EVs were the focus of the quarterly earnings call. CEO Mary Barra confirmed that the “majority of [GM’s] capital spend” is on EVs, and also that GM is battling the same challenges as the rest of the industry: “It’s true, the pace of EV demand has slowed down, which has created some uncertainty.” 

A tough EV market marked by slowing demand and potential for increased competition from Chinese automakers was one of Wall Street’s biggest worries about GM. The company has spent aggressively on developing EV and hybrid models, to the tune of an estimated $35 billion through 2025, and the earnings show that GM’s EV line has yet to turn a profit. However, Barra was optimistic about EV sales in 2024 on the earnings call.

Barra said GM is expecting EVs to account for 10% of all auto sales in 2024—up from 7% in 2023—marking another record year of sales, running against the mood around the industry. GM itself is projecting it will sell between 200,000 and 300,000 EVs in 2024.

She also addressed the proverbial elephant in the room: Tesla CEO Elon Musk and his comments about ultracheap Chinese EVs that are roiling the market. A set of vertically integrated Chinese automakers that control their entire supply chain—with Warren Buffett-backed BYD leading the race—are able to sell cars for far less than their American counterparts. BYD, for instance, recently debuted models starting at just $11,000 in the Chinese market. 

Musk recently said that Chinese EVs would “demolish” other companies without trade barriers, and Tesla is feeling the pain. As Tesla shifts from its $50,000-range models to something around $25,000, it essentially told the market that 2024 will be a wash, and it may see “notably lower” sales as it pivots to cheaper models. Its stock lost $80 billion in value the very next trading day.

Barra weighed in on this, but refused to be drawn on a specific policy. 

“To Elon’s comments, I don’t discount any competitor—we need to make sure we have beautifully designed vehicles…at the right cost base,” Barra said. “We do need a level playing field. Give us a level playing field, and I’ll put our products up against any,” she concluded, without elaborating. 

Chinese EVs are currently subject to a 25% import tariff, but the Biden administration has reportedly been weighing an increase to make sure American manufacturers can stay competitive. 

Wells Fargo analyst Colin Langan cited a potential price war as a key risk for GM’s EV profitability. (GM claims its EV line, which lost $1.7 billion last year, could be profitable by as soon as 2025.) Federal emissions regulations give automakers like GM relatively little wiggle room to cut back on EV development, even if they’re losing money.

“[EV] profitability is challenging particularly with new pricing pressure,” Langan wrote in a report issued just after the earnings release. “However, U.S. fuel economy regulations will likely force automakers to sell [EVs] to meet targets.”

Fortune previously reported that some EV manufacturers could shift more of their production toward plug-in hybrids that offer many of the same environmental benefits while addressing customer anxieties about range and charging availability. Barra confirmed that GM, which has committed to eliminating gas-powered cars from its lineup by 2035, is considering doing just that.

“Deploying plug-in [hybrid] technology to strategic segments will deliver some of the environmental benefits of EVs as the nation builds its charging networks,” said Barra. “We know the EV market is not going to grow linearly, and we are prepared to shift between ICE [internal combustion engine] and EV production.”

Morningstar analyst David Whiston told Fortune that he didn’t see the move as a step back for GM’s electric agenda.

“[I see that as] just a reaction to what actual demand is, and regulators’ goals,” said Whiston. “We need more EVs, and we need charging infrastructure…[but] the country isn’t quite ready for it yet.”

GM didn’t have an easy 2023. It was hit hard by UAW strikes last fall: CFO Paul Jacobson said that it cost the company $1.1 billion in total and about 95,000 cars. And its self-driving technology division, named Cruise, came under scrutiny after hitting a San Francisco pedestrian and dragging her 20 feet last October. The DOJ and SEC recently opened investigations into the incident. (GM has fired 900 people working on Cruise.) Cruise lost the company $2.7 billion in 2023.

GM made up some financial ground with cost cuts, many of them in the form of nonunion layoffs last month. Barra also said that lower commodities prices for the materials needed to produce EV batteries, especially lithium, will bring operating costs down even more in 2024. GM has invested heavily in producing its own batteries; it expects to start shipping from a new factory in Tennessee later this quarter.

“We feel very good about the trajectory that we’re on right now,” said Jacobson.