America’s decline increases China’s control over global electric car markets

DETROIT – The disintegration of the U.S. electric vehicle market is increasingly raising fears of an existential crisis for the American auto industry, as Chinese automakers push forward with technologies that many still believe will define the next era of automobiles.

The latest warning sign came on Friday, when Stellantis disclosed a $26 billion charge from a major business overhaul, including a recall of electric vehicles, sending its shares down more than 20%. CEO Antonio Velosa blamed the blow on an overestimation of the pace of the energy transition.

This comes on the heels of other U.S. automakers largely pulling away from pure electric vehicles in favor of large, gas-guzzling trucks like the Ford F-150 and SUVs like the Chevrolet Suburban. Chinese automakers are taking the opposite approach and are growing globally, led by electric vehicles.

Old car manufacturers GM and ford motor It has lost billions of dollars on electric vehicles, and is pulling back in part because of the loss of the federal tax credit and weak consumer demand.

until Teslawhich was a pioneer in the electric vehicle industry, is facing pressure. It has been overtaken by Chinese automaker BYD in electric vehicle sales as the Elon Musk-led brand loses appeal and market share in Europe this year, while BYD has boosted its exports there and around the world. Last week, Tesla also scrapped two of its oldest and lowest-selling electric cars to repurpose a US factory for humanoid robots.

After leading the electrification movement for years, Musk appears increasingly focused on other areas, especially on robotics, self-driving taxis and his artificial intelligence company, which he combined with Space X in what was the largest merger in history.

Meanwhile, the global market share of Chinese brands has jumped nearly 70% in five years, and many experts see a threat to US automakers, including the expected entry of Chinese brands into America.

There is fear among global automakers that Chinese rivals such as BYD and Geely could flood global markets, undermining domestic production and car prices. The United States has taken a protectionist approach by imposing 100% tariffs on electric vehicles imported from China, but Chinese automakers have made inroads across Europe, South America and elsewhere.

Companies in the United States, where the auto industry accounts for about 5% of the country’s gross domestic product, are concerned about the long-term consequences.

“The Chinese auto industry represents an existential threat to traditionalism [automakers]said Terry Wichowski, a former GM executive who serves as president of the automotive division at engineering consulting firm Caresoft Global.

Many auto experts have used the word “existential” when discussing the growth of Chinese automakers.

“The existential threat to the US auto industry does not lie in Chinese electric vehicles alone, but rather a combination of continued government support, vertically integrated supply chains, and speed,” said Elizabeth Krier, CEO of the Center for Automotive Research. “These advantages reduce costs and accelerate implementation. At the same time, saturation in China’s domestic market is pushing automakers to aggressively expand into global markets.”

The Chinese auto sector has rapidly changed from an isolated industry to the world’s largest exporter of vehicles since 2023.

Experts said China’s growth is driven by government funding for companies, as well as the culture of innovation and speed that the country has instilled in its workers. The slowdown in the Chinese market and underutilization of factories have also forced companies to start exporting to major automobile markets globally.

China’s expansion into electric vehicles has been particularly impressive, with a nearly 800% increase globally, driven largely by sales growth in China from about 572,300 in 2020 to 4.95 million in 2025, according to GlobalData. Outside China, electric vehicle sales increased by more than 1,300%, from less than 33,000 to more than 474,000 per company.

While China has grown, the share of Detroit’s “Big Three” automakers — General Motors, Ford and Chrysler parent Stellantis, which is no longer based in the United States — has collectively declined from a global market share of 21.4% in 2019 to an estimated 15.7% in 2025, according to S&P Global Mobility.

That compares with China’s largest automakers BYD and Geely, which have grown from a market share of less than 3% to an estimated 11.1%, according to S&P Global Mobility.

The latest expansion announced by China is to Canada, a relatively small auto market that has removed 100% tariffs on vehicles imported from China amid a trade dispute with the Trump administration.

This follows the rapid growth of Chinese automakers in lower-income, less established regions that have historically been growth markets for American automakers, such as South America, India and Mexico. They are also making progress in Europe, where sales share rose from almost nothing in 2020 to nearly 10% in December, according to Germany-based Dataforce.

“Going electric made it easier for them, because they got the right products,” said Al Bidwell, a UK-based expert and director of Global Automotive Powertrain at GlobalData. “The fact that it was electric really opened the doors, and it wouldn’t have happened otherwise.”

Bidwill said China wants to get rid of its dependence on oil because it does not have large quantities of oil on its own. “She saw an opportunity to be a leader,” he added.

GlobalData expects Chinese electric vehicles to continue to grow globally to approximately 6.5 million units by 2030, followed by approximately 8.5 million in 2035. This includes continued growth in the United States, where a few Chinese-made vehicles such as the Buick Envision have been imported in recent years.

