaringe, comes down to the economic landscape in which Xiaomi operates. State backing shifts the financial balance from the ground up, creating an environment that’s nearly impossible to replicate in the US.

“The cost of capital is zero or negative, meaning they get paid to put up plants,” Scaringe told Business Insider. “It’s a very different opportunity.”

Government Grants Alter The Playing Field

While Rivian was provided a $6.6 billion loan for its new production facility in Georgia, Scaringe noted that automakers in the People’s Republic like Xiaomi receive outright grants from their own government, which is “just not something that exists in the US.”

He also noted that China’s lower labor costs further tip the scales.

“When you take the cost of capital down to zero or less than zero and you have a cost of labor that’s very low – you can do the math, you can build a spreadsheet that can arrive at exactly how they’re doing it,” he explained.

Scaringe added that the reality behind Xiaomi’s pricing isn’t mystical or secretive. “I think it’s like Wizard of Oz. I think when people think there’s a Wizard of Oz, it’s not helpful. It’s like there is no magic in the world. Everything could be analyzed and calculated.”

While it might seem like Xiaomi can do no wrong with its much-hyped SU7 and YU7 electric models, the company has been nursing a legal headache since mid-year over one particularly controversial feature: the carbon fiber hood offered for the SU7 Ultra.

What began as a flashy performance upgrade has now turned into a courtroom lesson in customer trust.

Read: Chinese Super Sedan Owners Furious Over Fake Aero Ducts In $6K Aero Hood

Originally touted as a functional component with sizable air ducts designed to improve cooling, the hood turned out to be all show and no substance. Owners soon discovered that the vents had no effect on airflow, and their disappointment quickly became public.

Shortly after news broke about customer concerns, an owner took the Chinese brand to court, alleging it had engaged in false advertising.

They paid 42,000 yuan or $5,800 for the carbon fiber hood, but after removing it and disassembling the front end of the EV, they found its internal structure was virtually identical to the standard aluminum hood.

The Suzhou Intermediate People’s Court in Jiangsu Province has upheld the original judgment ruling in favor of the SU7 Ultra owner, while also dismissing Xiaomi’s appeal.

The consumer electronics giant will now need to refund the 20,000 yuan ($2,800) deposit the owner made for the hood, pay 126,000 yuan ($17,640) in compensation, and cover 10,000 yuan ($1,400) in legal fees.

Other Lawsuits Could Follow

While these figures are just a drop in the bucket for a company like Xiaomi, it’ll no doubt be sweating the prospect of future payouts.

The case in question wasn’t a class action and involved just a single owner. It’s likely that following this judgment, other owners who shelled out for the expensive carbon fiber hood will also sue Xiaomi.

When the dispute first came to light, Xiaomi issued an apology, insisting the hood’s purpose was aesthetic rather than functional, meant to mirror the design of the record-setting SU7 Ultra Prototype.

To placate upset customers, it offered 20,000 Xiaomi reward points to each owner who purchased the hood, worth about 2,000 yuan, or roughly $280. Whether that modest gesture will be enough to prevent more legal action remains to be seen.

It’s not just Tesla under fire for how its electronic door handles respond after a crash, fire, or even a total power loss. In the early hours of Monday morning, a Xiaomi SU7 in China crashed and erupted in flames, and despite frantic attempts by bystanders to open the door and free the driver, the 31-year-old at the wheel did not survive.

Chinese media reported that the black SU7 crashed at around 3:15 a.m. The driver of the Xiaomi is said to have lost control, spinning into a wide median strip lined with shrubs and plants before coming to rest on the opposite side of the road in Chengdu. Moments later, the vehicle burst into flames.

Watch: Xiaomi Blames iPhone For EV Taking Off On Its Own

Video captured from the scene showed several men frantically attempting to smash the driver’s window while trying in vain to open the driver’s door. One of the men was repeatedly punching the window, while another can be seen trying to kick it out.

They were soon forced to retreat as the flames spread, waiting for firefighters to arrive. Although the crews managed to extinguish the blaze, they were unable to save the driver.

Early reports suggest the 31-year-old may have been driving under the influence of alcohol.

Questions Over Safety Systems

The Xiaomi SU7 features simpler pull-type exterior door handles compared to some other EVs. As with most modern vehicles, the doors are designed to automatically unlock when an accident is detected or airbags are deployed.

For reasons yet unclear, that system appears to have failed in this case. The car is equipped with a manual release inside the cabin.

Xiaomi Shares Take a Hit

News of the incident spread quickly, amplified by images and videos of the burning SU7 circulating on Chinese social media, sending Xiaomi’s stock tumbling by as much as 8.7 percent, its sharpest one-day drop since April. Shares eventually closed 5.24 percent lower, erasing billions from the company’s valuation.

