Mary Barra, CEO of General Motors (GM), has raised concerns over the intensifying electric vehicle (EV) price war in China, asserting that it exerts significant pressure on automakers worldwide.
During a discussion at Fortune’s 2024 Most Powerful Women Summit, she described the situation as a “race to the bottom” with many companies struggling to maintain profitability. “It has become a race to the bottom with pricing and the level of subsidies,” Barra told Fortune editor-in-chief Alyson Shontell.
Barra emphasized GM’s commitment to distinguishing itself from the influx of affordable Chinese electric vehicles (EVs) flooding global markets. She acknowledged the complexity of the situation, stating that while she generally supports free trade, China’s rapid adoption of EVs and hybrids, coupled with substantial subsidies, has transformed the local automotive landscape.
This has prompted several major global auto markets, including the United States and European Union, to increase tariffs on Chinese EV imports to protect domestic manufacturers. In May, President Biden announced a 100% tariff rate on EVs imported from China, citing “unfair trade practices” and aiming to “protect American manufacturers.”
The rise of low-cost EVs from Chinese manufacturers, such as BYD’s Seagull, which starts at under $10,000, has posed challenges for legacy automakers. Even in international markets like South America, the Seagull, known as the Dolphin Mini elsewhere, is among the most affordable options at approximately $20,000.
Despite the competitive landscape, GM is navigating difficulties in China, where its sales have declined by double digits this year. The company reported a 21% drop in overall sales in China for the third quarter, coinciding with a historic shift where EVs and plug-in hybrid electric vehicles (PHEVs) outsold gas-powered cars in the country.
However, Barra remains optimistic about GM’s future prospects. The company has seen positive results from its investments in new energy vehicles (NEVs), achieving a 53% market share in NEV sales in Q3, surpassing gas-powered vehicle sales for the first time in China. In the United States, GM’s electric vehicle sales surged by 60% in the same quarter, totaling a record 32,095 units sold. “GM’s EV portfolio is growing faster than the market because we have an all-electric vehicle for just about everyone,” said Rory Harvey, GM’s executive vice president of global markets.
Barra anticipates continued growth as charging infrastructure improves across the United States, stating, “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.”
Source: Fortune