Ford’s CEO Jim Farley has revealed how the company’s Formula 1 partnership with Oracle Red Bull Racing is helping the automaker compete against Chinese electric vehicles through advanced AI and software capabilities. In an interview with Bloomberg published Sunday, Farley explained that developing the Red Bull Ford Powertrains engine—which will power Red Bull’s 2026 F1 season car unveiled Friday—has given Ford critical advantages in software-defined vehicle technology.
The partnership, announced in 2023, focuses heavily on software development for hybrid systems, predictive component failure analysis, and AI-powered control systems. Farley emphasized that these capabilities are “the essence of the new software-defined vehicle globally to beat China,” acknowledging that Chinese automakers “are really good” at this technology. The Ford CEO stated that innovations from F1 development, including understanding large language models (LLMs) and predictive maintenance algorithms, can be directly applied to Ford’s commercial vehicles like the Transit van, benefiting both Red Bull driver Max Verstappen and Ford’s customers.
This marks Ford’s return to Formula 1 after a hiatus; the company previously supplied F1 engines from 1967 to 2004. Farley has been notably candid about Chinese automakers’ technological superiority, particularly in the smart vehicle space. In October 2024, he admitted to driving a Xiaomi EV for six months and not wanting to give it up. At the July Aspen Ideas Festival, he praised Chinese vehicles for having “far superior in-vehicle technology,” specifically highlighting Xiaomi’s seamless phone-to-car pairing capabilities.
Chinese automobile manufacturers have aggressively pursued smart technology integration, with the industry evolving beyond traditional EVs. A CATL executive at the 2024 World Economic Forum announced that Chinese automakers are rebranding their vehicles as “EIVs” (electric intelligent vehicles) rather than simply EVs. The AI integration trend accelerated after Chinese AI company DeepSeek launched its R1 model, prompting major automakers including BYD, Geely, and Great Wall Motor to announce plans to integrate the AI system into their vehicles.
Ford’s F1 strategy represents a direct response to this Chinese technological advantage, leveraging motorsport’s cutting-edge development environment to rapidly advance software capabilities that can be commercialized across Ford’s entire vehicle lineup.
Key Quotes
It’s a long list, but I would say the real signature for me is really the software — the control software for the hybrid system, predictive failure components.
Ford CEO Jim Farley explained to Bloomberg how developing the F1 engine has helped Ford deliver better value, emphasizing that software capabilities—not traditional mechanical engineering—are the key differentiator in modern vehicle development.
These are the essence of the new software-defined vehicle globally to beat China, and they are really good. We need these capabilities from Formula 1, and we can put them right in the Transit van.
Farley candidly acknowledged Chinese automakers’ technological superiority while explaining how Ford’s F1 partnership provides the software and AI capabilities needed to compete, with direct applications across Ford’s commercial vehicle lineup.
They have far superior in-vehicle technology.
Speaking at the Aspen Ideas Festival in July, Farley praised Chinese vehicles’ smart technology, specifically citing Xiaomi’s phone-to-car pairing capabilities, demonstrating his ongoing recognition of the competitive threat from Chinese automakers.
Our Take
Ford’s F1 strategy reveals a critical insight: traditional automakers now view AI and software as their primary competitive moat against Chinese manufacturers. Farley’s unusual candor about Chinese technological superiority signals that Western automakers have moved past denial into active response mode. The integration of LLMs and predictive AI into vehicle development through motorsport partnerships represents an innovative approach to rapid capability building. However, the challenge remains formidable—Chinese automakers are simultaneously integrating cutting-edge AI like DeepSeek’s R1 model while Ford is still catching up on fundamentals. This race isn’t just about electric powertrains anymore; it’s about who can build the most intelligent, software-defined vehicle platform. The automotive industry’s transformation into an AI-first sector is accelerating faster than many anticipated, with Formula 1 serving as an unexpected catalyst for commercial AI innovation.
Why This Matters
This story highlights the intensifying global competition in automotive AI and software-defined vehicles, with traditional Western automakers racing to catch up to Chinese manufacturers’ technological advantages. Ford’s acknowledgment that Chinese EVs possess superior smart technology—coming from a major American automaker’s CEO—underscores how significantly the competitive landscape has shifted. The integration of AI technologies like LLMs and predictive analytics into vehicle development represents the industry’s transformation from mechanical engineering to software-first design.
The partnership between Ford and Red Bull Racing demonstrates how AI and advanced software are becoming the primary battleground in automotive competition, not just traditional engineering. Chinese automakers’ rapid adoption of DeepSeek’s AI model and their rebranding to “electric intelligent vehicles” shows they’re positioning vehicles as AI-powered platforms rather than mere transportation. For the broader AI industry, this validates that AI integration is becoming a competitive necessity across manufacturing sectors, with automotive serving as a critical proving ground for commercial AI applications that impact millions of consumers globally.
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Source: https://www.businessinsider.com/ford-ceo-jim-farley-f1-red-bull-beat-china-software-2026-1