Ford and G.M. Face a Dilemma as China Excels in Electric Vehicles

A Ford Motor factory in Wayne, Mich. U.S. automakers are facing difficult choices.Credit...Emily Elconin for The New York Times

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By Jack Ewing

Jack Ewing has covered the auto industry for more than two decades.

Perhaps no business needs certainty more than the auto industry. It usually takes at least four years to design a new model and bring it to market, requiring carmakers to divine what buyers will find appealing by the time the vehicles reach showrooms.

Yet industry veterans say they can’t remember a time when the biggest carmakers faced as much uncertainty as they do now. They have been whipsawed by tariffs. Chinese carmakers are breathing down their necks around the world. Self-driving taxi companies like Waymo are changing the very nature of transportation. Software has replaced horsepower as a key selling point. Sales are flat almost everywhere, and profits are declining.

How U.S. carmakers cope with this pivotal moment will determine whether they survive as global players or slide into irrelevance, becoming niche manufacturers of pickups and sport utility vehicles that only Americans buy.

The early indications are not promising. Many established U.S. and European carmakers have been stumped by electric vehicles at seemingly every turn. First, Tesla’s meteoric rise caught them unawares. They responded by investing in new factories but are now pulling back after the U.S. government repealed tax credits and other subsidies for those cars.

“The term ‘unprecedented’ is always overused. But it is really everything coming together at once,” said Stuart Taylor, a former Ford Motor executive who is chief product officer at Envorso, which advises carmakers on software.

U.S. carmakers, in particular, face some difficult choices.

President Trump has given them a short-term gain by dismantling clean air regulations and fuel economy standards, making it easier to sell pickups and sport utility vehicles that are very profitable.

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