Has General Motors' "localization" strategy paid off as the Chinese market has been profitable for five consecutive quarters?

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On January 27th, General Motors released its 2025 financial report. The annual revenue was $185.019 billion, a year-on-year decrease of 1.3%. The adjusted earnings before interest and taxes (EBIT) were $12.747 billion, a year-on-year decrease of 14.6%.

The decline in General Motors' performance in 2025 was mainly due to the restructuring of its electric vehicle business and US tariffs. In the third quarter of 2025, General Motors recorded an impairment of $1.6 billion for its electric vehicle business. In the fourth quarter, it recorded another impairment of $6 billion, including production line adjustments and settlements with suppliers.

In 2026, General Motors' net profit is expected to be between $10.3 billion and $11.7 billion. The adjusted EBIT is expected to be between $13 billion and $15 billion. The adjusted diluted earnings per share are expected to be between $11 and $13. The adjusted cash flow from the automotive business is expected to be between $9 billion and $11 billion.

General Motors said that in 2026, the company will face multiple unfavorable factors: additional tariff costs of $3 billion - $4 billion; negative impacts of about $1 billion - $1.5 billion due to commodity price fluctuations and exchange rate changes; costs of about $1 billion - $1.5 billion for localizing production capacity and other related expenses. General Motors also said that the unit loss of its electric vehicle business will narrow by $1 billion - $1.5 billion. At the same time, since it no longer needs to purchase emission allowances, it will recognize compliance revenues of $550 million - $750 million in 2026.

General Motors has gradually emerged from the trough in 2024. Can it achieve performance growth in 2026?

Recovery in the Chinese Market

In 2025, General Motors delivered 6.182 million vehicles globally, a year-on-year increase of 3.03%. In the North American market, it delivered 3.361 million vehicles, a year-on-year increase of 4.54%. Among them, in the US market, it delivered 2.853 million vehicles, a year-on-year increase of 5.47%. In the Asia - Pacific, Middle East, and Africa regions, it delivered 2.418 million vehicles, a year-on-year increase of 2.46%. Among them, in China, it delivered 1.88 million vehicles, a year-on-year increase of 2.23%.

It can be seen that General Motors' sales in China have begun to recover. General Motors said that it has achieved profitability for five consecutive quarters in the Chinese market. In 2025, it achieved year-on-year growth in both retail sales and market share. The sales volume of new energy vehicles was nearly 1 million, accounting for more than half of the total sales volume. Both the sales volume and penetration rate reached record highs.

General Motors' performance in the Chinese market is mainly supported by SAIC - GM and SAIC - GM - Wuling. In 2025, SAIC - GM sold 535,000 vehicles, a year-on-year increase of 22.99%. SAIC - GM - Wuling sold 1.6151 million vehicles, a year-on-year increase of 20.52%.

The recovery of General Motors in China is due to its promotion of localization. In June 2024, Dan Ammann, a veteran of General Motors, was appointed as the President of General Motors China. Two months later, SAIC - GM made personnel changes. Lu Xiao became the General Manager of SAIC - GM; Xue Haitao became the Deputy General Manager in charge of marketing; Wang Conghe took over as the Executive Deputy General Manager of Pan Asia Technical Automotive Center. At the same time, General Motors gave the Chinese team more decision - making power.

In 2025, the Buick brand adopted a new pricing model for new energy vehicles and was the first in the joint - venture camp to fully implement the "fixed - price" strategy, that is, a unified national price. In April 2025, the Buick brand launched its high - end new energy brand, Buick Electra, and released the new Buick "Xiaoyao" super - integrated architecture, which can support three full - body forms (MPV, SUV, and sedan) and three new energy technologies (pure - electric, plug - in hybrid, and extended - range).

In August of the same year, Buick launched the new GL8 Avenir plug - in hybrid model. According to media reports, after General Motors delegated power to the Chinese team, the new GL8 Avenir plug - in hybrid model was upgraded in 16 months. Previously, General Motors' iteration cycle was basically 36 months.

