Feb 15 Reuters Ford Chief Executive Jim Farley said on Thursday the automaker is reworking its electric vehicle strategy to compete with Chinese rivals, and opened the door to collaboration with other automakers to cut EV battery costs.

BYDBYDCOH.UL and other lowcost Chinese electric vehicle makers are now one of the biggest challenges to Ford39;s global business, Farley said at a conference hosted by Wolfe Research.

If you cannot compete fair and square with the Chinese around the world then 20 to 30 of your revenue is at risk over the next several years, Farley said.

Ford has projected it will lose 5 billion to 5.5 billion on its EVs this year. The company has launched a dedicated skunk works team separated from the company39;s main engineering operations to design a small, lowcost EV that could compete with BYD39;s Seagull model, the CEO said. Ford is also evaluating its battery strategy.

We can start having a competitive battery situation. We can go to common cylindrical cells that could add a lot of leverage to our purchasing capability. Maybe we should do this with another OEM automaker, Farley said.

BYD can produce its small Seagull EV for 9,000 to 11,000 in materials, Farley said.

Last year, 25 of all vehicles sold in Mexico were sourced in China, he said. The world is changing.

BYD is considering opening an assembly plant in Mexico, Japan39;s Nikkei reported earlier this week.

In addition to competitive pressure from Chinese rivals, Farley said…