The writer, a Los Angeles freelancer and former Detroit News business reporter, writes a blog, Starkman Approved. This column first appeared in his blog.
By Eric Starkman
Ford's Jim Farley and GM's Mary Barra
My cousin Rob makes for a compelling case study as to why China has eaten Detroit’s lunch on electric vehicles — and who is ultimately responsible for the decline of America’s once globally respected automotive industry.
At the urging of a friend, Cousin Rob test-drove a Tesla Model Y in 2020 and bought one on the spot. Cousin Rob loves technology. He’s an early adopter who gravitates toward products he considers genuinely cutting edge. He put the Model Y squarely in that category.
A few years later, Rob upgraded to a Model S, and he couldn’t be happier. He regularly raves about Tesla’s software updates, incremental improvements, and services that legacy automakers still don’t seem to grasp, much less deliver. These are features the auto media either underplays, ignores, or, more alarmingly, seems not to understand at all.
What’s notable is that Cousin Rob didn’t suddenly declare himself an environmentalist or buy a Tesla to save the planet. He bought it because he viewed the car as technologically superior to internal combustion vehicles and among the safest on the road. His decision was based on technology, not politics.
That distinction matters.
Cardinal Rule
GM and Ford violated a cardinal rule that major U.S. corporations long understood: never get in bed with politicians or allow your products to become political statements. Joe Biden chose to make electric vehicles a political issue, repeatedly warning that climate change had reached “code red” and that the nation and the world were in peril. His administration never treated EVs as a consumer option, but as a mandate Americans were expected to accept without question.
GM’s Mary Barra and Ford’s Jim Farley eagerly climbed aboard that train. Both CEOs positioned themselves as leaders of environmentally virtuous companies, even as GM and Ford continued generating nearly all their profits from gas-powered trucks and SUVs. Barra went so far as to proclaim that GM would be selling more EVs than Tesla by 2025 and that by 2035 the company would manufacture only electric vehicles. There was no visible market research to justify such declarations.
What followed was a familiar pattern. GM and Ford expected U.S. taxpayers to subsidize their transitions while increasingly moving engineering and manufacturing operations offshore. Biden’s Inflation Reduction Act showered EVs with incentives, many of which applied to vehicles most Americans could not afford, including models assembled in Mexico.
The federal and state governments also subsidized the construction and retooling of EV plants, while GM and Ford also counted on Washington to build a national charging infrastructure to support their products. When that failed to materialize, GM and Ford piggybacked on Tesla’s proprietary charging network, seemingly untroubled that their customers were now relying on a competitor to support their EVs.
Massive Marketing Budget Cut
Normally, when companies introduce genuinely new technologies, they increase marketing spending to explain and promote them. Yet in 2022, despite committing GM to a radical break from a century of internal combustion engineering, Barra cut the company’s marketing budget by $1 billion.
Norm de Greve, whom Barra recruited from CVS to serve as GM’s chief marketing officer, later told The Drum that he learned about the cut a week before joining the company while listening to an investor call. That suggests either that de Greve failed to confirm Barra’s commitment to marketing before accepting the job or that Barra pulled the rug out from under him after the fact.
Either way, de Greve’s October interview with The Drum is revealing. He speaks at length about GM rediscovering the “soul” of its brand and touts the company’s proprietary AI platform, Metropolis, which he credits with helping increase market share. Notably absent from the discussion is any meaningful reference to EV adoption, despite electric vehicles supposedly representing GM’s future.
For all of GM’s ballyhooed proprietary AI, it apparently lacked the intelligence to warn management that the company’s EV strategy was failing and headed for a $1.6 billion write-down — the same year Barra vowed she would be selling more Teslas than Elon Musk.
Musk’s Squandered Marketing Advantages
Musk, for his part, squandered advantages that could have buried GM and Ford and positioned their gas-engine fleets as the automotive equivalent of dial-up internet access. He is a brilliant technologist, but he does not value marketing and never properly branded Tesla as a cutting-edge Silicon Valley pioneer and distinguishing it from GM and Ford, whose profits are overwhelmingly driven by century old technology.
Steve Jobs understood the value of marketing. In 2009, when apps were still in their infancy and most Americans were unfamiliar with their capabilities, Apple ran compelling commercials explaining what apps did and how they could be downloaded to the iPhone, which had been introduced only two years earlier. Apps would have caught on eventually, but Apple’s 2008 App Store launch gave the company a decisive competitive edge.