In the following month, the mid - to large - sized sedan, Buick Electra E5, was officially launched. A total of 5 models were launched, with a price range of 173,900 - 219,900 yuan. This model is based on the Xiaoyao architecture and is powered by a 1.5T extended - range system. It has a pure - electric range of 302 km under CLTC conditions and a comprehensive range of over 1,400 km. In terms of intelligence, it is equipped with the Momenta R6 Flywheel large model based on reinforcement learning and has functions such as multi - scenario intelligent assisted driving. According to data from Chezhizhijia, from November to December 2025, the cumulative sales volume of the Buick Electra E5 was 6,215 units.

In December 2025, the Buick GL8 Century, the flagship MPV of Buick, was launched, with a starting price of 439,900 yuan. Data shows that in 2025, the annual terminal sales volume of Buick's MPV family exceeded 122,000 units, a year-on-year increase of 17%. Among them, the sales volume of new energy models accounted for more than 50%, a year-on-year increase of 152%.

The Huajing S experience car jointly developed by SAIC - GM - Wuling and Huawei officially rolled off the production line in January 2026. It is reported that in September 2025, Wuling and Huawei signed a "Three - Intelligence" deep - cooperation agreement covering intelligent manufacturing, intelligent driving, and intelligent cockpits. In December of the same year, the Huajing S was officially announced to join the Huawei ecosystem on the Huawei Qiankun App.

Efforts to Reduce Electric Vehicle Costs

General Motors is also planning to improve battery technology to reduce the overall vehicle cost.

In May 2025, General Motors announced that it had jointly developed a new type of electric vehicle battery cell, the lithium - manganese - rich (LMR) battery, with LG Energy Solution. It plans to apply this technology to pickups and full - size SUVs as early as 2028. It is reported that this technology will enable electric pickups to have a range of over 400 miles (about 644 km) while significantly reducing costs.

Two months later, Ultium Cells, a joint venture between General Motors and LG Energy Solution, announced that it would upgrade the Spring Hill plant in Tennessee to produce low - cost electric vehicle batteries. General Motors said that the cost of this lithium - iron - phosphate battery could be significantly lower than that of existing electric vehicle battery packs, partly because it does not require expensive minerals such as cobalt and nickel used in standard lithium - ion batteries.

In August 2025, media reports said that General Motors would purchase lithium - iron - phosphate batteries from CATL for the production of its second - generation Chevrolet Bolt electric vehicles until its lithium - iron - phosphate battery plant jointly built with LG Energy Solution starts production in 2027.

Recently, media reports also said that General Motors is promoting cost - reduction in electric vehicles, and the measures are not limited to using cheaper lithium - ion batteries. General Motors expects to launch a second - generation software - defined vehicle architecture in 2028, covering both fuel - powered and pure - electric models. It is reported that this architecture will integrate all key systems such as power, infotainment, and safety into a high - speed computing core.

However, in the new energy field, General Motors' performance in China still depends on its joint ventures. In February 2025, at the 2025 SAIC - GM Dealer Partner Summit, SAIC - GM said that it would launch more than 10 new energy products from 2025 to 2026, covering three major technology paths: pure - electric, plug - in hybrid, and extended - range. In 2027, SAIC - GM's new energy penetration rate will exceed 60%, making it one of the mainstream players in the new energy market.

At the same time, since 2025, SAIC - GM will continue to carry out intelligent transformation of fuel - powered vehicles, aiming to create the "smartest fuel - powered vehicles" and provide high - level intelligent driving, AI cockpits, and connected - vehicle upgrades. In 2027, the company will still retain 8 fuel - powered models, focusing on the mainstream and high - value niche markets to meet the needs of fuel - powered vehicle users.

General Motors is enhancing its competitiveness in the Chinese market by deepening its localization strategy, accelerating product iteration, and technological innovation. The continuous profitability in the Chinese market and the rapid growth of new energy vehicle sales also reflect the correctness of its decisions. However, to further stabilize sales, it still needs to continue to work hard on cost control and intelligent transformation.

This article is from the WeChat public account "Visibility in the Auto Circle". Author: Wei He. Republished by 36Kr with permission.