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For the past year, the chief executives at some of the nation’s biggest car manufacturers have been voicing deep-seated fears that Chinese efficiency, especially in the EV market, could threaten their very existence. Amid all sorts of industry doomsday headlines, CEOs like Ford’s (NYSE:F) Jim Farley have continued to stress the significance of these worries. And it seems the latest numbers from the sector show just how valid they are.
Much like his peers at Honda (NYSE:HMC) and Toyota (NYSE:TM) — who uttered the now-famous line “We will not survive” after witnessing the level of automation in China’s car plants in the spring — Farley warns that unless makers like Ford are extremely strategic in the face of competition from Shenzhen darling BYD and its compatriots, they could “maybe not exist” in the near future.
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Looking at recent sales figures, one analyst not only agrees, but takes the concerns a step further, stating that there may no longer even be a chance to even the playing field, as “no amount of American ingenuity and innovation can close the gap” of China’s lead.
American giants like Ford and even Tesla are losing ground
In a new op-ed, Dale Hall, who leads global programs at the International Council on Clean Transportation, suggests that as swiftly as Farley and others may try to address sales slumps, they just won’t be able to catch up in the electric vehicle segment given the advantages that Chinese rivals hold.
Along with research to help inform public policy, the council regularly takes the pulse of the market, analyzing what and how various big brands are doing with EVs — and this year’s data shows “the acceleration of a troubling trend” for U.S. names in particular, Hall says.
“While worldwide EV sales continue to grow and competitors in Europe and Asia expand investment and production, American automakers are losing ground,” he wrote in Automotive News this month.
He uses Tesla, who many imagine as the world’s biggest and most influential name in fuel-free rides, as a perfect example. Though the Texas-based manufacturer managed to sell more than double the number of battery-operated cars as GM, Ford and Stellantis combined both last year (and also so far in 2026), it’s being progressively outperformed by Chinese firms; particularly BYD, which stole Tesla’s title of world EV leader in 2025.
“How did we get here?” Hall asks before pointing to the main elephant in the room: “shifting” regulations and ensuing uncertainty.
“After the pandemic, [U.S. makers] invested billions in EV projects, backed by good-faith assurances of tax credits, grants and loan guarantees from the federal government as part of the Inflation Reduction Act,” he says.
“Then, starting last year, the federal government abruptly phased out tax credits for new and used electric vehicles and charging infrastructure, and froze and terminated grants for EV and battery manufacturing.”
While these changes helped prompt businesses like Ford to backtrack on some eco-friendly projects, there is also the fact that sales were, unfortunately, not nearly robust enough to push forward with certain models. In Ford’s case, a $19.5-billion hit, for example, was easier to absorb than the loss that would come from vastly scaling its electric program amid, in its own words, “lower-than-expected demand, high costs and regulatory changes.”
“This is a risk domestically, where consumer interest in EVs remains resilient — and even more so abroad, where international markets are rapidly electrifying,” Hall believes.
He adds that ramping up investment, despite fears, and focusing on building cheaper models is a good start, as much of Chinese brands’ competitive edge is the fact that they price their vehicles as low as a few thousand dollars — a fraction of the cost of what’s available from their American counterparts, and cheaper than gas cars domestically.
But, “The Detroit 3 are still holding back,” he writes.
“As of last year, Ford, GM and Stellantis ranked among the world’s five least capital-invested automakers in EV research, development and production on a sales-adjusted basis. Each company is investing less than $400 toward EVs for every passenger vehicle they sell. That’s compared with Chinese companies such as BYD, SAIC, and Geely, which are investing between $1,700 and $2,750.”
What China has going for it that America does not
It would be remiss to overlook why BYD and others are able to offer such low-cost alternatives.
There is the obvious automation factor, which China excels at, given that it is essentially the world’s factory, with a well-oiled supply chain and advanced vertical integration. Farley himself has lauded the Chinese EV sphere’s engineering, “far superior” quality and technology, which includes in-vehicle AI assistants and seamless phone integration.
In China, these companies and their customers also receive substantial government subsidies in the form of tax breaks and rebates, while the ruling party has also historically (and heavily) invested directly into the sector through grants, purchases and infrastructure upgrades. China has more than 24 times more publicly-accessible EV chargers than the U.S.
The nation also has an upper hand in the battery segment, supplying an estimated 70% of the world’s car batteries and 80% of car battery cells, which Hall notes are the most expensive part of a new vehicle.
Then there is the unfortunate but unignorable underbelly of the trade in that part of the world: a reputation for work conditions that would be considered abhorrent in America, from low pay, long hours and poor safety regulations to forced labor.
This article originally appeared on Moneywise.com under the title: Ford, GM and Stellantis invest under $400 per vehicle in EVs — Chinese rivals spend up to $2,750, analyst warns
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.