More: China Might Kill Electric Flush Door Handles With These New Rules

In April, three individuals were killed after a Xiaomi SU7 crashed in China’s eastern Anhui province. It has been claimed that the two individuals in the front seats were unable to open the doors as they immediately locked after the crash. An individual was pulled from the rear after an eyewitness smashed out one of the windows, but they died from their injuries.

The incident adds to mounting scrutiny over electronic and semi-electronic door mechanisms in China. Regulators are considering restrictions on such designs amid broader safety concerns, while U.S. authorities continue to probe similar failures in Tesla models.

Xiaomi shares plunged nearly 9% after a fatal crash involving its SU7 electric car, Bloomberg reports

According to the outlet, a 31-year-old driver in China collided with another vehicle, crossed into the opposite lane, and the car caught fire. Witnesses tried to pull the man… pic.twitter.com/yPQ70FoKXN

— NEXTA (@nexta_tv) October 13, 2025

A video of a Xiaomi SU7 sedan seemingly taking itself for a spin went viral over the weekend in China, sparking safety concerns. The internet was quick to imagine hacked cars and rogue AI, but Xiaomi quickly shut down the drama, claiming that the mysterious drive was simply triggered by a remote command from the owner’s Apple iPhone.

More: Xiaomi Boss Admits They Bought Teslas And Tore Them Down To Learn Every Secret

The incident took place on September 30, when the owner, identified as Li Xiaoshuang, parked his light blue SU7 outside a store in the city of Weihai. Minutes later, while he was inside the shop with a woman, the car began to creep forward with no one behind the wheel. Realizing what was happening, Li rushed outside and sprinted after his runaway EV.

A Confusing Start

After sharing the surveillance footage, the owner contacted Xiaomi’s customer service to report the car’s strange behavior. The representative informed him that the EV had received a remote command from a device labeled “iPhone 16.2.” The owner, however, insisted he hadn’t touched his phone nor did he own an iPhone 16 and provided the video as proof.

The mix-up was later clarified when engineers confirmed that “16.2” wasn’t referring to a newer iPhone model at all, but to the internal identifier Apple assigns to the owner’s iPhone 15 Pro Max. Likewise, an iPhone 16 Pro also linked to the vehicle, belonging to the woman seen in the video, appeared under the code “17.1.”

Technical Verification

After reviewing the EV’s data logs and the smartphones’ activity records, Xiaomi engineers confirmed that the car had, in fact, received a valid remote parking command from the owner’s iPhone at that exact moment. The company also verified that every system operated correctly.

More: China Recalling Over A Third Of All Xiaomi SU7s After Deadly Crash

The company issued a formal apology for the misunderstanding and thanked the owner for cooperating in the investigation. They also emphasized that all vehicle systems operated as intended. The owner eventually acknowledged Xiaomi’s findings after witnessing the data verification himself, and urged others to stop spreading false claims about software bugs or hacks.

Accidental Commands, Real Consequences

So what could have triggered the remote parking command without the owner realizing it? The most likely explanation is that the feature was unintentionally activated through the iPhone app or its voice assistant.

Still, the idea that a simple tap or phrase can send a two-ton machine rolling on its own should give manufacturers pause. As cars become more like smartphones on wheels, it might be time for automakers to impose tighter safeguards on how these systems talk to each other, rather than assuming every “smart” feature is foolproof.

Below you’ll find the official statements from both Xiaomi and the owner.

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Xiaomi’s Official Statement

Regarding the recent online video of a Xiaomi car suddenly driving away, we attach great importance to this incident and immediately established a special task force to investigate and collaborate with the user to verify the situation.

Both parties verified the user’s authorized mobile app operation logs and vehicle data, reaching a consensus: “The vehicle’s backend data matches the iPhone 15 Pro Max’s operation logs, response times, and vehicle exit commands, ruling out any vehicle quality issues.”

During the investigation, with the user’s consent, we obtained vehicle backend data and operation logs from two phones with vehicle control permissions: the female owner’s iPhone 16 Pro and the male owner’s iPhone 15 Pro Max, with corresponding device model identifiers of iPhone 17.1 and iPhone 16.2, respectively.

The vehicle’s backend data shows that during the time window described by the user, the vehicle received a parking assist command from the iPhone 15 Pro Max, which activated the parking assist feature (activation requires the vehicle to be within close range of the phone’s Bluetooth connection) and initiated the exit.

When contacting online customer service regarding the user’s feedback, they stated that the parking assist command originated from an iPhone 16. We have verified that our online customer service representative confused the device model identifier (iPhone 16,2) with the corresponding device model (iPhone 15 Pro Max) during communication with the user, leading to misunderstanding and miscommunication. We apologize for this and will continue to improve our service efforts.

Xiaomi Auto always prioritizes user safety and user experience. Thank you for your attention and support.

Owner’s Response:

I am the owner of the vehicle in question. The above information is true. The Xiaomi Auto team has verified the data with me in person and confirmed it is correct. Thank you for your professionalism and service. Please refrain from spreading rumors. Thank you.

Sources: Weibo, Xiaomi