Not only was Musk remiss in failing to brand Tesla as a pioneering technology company, he also tarnished the company’s brand by promoting his conservative politics and getting into bed with Donald Trump, alienating much of his core customer base.
Even today, Tesla does a poor job marketing its superior technological capabilities.
Thanksgiving Night Rescue
On Thanksgiving night, Cousin Rob was driving on a highway through the San Gabriel Valley, about 22 miles east of downtown Los Angeles, when he incurred a flat tire. Fortunately, just weeks earlier he had signed up for Tesla’s $25-per-month wheel and tire protection service, which covers tire replacement at no additional cost.
Despite it being a holiday weekend, Rob used his Tesla app to contact the company, and within 20 minutes a flatbed arrived to take him and his vehicle to the nearest Tesla service center. At approximately 9 a.m. the following morning, he received a notification that his tire had been replaced, and the car was ready for pickup.
In another example of Tesla’s more advanced technological capabilities, GM has confirmed plans to introduce iPhone digital key functionality using Apple Wallet, notably without offering a timeline. Cousin Rob has been using his iPhone as his Tesla key since he bought his first Tesla nearly six years ago. Tesla also mastered Apple watch connectivity months before GM, which stumbled on the integration.
That GM is now using Apple Wallet for key access is yet another example of how far one of America’s premier marketing companies has fallen. GM has made the unpopular decision to drop Apple CarPlay from its vehicles, yet it actively promotes Apple Wallet and has announced plans to add Apple Music to its in-car infotainment system. GM cannot seem to decide whether it wants its vehicles to support Apple products or not.
China’s EV Superiority
The contrast becomes even clearer when looking at China. What most Americans do not appreciate is why and how China achieved its EV superiority.
In the 1990s, China’s government concluded that it could never develop domestic brands capable of competing head-to-head with Volkswagen, BMW, or even General Motors, all of which had established strong market positions inside the country.
Beijing identified an opening where incumbents were vulnerable: electric vehicles. This strategy had little to do with climate change. China continues to expand coal-fired power generation to support its grid.
Instead, EVs were viewed as a way to leapfrog legacy automakers technologically and assert global industrial dominance. The government focused on execution, scale, and technical competence, drawing on experienced automotive leadership to drive its EV ambitions.
By contrast, decades later, after China had already established a commanding position in EVs, the U.S. approach framed electric vehicles primarily as a political and regulatory project rather than a consumer technology opportunity. The emphasis shifted toward symbolism and mandates, not product superiority or market appeal.
A Country of Cousin Robs
Chinese consumers are a massive collection of Cousin Robs and embraced EVs not because of climate messaging but because the vehicles were positioned as rolling technology platforms and tech-luxury lifestyle statements — aspirational, software-driven, and status-enhancing.
In China today, Tesla is no longer the uncontested leader in EV innovation. Domestic competitors have closed the gap and, in some cases, surpassed Tesla by treating electric vehicles as consumer technology products.
The U.S. media delights in pointing out that China currently has a glut of EVs, the result of its government spawning too many upstarts, which Barra herself says now number more than 100 competitors. That’s true. But China plays a long game, unlike Barra, who manages GM to meet the quarterly demands of Wall Street.
The undeniable truth is that the Biden administration chose to bet America’s EV future on GM and Ford, and Barra and Farley have unequivocally demonstrated they were not up to the challenge.
The Wisdom of Wall Street?
Still, both executives have their diehard defenders, particularly Barra, whose loyalists argue she is doing an outstanding job, pointing to GM’s fourth-quarter rally and a stock price trading near its 52-week high.
What those defenders rarely mention is what fueled that rally. Barra reassured Wall Street that GM was once again focused on selling high-margin gas-powered trucks and SUVs, while continuing to describe EVs as the company’s “North Star.”
“We believe Barra & Co. are prepared for all options on the table as it balances its ICE and EV strategies,” Wedbush Securities analyst Dan Ives wrote in a research note.
This is the same Ives who more than four years ago declared that “the vertical integration capabilities of GM and conversion of its massive customer base to electric vehicles over the coming years represents a transformational opportunity” and issued a “buy” rating on GM’s stock that still trades below his projected target from four years ago.
For those who regard a company’s stock price as investor wisdom one can take to the bank, it is worth recalling that GM’s shares traded between roughly $30 and $40 in mid-2007, remained in the mid-20s through much of 2008, and a year later the company was bankrupt.
Investors did not anticipate that collapse until it was unavoidable, after GM had already depleted cash through buybacks and financial engineering — many of the same tools that have helped propel GM’s stock to its current level.
