Ford's CEO and CFO took a drive in a Chinese EV. What they said next reveals a lot about the state of the US auto industry.

• Ford CEO Jim Farley and CFO John Lawler took a test drive in a Chinese electric SUV in early 2023.
• Both men were left shocked and impressed by the quality of the Chinese-made EV.
• "Jim, this is nothing like before," Lawler told Farley. "These guys are ahead of us."

Ford's C-suite executives were left humbled by China's electric vehicle makers after taking a test drive in a Chinese-made EV last year, The Wall Street Journal reported on Saturday.

Ford CEO Jim Farley and CFO John Lawler had visited China in early 2023 when the pair decided to take Changan Automobile's electric SUV for a spin, per The Journal.

The Chinese state-owned automaker is a longtime joint-venture partner of Ford's.

The quick test drive, in which Farley drove and Lawler rode shotgun, gave the executives a taste of what it was like to ride in a Chinese-made EV.

Farley and Lawler were left both shocked and impressed by how smooth and quiet their drive was, The Journal reported.

"Jim, this is nothing like before," Lawler told Farley, per The Journal.

"These guys are ahead of us," Lawler added.

Farley's fears were piqued again in May when he made another trip to China, The Journal reported.

"John, this is an existential threat," Farley told Ford board member and former Goldman Sachs executive John Thornton after his trip.

Representatives for Ford did not immediately respond to a request for comment sent outside regular business hours.

Chinese automakers like BYD have been dominating the EV race. For one, Chinese carmakers have been making inroads into developing markets like Brazil and Mexico, as well as Southeast Asian countries like Thailand.

According to data compiled by technology firm ABI Research for Business Insider, Chinese automakers accounted for 88% of the eV market in Brazil and 70% in Thailand in the first quarter of this year.

The rapid ascendance of Chinese-made EVs has since prompted Western governments to introduce trade restrictions on them.

In May, the US government imposed crippling tariffs on Chinese automakers , effectively shutting them out of the US auto market. The European Union followed suit soon after when it introduced tariffs a month later .

To be sure, Ford isn't the only American automaker scrambling to compete against the Chinese.

Even Tesla, widely considered to be a pioneer in EVs, has faced pressure from the Chinese. In late 2023, BYD briefly dethroned Tesla as the world's largest EV producer .

When Tesla held its quarterly earnings call in January, CEO Elon Musk acknowledged the threat posed by Chinese automakers , calling them "the most competitive car companies in the world."

"If there are no trade barriers established, they will pretty much demolish most other car companies in the world," Musk told investors at the time.