From ‘slippery slope’ to ‘existential threat,’ auto CEOs sound alarm on Chinese competition
Western automakers, from the Big Three to EV pure plays, are delivering the same stark warning: Chinese automakers pose a threat to their survival if domestic production isn’t protected.
“China poses a clear and present threat to the auto industry in the U.S.,” wrote the Alliance for Automotive Innovation (AAI), a trade group that reps the Big Three, among other automakers, ahead of a House hearing on Chinese vehicles last December.
The AAI said Congress needs to maintain the Commerce Department’s Biden-era prohibition on importing certain technology and software from China, which effectively bars the import of vehicles from Chinese manufacturers.
In recent comments, corporate executives have hammered home a version of this messaging
EV maker Rivian (RIVN) has a big year ahead with the launch of its entry-level R2. While short-term issues like cost control and EV demand are more top of mind for the company, the threat of China isn’t that far off.
Rivian CEO RJ Scaringe noted that in the long term, two important factors need to be recognized.
“It’s not like there’s magic happening on the Chinese cost structure. It’s really two things you can follow very clearly,” Scaringe told Yahoo Finance last week. “One is their capital cost structure is much lower than us. In most cases, it’s near zero. It’s a highly subsidized industry where plants and manufacturing compacts are paid for by the local equivalent of the federal government.”
The second factor is labor, with Chinese automakers’ costs a quarter to a fifth of those faced by US companies.
Scaringe said at the moment, tariffs in place “equalize” the cost of those vehicles, protecting US manufacturing. But only for now.
Rivian CEO RJ Scaringe speaks at the company’s first Autonomy and AI Day, showcasing developments in self-driving technology, in Palo Alto, Calif., on Dec. 11, 2025. (Reuters/Carlos Barria) ·REUTERS / Reuters
And despite this tariff buffer, Ford (F) CEO Jim Farley argued that China’s rising dominance remains a threat.
“We’re a year down the road with the Chinese competitors. They’re now even more prominent around the globe. Not a lot here in the US, but you go to Europe, you go to anywhere else, China is a big deal,” Farley told Yahoo Finance in January.
Chinese automakers captured approximately 6.1% of the European auto market last year, a 99% jump from 2024. And this despite tariffs of 35.3% on Chinese EVs entering the EU; however, plug-in hybrids and full hybrids were excluded.
Farley has in the past called Chinese-made cars an “existential threat” to US automarkets, not just because of the country’s tech advances, but also for its labor infrastructure that supports cheap manufacturing.
“They pose a lot of threat to labor locally, they have huge subsidies from the government that they’re exporting,” Farley said. “As a country, we need to decide what is a fair playing field.”
Ford CEO Jim Farley speaks at the Detroit Auto Show on Jan. 13, 2026. (Jim West/UCG/Universal Images Group via Getty Images) ·UCG via Getty Images
Farley, however, is hedging his bets, with Ford reportedly having held talks with China’s Xiaomi (XIACF) over an EV partnership, potentially opening the door to the US market, though both Ford and Xiaomi dispute the report. The Wall Street Journal reported that Ford and BYD (BYDDY) were also discussing a battery deal.
At General Motors (GM), CEO Mary Barra is coming to grips with the Canadian government’s trade deal with China to allow 49,000 Chinese-made EVs per year into the country.
“I can’t explain why the decision was made in Canada,” she said at a GM employee event. “It becomes a very slippery slope,” she added, alluding to the competitive threat posed by Chinese brands.
General Motors CEO Mary Barra speaks during a media event at the new GM Headquarters in Detroit on Jan. 12, 2026. (Reuters/Rebecca Cook) ·REUTERS / Reuters
GM, which has a China business unit of its own that includes joint ventures with Chinese automakers like SAIC, has firsthand knowledge of the cutthroat Chinese domestic market and is justifiably concerned about what Canada’s opening the door to Chinese EVs could mean to the auto landscape.
Beyond the US, China is poised to keep growing and increasing its grip on global markets.
The Center for Automotive Research, an industry think tank based in Michigan, warns that “saturation” in China’s domestic market is driving those automakers to expand aggressively into global markets like Canada and South American countries like Brazil.
Stellantis (STLA) — the most Euro-centric of the Big Three — sounded the alarm over what’s happening in the EU after the arrival of Chinese imports.
CEO Antonio Filosa and other European partners are proactively trying to guide future legislation to boost local production and sales in the face of cheaper Chinese competition.
Filosa and Porsche (P911.DE) CEO Oliver Blume argued in an op-ed earlier this month that the EU should use carbon dioxide bonuses or green incentives for vehicles made in Europe as a way to meet climate targets and also protect jobs.
“Europe is witnessing the emergence of new geopolitical rivalries,” Filosa and Blume wrote. “Trade, technology, and industrial capabilities are being mobilized more than ever to serve national interests. The European Union must choose its path quickly.”
Stellantis CEO Antonio Filosa listens as President Trump announces new fuel economy standards in the Oval Office at the White House in Washington, D.C., on Dec. 3, 2025. (Reuters/Brian Snyder) ·REUTERS / Reuters
Pras Subramanian is Lead Auto Reporter for Yahoo Finance. You can follow him on X and on Instagram.
