China has been an important market for General Motors (GM), second only to its U.S. operations. The company operates in the country through two major joint ventures — SAIC-GM (which sells Chevrolet, Buick, and Cadillac) and SAIC-GM-Wuling (which focuses on new energy vehicles).

In Q1 2025, GM delivered 442,000 vehicles in China, nearly flat year over year but down 26.3% sequentially. However, its new energy vehicle (NEV) sales jumped 53.2% year over year. To stay competitive, GM plans to expand its NEV lineup, ensuring all new local models have at least one NEV option by 2025.

The Buick GL8 led the premium MPV segment with 24,000 units sold, while the Wuling Hong Guang MINIEV retained its popularity. LaCrosse and Envision Plus models saw strong gains. Additionally, Chevrolet Tahoe deliveries began under GM’s Durant Guild platform in March.

General Motors, however, is facing challenges in China, from evolving regulations and lower-priced offerings from local automakers. In response, it launched a major restructuring of China operations last year. Efforts included cutting costs, rightsizing operations and refreshing its product lineup. These efforts have started to pay off, with positive equity income reported in the last quarter of 2024, excluding $5 billion in restructuring costs. GM aims to restore profitability in China this year.

Competition Intensifies in the World’s Largest Car Market

Tesla TSLA is also facing mounting pressure in China. While Tesla doesn’t break down regional deliveries, data from the China Passenger Car Association shows its China-made EV sales fell 11.5%, 49% and 11.5% year over year in January, February and March, respectively.

Meanwhile, China’s BYD Co Ltd BYDDY is rapidly gaining ground. In the first quarter of 2025, BYD delivered 416,388 battery electric vehicles (BEVs), surpassing Tesla’s 336,681 units. This marks the second straight quarter that BYD has led the global EV market. With aggressive expansion and cutting-edge technology, BYD is taking over Tesla’s EV crown.

General Motors must work hard to expand its market share in China as local players are increasingly dominating the industry.

The Zacks Rundown for General Motors

Shares of General Motors have lost around 14% year to date compared with the industry’s decline of 24%.

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From a valuation standpoint, GM trades at a forward price-to-earnings ratio of just 3.96, significantly below the industry. It carries a Value Score of A.

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The Zacks Consensus Estimate for GM’s Q1 EPS has declined over the past 30 days, while the estimate for Q2 has risen. Full-year 2025 EPS estimates have increased but the 2026 forecast remains unchanged over the past 30 days.

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GM stock currently carries a Zacks Rank #3 (Hold).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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