The evolution of technology has always had its victors and victims.

Among the most prominent casualties is Nokia. In 2013, the Finnish telecom giant announced the acquisition of its phone operations by Microsoft.

In one of the most emotional moments in corporate history, then-CEO Ramachandra Bandekar ended his speech at a press conference by saying: “We didn’t do anything wrong, but somehow, we lost.”

From the vantage point of hindsight, it’s evident that Nokia did everything wrong by doing nothing to counter the rise of Apple.

In the years that followed, we have seen multiple parallels to the Nokia moment, where market incumbents are unseated by usurpers.

Today, a parallel scenario is unfolding in the automotive industry. Think of Tesla as the Apple of the smart electric vehicle era, and the existential threat confronting traditional combustion automakers like General Motors will become more acutely felt.

In my previous article on the crisis engulfing SAIC-GM, the US carmaker’s China division, I highlighted the failure of its management to update product line-ups to stimulate consumer demand.

Sluggish adoption

But GM’s problems extend beyond just sluggish product renewal. Its woes are rooted in the inability of multinationals to embrace change and adapt quickly to challenges from electrification.

Historically, established carmakers like GM follow the playbook and operate within existing frameworks. This approach makes it difficult for them to accelerate adoption of innovative technologies.

This is exemplified by supply chain rigidity. The traditional supply chains of “legacy” carmakers like Toyota, Volkswagen and GM are almost closed to new players due to a stringent emphasis on system compatibility and risks associated with introducing new suppliers into their production processes.

The adoption cycle for new technologies among “legacy” automakers is usually eight years, says Yu Xin, vice president of Appotronics, a Chinese company specializing in automotive-grade laser projection devices.

Multinationals typically spend two to three years on market validation for new technologies, followed by an additional one to two years in the trial phase before the innovations are ready for mass production and deployment, Yu said.

This means that by the time global automakers plan to apply the new technologies, their Chinese counterparts may have been profiting from faster adoption for years.

In a Chinese car market advancing at “lightning speed,” such sluggish adoption equates to slow suicide. Sadly, multinational firms’ organizational structures and research and development protocols are not built for this pace of transition.

Squandering the lead

For GM, whose strategy now seems to be “playing it safe,” this is particularly uncharacteristic. Ironically, GM was among the first automakers around the world to venture into electric vehicles with its Voltec plug-in hybrid platform. Chevrolet Volt, the first GM model that sat on the Voltec system, made its debut in 2011.

GM initially bet correctly on electrification but failed to follow through for various reasons. For me, the principal culprit is a lack of determination and vision.

GM’s initial high hopes for improving fuel economy and extending range through its Voltec system faded with the 2019 shutdown of its Hamtramck plant in Detroit, where the Volt was produced. The production halt marked a significant setback in its electric-vehicle journey. It took years for it to find the way back into the game.

In the meantime, BYD refined its DM-i hybrid technology, and Toyota’s models like the Prius and Camry sold like hot cakes, thanks to the continuously iterated Toyota Hybrid Systems they came with. Bit by bit, GM squandered its early lead in electrification.

While strategic missteps, execution failures and market shifts are all to blame for GM’s struggles, my perspective is that GM has long been in a “lying flat” mode and it needs a bit of external shock to be jolted out of comfort and complacency. In a market as dynamic as China’s, any advantage is precarious, easily eroded by competition.

Blurring the boundaries

A widely accepted consensus is that the boundaries between automakers, smartphone manufacturers and consumer electronics firms in China are increasingly blurred. Cars — again, think about iPhone — now resemble consumer electronics, with updates and facelifts every one to two years.

To outsiders, these fast-paced developments, often to the chagrin of an exhausted workforce, challenge long-held notions about carmaking as a slow process.

But to consumers, the endless rollout of something bigger, fancier and glossier is captivating. At the very least, consistent over-the-air upgrades are essential to maintaining customer loyalty and wooing new buyers.

Bombarded daily by a suite of new technologies, fickle customers will happily vote with their feet when the competitor next door has something you don’t.

GM may be behind in the race to win customers, but it is not yet prepared to throw in the towel. Its electrification ambitions are embodied in its Ultinum platform, a modular and scalable architecture akin to Toyota’s e-TNGA (Toyota New Global Architecture). The platform allows all GM vehicles to mix and match battery and motor modules with ease.

