"We know our competition is Nio and Tesla, and we have to beat them, not match them," Ford CEO Jim Farley said.

(Image credit: Ford China)

The rise of Nio and Tesla seems to be unstoppable, and the CEO of auto giant Ford sees them as major competitors.

"We know our competition is Nio and Tesla, and we have to beat them, not match them," Ford CEO Jim Farley said Wednesday at a webcast of the Wolfe Research conference.

Farley did not comment more on Nio and Tesla, but this is the second time he has mentioned the two electric vehicle (EV) companies in the past two months.

In late January, Farley said he "admires" two players in the EV space. Speaking on Yahoo Finance Live, he said:

Well, the companies that I think about that I admire because of their commitment — and frankly, the hard work they did to earn their reputation — are companies like Nio and Tesla.

They've been at this a long time. They engineer their vehicles differently. I'm most respectful of Tesla's profitability. They're now making more than $10,000 a vehicle in their second quarter earnings.

At the latest Wolfe Research conference, Farley also denied rumors that Ford might split its internal combustion engine (ICE) business from its electric operations.

Last week Bloomberg reported that Ford had evaluated spinning off a small portion of its electric vehicle business as part of a restructuring in an effort to capture investor value for some EV startups.

"We have no plans to spin off our electric business or our ICE business," Farley said Wednesday.

Farley said Ford believes it can make the traditional internal combustion engine vehicle business much cheaper through better quality, lower construction costs and reduced vehicle complexity.

"To get the margins ... that we see at a company like Tesla, we need to have real experts that can drive that scale," Farley said, adding that Ford needed to hire more people who work in the areas of electrical components, advanced electrical architectures and the digital customer experience.

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