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- Far too many Chinese automakers are making too many EVs, says General Motors CEO Mary Barra."Right now, there is an incredible price war going on," Barra said.Tesla's biggest rival in China, BYD, said discounting was affecting its "short-term profitability."
General Motors CEO Mary Barra says China's automakers aren't just waging a brutal price war over EVs, they have an overproduction problem, too.
Barra was speaking to The Verge's Nilay Patel on the outlet's "Decoder" podcast when she was asked how GM intended to compete against Chinese automakers.
"Right now, there is an incredible price war going on. You can't have over 100 different OEMs in a country trying to compete, especially now that they're competing on price," Barra told Patel in an episode that aired Wednesday.
"I would also say the market is over capacity in China, which is causing, from a business perspective, exporting to other markets, but they're also doing it while highly subsidized in many cases," she said.
Barra said that when it comes to competing in China, GM will strike a balance between meeting China's regulatory and safety requirements and "regularly benchmarking our Chinese competitors."
Representatives for Barra at GM did not respond to a request for comment from Business Insider.
Barra made a similar observation when she spoke at the TechCrunch Disrupt conference in October 2024. She said the EV market in China was oversaturated, and vehicle prices were getting "lower and lower" because of it.
"You have to look at what the sustainable business is because the situation that is there right now is not sustainable," Barra said.
Chinese automakers themselves have also acknowledged the damaging effects a price war could have on their businesses.
On October 1, BYD said in an exchange filing that it sold 396,270 cars in September, a 5.5% decline from the 419,426 cars it sold a year ago.
BYD said in its August earnings report that its "short-term profitability" had been weighed down by "industry malpractices" such as "excessive marketing" and discounting.
Xpeng founder and CEO He Xiaopeng said in a November interview with The Straits Times that most Chinese automakers won't survive beyond the next decade.
"I personally think that there will only be seven major car companies that will exist in the coming 10 years," He said, without specifying the names of the seven companies.
In an exchange filing last week, GM said it was taking a $1.6 billion charge "based on a planned strategic realignment of our EV capacity and manufacturing footprint to consumer demand."
Under the Biden administration, EV buyers could enjoy a $7,500 consumer tax credit if they bought a new EV, and a $4,000 consumer tax credit for a used EV. The Trump administration eliminated those federal EV incentives last month.
Without those incentives, GM said it expected the "adoption rate of EVs to slow."
"We do expect, and I think the industry expects, and the external forecasters believe, that we're going to see slower EV growth, but I think the important thing is we think we'll still see growth," Barra told The Verge's "Decoder" podcast.
GM's shares are up by over 27% year to date.
