The local automakers are reassessing their strategies and cutting budgets to stay competitive.
The big picture: The entire industry is worried about the magnitude of what Stellantis CEO Carlos Tavares calls "the China offensive."
Companies that can't match China's low-cost electric vehicles (EVs) "are going to be in an existential problem," Tavares told Bloomberg.
Even the indomitable Tesla CEO Elon Musk is concerned.
Catch up fast: China is the world's largest and fastest-growing automobile market.
Chinese cars have long been poorly made. But thanks largely to government support — plus access to cheaper batteries and labor — the country now makes attractive, affordable models, like the sub-$11,000 Seagull EV from BYD, the world's top seller of EVs and plug-in hybrids.
What we're watching: Chinese cars are already being exported to Mexico, and Chinese carmakers are scouting plants there, the Financial Times reported — meaning Mexico could become a back door for selling these cars in the United States.
The bottom line: Detroit has seen this movie before with Japanese and Korean rivals, which filled a need for affordable, efficient cars that consumers eventually embraced.
