GM's Restructuring in China Shows Early Results
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Source: NASDAQ.COM
- EV Market Restructuring: GM's restructuring efforts in China's EV market are yielding early results, with nearly 1 million new energy vehicle (NEV) sales in 2025, accounting for over half of total sales, indicating a gradual recovery in a highly competitive landscape.
- Financial Adjustments Impact: Despite facing a $19.5 billion special charge, GM took a $1.1 billion asset write-down in Q4, primarily related to restructuring its Chinese joint venture, aimed at reducing production costs and optimizing its vehicle portfolio.
- Market Share Growth: In 2025, GM experienced growth in both retail sales and market share in China, with total sales up only 2.3%, but NEV sales surged by 22.6%, showcasing its potential in the high-end EV market.
- Future Strategic Direction: GM plans to include NEV options in all new product launches in 2026 and enhance local production to maintain price competitiveness, a strategy that will lay the groundwork for its long-term development in the Chinese market.
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Analyst Views on GM
Wall Street analysts forecast GM stock price to rise
18 Analyst Rating
16 Buy
1 Hold
1 Sell
Strong Buy
Current: 79.930
Low
48.00
Averages
82.06
High
100.00
Current: 79.930
Low
48.00
Averages
82.06
High
100.00
About GM
General Motors Company designs, builds and sells trucks, crossovers, cars and automobile parts and provides software-enabled services and subscriptions worldwide. The Company's segments include GMNA, GMI, Cruise and GM Financial. Its GM North America (GMNA) and GM International (GMI) develop, manufacture and/or markets vehicles under the Buick, Cadillac, Chevrolet and GMC brands. The Company provides automotive financing services through its General Motors Financial Company, Inc. (GM Financial) segment. Its Cruise segment is engaged in the development and commercialization of autonomous vehicle technology. Its software-enabled services and subscriptions, including OnStar, its advanced driver-assistance systems (ADAS), including Super Cruise driver assistance technology, and its end-to-end software platform. The Company is also focused on investing in electric vehicles (EVs) and AVs, software-enabled services and subscriptions and new business opportunities.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Declining EV Profitability: As of the end of last year, Tesla's net profit per vehicle was only $4,000, significantly down from $10,000 in 2022, indicating severe challenges to profitability amid the ongoing EV price wars.
- Intensifying Market Competition: Global EV sales reached 20.7 million units in 2023, a 21% increase, with Tesla losing market share to competitors like BYD and Volkswagen, undermining its position in a rapidly growing market.
- Investor Confidence Shaken: Despite Musk's continued optimism about the future, analysts have set a target price of only $422.09 for Tesla stock, reflecting concerns about the outlook for its EV business, leading investors to adopt a cautious stance regarding the company's diversification strategy.
See More
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- Profitability Volatility: Although Ford returned to profitability through restructuring in late 2020, its subsequent quarterly performance has been unstable, compounded by the cancellation of popular models like the Fiesta and Focus, increasing labor and energy costs.
- Three-Pronged Strategy: Ford's plan to tackle European challenges includes focusing on its higher-margin Ford Pro commercial vehicle division, refreshing its passenger vehicle lineup, and improving operational efficiencies, which are crucial for its business turnaround.
- Partnership Potential with Geely: Ford's potential collaboration with China's Geely, leveraging its excess production capacity to manufacture vehicles for Geely, could help avoid high tariffs and enhance Ford's competitiveness through shared technology, positioning it better in the EV market.
See More
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- Strategic Transformation Plan: Ford aims to tackle market challenges through a three-pronged strategy focusing on its high-margin Ford Pro commercial vehicle division, refreshing its passenger vehicle lineup, and improving operational efficiencies, which is intended to strengthen its foothold in the competitive European market.
- Potential Partnership Opportunity: The potential collaboration with China's Geely could provide a turning point for Ford's European operations, as utilizing excess production capacity to manufacture vehicles for Geely could not only reduce tariff costs but also offer advantages in technology sharing, particularly in autonomous driving.
- Intensifying Industry Competition: With the rapid rise of Chinese electric vehicle manufacturers, Ford faces pressure from these competitors and must learn new production and design techniques to maintain its market competitiveness, especially in innovation and cost control within the electric vehicle sector.
See More
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- EV Strategy Adjustment: Despite incurring a $1.1 billion restructuring charge, GM plans to lower production costs by focusing on high-end models and NEVs, particularly through its Buick and Cadillac brands, enhancing its competitive position.
- Future Product Planning: In 2026, all new GM products in China will include NEV options, with increased local production, which is crucial for maintaining price competitiveness and demonstrates the company's long-term commitment to the EV sector.
- Changing Market Environment: Although the Chinese market is unlikely to become a second profit pillar for Detroit automakers, its vast size and advanced NEV technology make it essential for GM to compete, preparing the company for challenges from Chinese automakers in the future.
See More
