China’s increasing EV competitiveness is exerting pressure on major automakers, and GM is no exception, says its CEO.
Speaking at the Fortune Most Powerful Women Summit, GM CEO Mary Barra said there have been structural changes in China following the country’s larger adoption of hybrids and electric vehicles. GM has made moves to capitalize on the growing importance of EVs and is looking to stand out even as more than a hundred Chinese companies flood the market with low-cost options, many of which are still not making money, Barra added.
“It has become a race to the bottom with pricing and the level of subsidies,” Barra told Fortune editor-in-chief Alyson Shontell on Wednesday.
Barra said she generally believes in free trade and competing on product quality and customer value, but when it comes to China, things are complicated. Several countries have imposed tariffs on the import of Chinese EVs, including the U.S. and Canada. The EU also announced a tariff of as much as 48% on China-made vehicles earlier this month. President Biden raised the tariff on Chinese EVs to 100% earlier this year to “protect American manufacturers from China’s unfair trade practices.”
GM’s third-quarter deliveries in China declined 21% year over year, compared with a 2% year-over-year decrease in the U.S. Still, the company’s big EV investments have started to pay dividends, with “new energy vehicles” like battery electric vehicles and plug-in hybrids surpassing its sales of internal-combustion vehicles in China for the first time.
“Every quarter, the charging infrastructure gets better and it’s going to open up for more people to be able to legitimately consider an EV if it’s their only car,” @GM CEO @mtbarra tells #FortuneMPW. https://t.co/cAKB7BxVjH pic.twitter.com/pUEbqkS7vS
— FORTUNE (@FortuneMagazine) October 16, 2024
GM has laid off staff in China in recent months, and Barra said that the company is restructuring its business in the region with the help of its local partner SAIC. Despite recent lackluster sales, Barra said the company is still committed to the China market.
"China is still an important market," Barra said. "It's the largest market, and it still has tremendous growth potential."
While the U.S. has lagged behind China in EV adoption, Barra offered hope for an all-electric future. Though many people who own an electric vehicle may also own a gas-powered car right now, as EVs become more affordable and charging infrastructure improves across the country, many more will likely turn to EVs, she said.
GM has already partnered with Tesla to open its charging network to GM’s EV customers and struck a partnership last year to offer charging at Pilot and Flying J travel centers.
“I think, every quarter, the charging infrastructure gets better, and it’s going to open up for more and more people to be able to legitimately consider an EV if it’s their only car and they need it for all of their use cases,” Barra said.
GM is now the second-bestselling EV maker in the U.S. behind Tesla, according to Cox Automotive, thanks to a lift from its Cadillac, Chevrolet, and GMC brands. GM’s EV deliveries reached 32,095 in the third quarter, jumping 60% compared with the year prior, the company reported, and Barra hinted that more growth could be on the horizon.
“We’ve got to continue to have affordable vehicles that people want to own and drive that are beautifully designed, and the charging infrastructure needs to continue to improve,” Barra said. “I know GM is doing its part, and it will continue.”
