China’s largest carmaker to cut thousands of jobs at its joint ventures with GM and Volkswagen
Amid an intense price war and lost market share to BYD and Tesla, China’s state-owned automaker SAIC Motor is reportedly making drastic job cuts this year at its joint ventures with General Motors and Volkswagen and at its EV unit – with mass layoffs a rare move for a China-owned company.
The total number accounts for 30% of employees at SAIC-GM, 10% at SAIC Volkswagen, and more than 50% at its Rising Auto EV subsidiary, two unnamed sources told Reuters.
Mass layoffs by Chinese-owned firms are extremely rare, but the fierce price spearheaded by BYD has potentially forced its hand. In recent year, legacy carmaker SAIC and foreign partners have lost market share to Tesla and privately owned companies such as BYD. In China, there are more than 94 brands offering more than 300 EV models, according to Counterpoint Research, so there is no shortage of competition.
For nearly two decades, SAIC, which employs more than 200,000 people, has been a powerhouse in China, but its sales fell by 16% in the first two months of this year from a year earlier, according to an SAIC filing.
According to the report, the layoffs won’t all happen at once but are aimed for this year. Sources told Reuters that the bulk of the firings will happen via “implementing stricter performance standards and offering payouts to lower-rated employees who resign.”
SAIC refutes the claim, however, telling Reuters that the company doesn’t plan to downsize, and a spokesperson had no comment regarding efforts by the company to force low performers to resign or other strategies to reduce staff. In fact, SAIC said that it had recruited 2,000 employees earlier this year.
A VW spokesperson, however, declined to comment on the layoffs but added that employee performance reviews were a “long-term mechanism” to ensure “every employee can be qualified for their job requirements.”
According to the report, SAIC has a pressure-cooker-style rating system for employees from A to D, with employees rated D offered payouts to quit, while C-rated employees are put into “uncomfortable positions” forcing them to quit, the sources said. Last year, about 10% of SAIC-VW employees, for example, received a C or D rating. Also, these ratings apply to “white-collar professionals,” not factory workers, the source said. At this point, it’s unclear whether or not factory workers are included in the planned layoffs.
For its part, SAIC Volkswagen makes the ID.3 EV and Audi-branded vehicles, among other models. SAIC-GM makes Chevrolets, Buicks, and Cadillacs.
In China, EV sales account for 23% of total car sales, with that number on the rise. Of course, China granted Tesla a special exception from its longstanding requirement of making foreign automakers form joint ventures with Chinese-owned firms. Tesla set up its wholly own entity in China in 2018 in Shanghai, where it produces its biggest global output.
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EV sales kept up their momentum in December 2024, with incentives playing a big role, according to the latest Cox Automotive’s Kelley Blue Book report.
December’s strong EV sales saw an average transaction price (ATP) of $55,544, which helped push the industry-wide ATP higher, according to Kelley Blue Book. The December ATP for an EV was higher year-over-year by 0.8%, slightly below the industry average, and higher month-over-month by 1.1%. Tesla ATPs were higher year-over-year by 10.5%.
Incentives for EVs remained elevated in December, although they were slightly lower month-over-month at 14.3% of ATP, down from 14.7% in November.
EV incentives were higher by an impressive 41% year-over-year and have been above 12% of ATP for six consecutive months. Strong sales incentives, which averaged more than $6,700 per sale in 2024, were one reason EV sales surpassed 1.3 million units last year, according to Cox Automotive, a new record for volume and share.
(My colleague Jameson Dow reported yesterday, “In 2024, the world sold 3.5 million more EVs than it did in the previous year … This increase is larger than the 3.2 million increase in EV sales from the previous year – meaning that EV sales aren’t just up, but that the rate of growth is itself increasing.”)
Kelley Blue Book estimated that in December, approximately 84,000 vehicles – or 5.6% of total sales – transacted at prices higher than $80,000 – the highest volume ever. KBB lumps gas cars and EVs together into this luxury vehicle category, so this is where Tesla Cybertruck is slotted.
However, Tesla bundles sales figures of Cybertruck with Model S, Model X, and Tesla Semi(!) into a category it calls “other models,” so we don’t know for sure exactly how many Cybertrucks Tesla sold in Q4, much less in December. However, Electrek‘s Fred Lambert estimates between 9,000 and 12,000 Cybertrucks were sold in Q4, and that’s not a stellar sales figure.
What will January bring when it comes to EV ATPs? What about tax credits? Check back in a month and I’ll fill you in.
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Tesla is now claiming that Cybertruck was the ‘best-selling electric pickup in US’ last year despite not even reporting the number of deliveries.
There’s a lot of context needed here.
As we often highlighted, Tesla is sadly one of, if not the most, opaque automakers regarding sales reports.
Tesla doesn’t break down sales per model or even region.
For comparison, here’s Ford’s Q4 2024 sales report compared to Tesla’s:
You could argue that Tesla has fewer models than Ford, and that’s true, but Tesla’s report literally has two lines despite having six different models.
There’s no reason not to offer a complete breakdown like all other automakers other than trying to make it hard to verify the health of each vehicle program.
This has been the case with the Cybertruck. Tesla is bundling its Cybertruck deliveries with Model S, Model X, and Tesla Semi deliveries.
Despite this lack of disclosure, Tesla has been able to claim that the Cybertruck has become “the best-selling electric pickup truck” in the US in 2024:
It very well might be true. Ford disclosed 33,510 F-150 Lightning truck deliveries in the US in 2024 while most estimates are putting Cybertruck deliveries at around 40,000 units.
Those are global deliveries, but Tesla only delivered the Cybertruck in the US, Canada, and Mexico in 2024, and most of the deliveries are believed to be in the US.
However, there’s essential context needed here, as we highlighted in our recent ‘Tesla Cybertruck sales are disastrous‘ article.
First off, Tesla had a backlog of over 1 million reservations for the Cybertruck that it has been building since 2019. This led many to believe Tesla already had years of demand baked in for the truck and that production would be the constraint.
However, based on estimates, again, because Tesla refuses to disclose the data, Cybertruck deliveries were either flat or down in Q4 versus Q3 despite Tesla introducing cheaper versions of the vehicle and ramping up production.
Again, that’s after just about 40,000 deliveries.
Furthermore, with almost 11,000 deliveries in Q4 in the US, Ford more likely than not outsold Cybertruck with the F-150 Lightning in Q4.
Electrek’s Take
Tesla is in damage control here. There’s no doubt that it is having issues selling the Cybertruck.
Inventory is full of Cybertrucks and Tesla is now discounting them and offering free lifetime Supercharging.
Tesla is great at ramping up production, and it’s clear the Cybertruck is not production-constrained anymore. It is demand-constrained despite having over 1 million reservations.
Again, those reservations were made before Tesla unveiled the production version, which happened to have less range and cost significantly more.
The upcoming cheaper single motor version should help with demand, but I have serious doubts Tesla can ramp this program up to more than 100,000 units in the US.
As a reminder, Tesla installed a production capacity of 250,000 units annually and Musk said he could see Tesla selling 500,000 Cybertrucks per year.
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