“Cracking the US market successfully and sustainably is no easy feat; it takes time, investment, patience and a willingness to make mistakes in the product but improve it until you get it right,” said Stephanie Brinley, principal automotive analyst at S&P Global Mobility. “It is expected that some Chinese automakers will have this combination and eventually look to participate in the US market.”

Brinley noted that it took Japan toyota motor From 1957 to 2001, reaching a market share of 10%, while the share of the South Korean Hyundai Motor Company will reach 10% after 26 years in 2022.

“Since the US is a mature market and sales are expected to remain between 16 million and 16.5 million units until at least 2035, new entrants will take share from existing brands and automakers,” Brinley said. “It remains to be seen how quickly they connect with consumers and which automakers lose volume or share with the new competitor.”

The Automotive Innovation Alliance, a lobbying group that represents nearly every U.S. automaker, wants to prevent that from happening. She called on Congress and the Trump administration in December to block Chinese government-backed advanced auto and battery manufacturers from entering US manufacturing.

“Automakers doing business in the United States face geopolitical and market pressures from China that pose a direct threat to America’s global competitiveness and national security,” John Bozella, CEO of the alliance, said in a letter to a US House Select Committee, citing unfair and anticompetitive trade practices and intellectual property theft.

US automakers have spent billions of dollars developing and launching electric vehicles under regulations and incentives from the Biden administration that were largely rolled back by the Trump administration.

This liberalization has opened the doors for automakers to de-emphasize fully electric vehicle plans.

General Motors and Ford alone announced more than $27 billion in writedowns recently due to their retreat from electric vehicles, including canceling new models and reducing production of existing models.

Jeep maker Stellantis on Friday reported a loss of 22 billion euros ($26 billion) from a business turnaround plan that includes rolling back electrification plans and reintroducing V8 engines to U.S. models.

U.S. electric vehicle sales peaked in September, before federal stimulus expired, at 10.3% of the new-vehicle market, according to Cox Automotive. This demand fell to initial estimates of 5.2% during the fourth quarter.

GM Chief Financial Officer Paul Jacobson said Wednesday that the Detroit automaker, which has become largely a regional player in North America, is not abandoning electric vehicles but is working to right-size natural demand rather than trying to appease regulators.

When asked about Chinese automakers’ expansion, Jacobson said GM “can keep our products” but it has to be on equal footing — restating that he believes U.S. tariffs should work to offset the subsidies Chinese companies get from the Chinese government.

“You can see the kind of power and competitiveness that these vehicles bring to the market. So, we have to be prepared,” he said during the Federal Reserve Bank of Chicago’s auto conference in Detroit.

GM was not prepared for the rise of its domestic auto industry in China, which was the company’s largest sales market from 2010 to 2023. The automaker’s profits in China fell from about $2 billion annually in 2018 to a second straight year of losses in 2025 as China grows its auto industry.

Ford, GM’s crosstown rival, is taking a different approach. It has largely scrapped plans for big electric vehicles in exchange for the next generation of smaller models that CEO Jim Farley believes will be the company’s saving grace against Chinese automakers.

Farley, who has been complimentary of Chinese automakers at times, said the new platform will be a simple, efficient and flexible ecosystem to deliver a family of affordable, software-defined electric vehicles.

“This is a Model T moment for the company,” Farley said last year. “We really see, not global [automakers] As a competitive group for the next generation of electric vehicles, we see the Chinese. Companies like Geely and BYD…that’s how we built our car.

Local EV startups e.g Rivian Cars And supported by Saudi Arabia Lucid Collection – They both produce cars exclusively in the United States – They face profitability and sales challenges.

Amid demand issues, electric vehicle startups have tried to attract investors by promoting themselves as technology players rather than automakers, following in the footsteps of US electric vehicle leader Tesla.

Musk, Tesla’s boss, has been wary of Chinese automakers for years, saying in 2023 after BYD’s rise that such companies would “tear down” global rivals without trade barriers.

Musk has historically positioned Tesla as a technology company that also sells cars even though the vast majority of its revenue comes from car sales, rentals and repairs. He took another step forward in the company’s latest quarterly earnings call, saying Tesla will end production of its Model S and

After the original Roadster, the two models are Tesla’s oldest cars. The electric car maker began selling the Model S sedan in 2012, and the Model X SUV three years later. They account for only about 3% of Tesla’s sales in 2025, with the company still offering the Model Y, Model 3, and Cybertruck.

In recent years, the company has reduced the prices of these vehicles as global competition for electric cars increases.

Musk believes that China will once again be the company’s main competitor in its latest humanoid robotics projects.

“China is definitely going to be a tough competitor because there’s no two ways about it,” Musk said on the company’s fourth-quarter earnings call. “So I always think people outside of China kind of underestimate China. China is the next level.”