However, Ultinum’s late debut in 2021 undermined its potential. What’s worse, the Cadillac Lyriq, the platform’s first pure electric sport-utility vehicle, faced quality issues and collective consumer complaints in China. This damaged its reputation and overshadowed the prospects of Ultinum.

In July, buyers took delivery of only 18 of the Lyriq, down 96 percent from a year earlier. In August, sales fell 99 percent to four cars.

The Buick E5, an SUV also based on Ultinum, fared better thanks to aggressive pricing. It sold 3,039 units in November, up 56 percent year on year.

Charting a comeback

With all the odds stacked against it, can GM’s joint venture with Shanghai Automotive Industry Corp still pull off a comeback?

Despite its struggles, GM still possesses valuable assets. Leveraging these assets effectively could help the company regain consumer trust and engineer a turnaround.

The sales surge in November for its legacy combustion vehicles, such as the GL8 minivan and Envision Plus, a SUV, offers a silver lining. These gains have been attributed to substantial price cuts, which attracted price-sensitive customers and helped clear inventory, improving the bottom lines of dealers.

However, sustaining momentum requires more than discounts. New-energy vehicle sales in China for the first time overtook those of combustion cars in the third quarter of this year, representing 53 percent of the total. Despite their growing penetration, the Chinese market remains divided between combustion, hybrid and electric vehicles.

A significant percentage of consumers remain attached to combustion engines due to battery safety concerns and range anxiety. This sentiment is particularly strong in cold northern regions, where battery performance declines with falling temperatures. GM’s reputation for reliable fuel-based vehicles could cater to these consumers.

Media narratives often emphasize a full shift to electrification, but I believe the hybrid model is not merely a transitional technology. Instead, it is here to stay. GM’s focus should shift toward developing competitive hybrid models to rival players like BYD, Li Auto and Aito. GM is already taking a step in this direction.

Rebuilding consumer trust requires a renewed focus on innovation. GM should be given credit for its decision to offload its inefficient autonomous driving team. This is a long overdue step to avoid further drain on resources.

Industry sources tell me that outsourcing intelligent driving systems to external suppliers has become a popular practice. The benefits are myriad. Localization is key, with external teams often deployed to carmakers’ factories to enable fast response and on-site support.

‘In China, for China’ like you mean it

Another suggestion I have for GM is to strengthen its localization efforts. Although I am not a big fan of Chinese technology giant Huawei, a quote from its founder Ren Zhengfei should hit home to multinationals facing challenges in China. “Decisions should be made where gunfire can be heard,” he once said.

The Chinese automotive market has emerged as a battleground without smoke. Staying close to the front lines enables carmakers to better anticipate and respond to market trends.

Some joint-venture automakers have set examples.

Nissan’s China operation, for instance, built the architecture for the N7, its new electric vehicle, entirely in China. It also incorporates the advanced intelligent driving solutions of Momenta, a top-tier Chinese provider of intelligent driving technology.

Similarly, Audi’s new brand in China — the AUDI, without its iconic four-ring logo — also relies on solutions from Momenta. Other notable patrons include Toyota and SAIC.

Momenta, which counts Mercedes-Benz and GM among its financial backers, is one of the few domestic companies capable of mass-producing intelligent driving solutions. It’s conceivable that if they perform well, technologies from local suppliers like Momenta could not only be integrated into joint ventures’ supply chains but also applied globally.

This is why the slogan “In China, for China,” often echoed by multinational executives, must evolve into “In China, for the World.” Insights gained and innovations validated in China can be scaled globally to amplify their impact.

GM’s collaboration with SAIC provides a foundation for such efforts. By doubling down on this partnership, GM can access SAIC’s advancements in electrification and smart technologies. The latest statements from GM and SAIC reflect a shared commitment to empower their joint venture with top-tier resources in the face of market headwinds.

Preserving the legacy

GM’s journey in China has spanned 27 years. For many people my age, we grew up sitting in a Chevy, Buick or Cadillac. These cars are embedded with cherished memories of childhood, education and career milestones.

Preserving this legacy will require GM to embrace innovation, deepen localization and deliver products that resonate with a new generation of consumers.

The upcoming year 2025 heralds intensifying price wars and heightened competition among automakers. Whether GM can restructure itself to reclaim its vigor remains to be seen.

The author, a former Shanghai Daily opinion writer, now works as a business analyst and communication strategist. He has no conflict of interests to declare.