GM Criticized Zeekr for Advancing Too Fast – Anticipating GM’s Collapse

GM is downplaying the competitive threat from Chinese companies which are currently outperforming them. The tariffs that are protecting GM will eventually be bypassed or eliminated. GM has to prepare better to avoid other problems.

There is a video from the Electric Viking that is circulating on YouTube which highlights the Zeekr 007 which sells for $29,400 has two NVIDIA ORIN chips (TOPS is becoming more powerful than HP in electric cars) and the company basically said the car is better, and smarter than anything Detroit has ever produced. All very true though this isn’t just due to Zeekr but the Chinese Government’s massive help to raise up its automotive business, and whether we are talking the US or Europe, that government is doing more to advance their country’s automotive capabilities than most every other country.

Currently, the only thing protecting the US auto market are the heavy Tariffs but even with 100% Tariffs, Chinese cars are drifting towards competitive pricing which means, if those Tariffs ever went away the automakers now benefitting from those Tariffs would fail. And these car makers are spinning up manufacturing in countries like Mexico which can avoid those Tariffs and can benefit from China’s advantages in terms of parts costs and enjoy labor costs similar to China’s.

GM allegedly responded that they think Zeekr is advancing too fast.

Anticipating The End Of The US Automotive Industry

We were here before in the 1970s, Japan got its car industry together (ironically with a ton of help from US car companies) and suddenly the car companies in the US couldn’t react. Cars like the Pinto and Vega tried to compete but they were relatively poorly built, had serious reliability issues, and the Pinto in particular had a reputation for exploding when hit from behind (I still think this was overblown given most pickups had the same issue – the link is from the movie comedy Top Secret which came out around that time). 

This is often how countries lose their industry leadership, for instance, with cell phones Finish company Nokia didn’t think Smartphones were a thing, and then thought Apple was a joke. They lost their dominance and nearly went under and aren’t even a well-known brand today as a result.

AT&T dominated telecommunications until the US market opened up to competition and then they failed over into the Baby Bells, it was eventually resurrected as a very different company, but this lesson is learned the hard way over and over again. You have to step up to competition or that competition will roll right over you.

The Coming Electric Car Tidal Wave

With any new technology, there is an initial over-excitement, then a pullback as the technology catches up to expectations, and then it goes vertical. With AI we are still in that early phase but with electric cars we are quickly going through the valley of disappointment as the infrastructure for charging begins to come online at scale and cars are arriving with significantly greater range, reliability, and battery life.

Granted Musk’s behavior has done significant damage to this effort and Tesla but we are seeing used electric cars to start to outsell gas cars at prices that new Chinese cars enjoy today. That’s a serious problem because if you get good new cars selling at the same price as cars one or two years old you are done as a car company.

These Chinese cars are well built and rich with features, they have had some quality issues but these are in line with what Tesla is experiencing which was and continues to be survivable and they are better, relatively,  than the early Japanese cars particularly the ones made in the 50s and 60s.

China’s effort is ramping up nicely and will coincide with what I believe will be a second electric car wave starting in 2025/6, but many western car companies are now pulling back and Jaguar, the one European car maker that decided to go all-electric and stay on the path, is having a really bad time pivoting to electric and may not survive as a result. 

Wrapping Up:

When you go to the market you have to be prepared to compete at the same level as your competitors and right now Chinese car companies like Zeekr are so greatly outperforming US domestic car companies that they are starting to overcome massive protective tariffs, should those tariffs be bypassed (Mexican manufacturing) or be eliminated as part of a future trade deal, I doubt companies like GM and Ford will survive and I don’t think the European companies will do much better. 

Technology pivots often wipe out much of the pre-existing companies, I expect we are seeing that play out once again.

Rob Enderle is a technology analyst covering automotive technology and battery developments at Torque News. You can learn more about Rob on Wikipedia, and follow his articles on Forbes, on X, and LinkedIn.