Key Highlights

  • The Big Three's combined US market share has fallen from over 90 percent in 1965 to around 40 percent today.
  • Ford, GM and Stellantis have collectively written down tens of billions of dollars from scaled back EV plans.
  • Chinese automakers have already captured roughly 15 percent of Mexico's vehicle import market.
  • Stellantis plans to direct 60 percent of a 42 billion dollar four year investment toward North America.

Favourable Policy Masks Deeper Competitive Decline

America's largest automakers have benefited from tariff structures and relaxed emissions requirements that favour the large trucks and SUVs central to their profitability, allowing General Motors, Ford and Stellantis to scale back electric vehicle investment plans that had previously proven costly. Ford wrote down nearly 20 billion dollars last year tied largely to reduced EV ambitions, while Stellantis and GM recorded write-downs of 26 billion dollars and 8 billion dollars respectively.

This protective posture arrives against a backdrop of long term market share erosion. General Motors ranked as the world's largest automaker in 2004 with 8.4 million vehicles sold; by last year it had fallen to fourth position with 6.2 million. Ford's global ranking has slid from third to seventh over the same period.

Tariff Barriers Provide Runway but Not a Permanent Solution

Current tariff structures, including 100 percent duties on Chinese electric vehicles implemented in 2024, have effectively excluded competitors that have rapidly captured meaningful market share in Europe. Industry analysts describe these barriers as providing valuable time and financial runway for American manufacturers to develop competitive electric vehicle technology, even as near term profitability remains concentrated in traditional petrol models.

Stellantis has outlined plans to direct 60 percent of a 42 billion dollar four year investment program toward North America, where returns are expected to be strongest, following a similar strategic emphasis from GM and Ford on their core domestic market amid a shrinking and increasingly competitive global footprint.

Chinese Manufacturers Already Establishing Regional Footholds

Despite trade barriers directly protecting the US market, Chinese automakers are establishing positions in neighbouring markets that could eventually provide indirect access. Chinese vehicle imports have already captured roughly 15 percent of Mexico's auto market, with major manufacturers reportedly exploring local production facilities. Geely, which owns Volvo, operates a South Carolina factory that could theoretically produce vehicles under its Chinese brands.

Industry analysts widely characterise Chinese market entry into North America as a matter of timing rather than possibility, given the substantial technological lead Chinese manufacturers have established in electric vehicle development. Trade policy uncertainty adds a further complication, with President Trump previously suggesting Chinese manufacturers building US factories would be welcome, a position at odds with domestic industry executives who have warned such entry would prove highly disruptive.

Conclusion

Detroit's major automakers face a strategic tension between near term profitability, currently well served by protectionist policy and a focus on traditional petrol vehicles, and longer term competitive positioning against Chinese manufacturers whose electric vehicle capabilities continue to advance. Whether current tariff protection provides sufficient time for meaningful catch up, or merely delays an inevitable competitive reckoning, remains a central uncertainty facing the industry through the remainder of the decade.

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Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice.