GM CEO warns China’s EV price war is a ‘race to the bottom’ despite push for affordability

Mary Barra is sounding the alarm. GM’s CEO warned that China’s escalating EV price war is putting automakers globally under intense pressure. Although she called it a “race to the bottom” with many companies losing money, Barra admitted that the American automaker isn’t immune.

“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.

At Fortune’s 2024 Most Powerful Women Summit this week, GM’s CEO said the company wants to stand out despite the influx of low-cost Chinese electric cars in global markets.

Although she generally believes in free trade, Barra explained things are more complicated in China. The country’s rapid adoption of EVs and hybrids has caused major changes in China’s auto market with heavy subsidies and many still losing money.

Many major global auto markets, including the US and EU, recently raised tariffs on Chinese EV imports to “protect” domestic companies.

In May, President Biden announced a 100% tariff rate on EVs imported from China, citing “unfair trade practices.” In a press release, the administration said the move would “protect American manufacturers.”

Legacy automakers are struggling to keep up with low-cost EVs from China, like BYD’s Seagull, starting under $10,000 (69,800 yuan).

Even in overseas markets, like South America, the Seagull (known as the Dolphin Mini overseas) is among the most affordable electric options at around $20,000 (99,800 reals).

GM looks to overcome China’s EV price war

GM is among most foreign automakers feeling the heat in China’s surging EV market. Although EVs and PHEVs, or new energy vehicles (NEVs), outsold gas-powered cars for the first time in China this summer, GM’s sales in the region are down by double-digits this year.

As gas-powered vehicles continue falling out of favor, GM’s overall sales in China slid 21% in Q3 compared to last year.

Despite this, Barra remains optimistic as its investments over the past few years are starting to pay off. GM and its joint ventures also sold more NEV models than gas cars for the first time in China in Q3, with a 53% share.

In the US, GM’s electric vehicle sales surged 60% in Q3, with a record 32,095 models sold. “GM’s EV portfolio is growing faster than the market because we have an all-electric vehicle for just about everyone,” Rory Harvey, GM’s executive vice president of global markets, said.

With its core brands, including Cadillac, Chevrolet, and GMC, all seeing strong YOY growth, GM topped Hyundai Motor (including Kia and Genesis) and Ford to become the second to only Tesla in Q3, according to Cox Automotive.

Barra suggested that more growth is on the way, especially as more charging options are available in the US.

“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,” Barra said.

Last month, the company released its NACS adapter, unlocking Tesla’s vast Supercharging network for GM EV owners.

GM’s leader stressed, “We’ve got to continue to have affordable vehicles that people want to own.”

The company has several new electric models that are quickly winning over customers, including the Chevy Equinox, Blazer, and Silverado EVs.

Launched last month, the 2025 Chevy Blazer EV is available at a lower $45,995 price tag. Meanwhile, the long-awaited $35,000 electric Equinox is finally arriving at dealerships. Both qualify for the $7,500 EV tax credit.

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