The EV maker’s shares sank over 15% on Monday, bringing its total 2025 losses to over 40%. Monday’s plunge erased about $127 billion from the carmaker’s market value. Tesla has now lost all its gains since November’s election of Donald Trump to the presidency.

China EV stocks, on the other hand, had a relatively good day, even after the bloodbath in U.S. markets. EV giant BYD notched a 1.3% rise in Hong Kong, bringing its year-to-date gains to just over 35%. Li Auto, a major producer of plug-in hybrids, rose 2.3%. Xpeng’s Hong Kong shares jumped an impressive 8.7%, one day after the chairman said the Tesla competitor will start mass production of its flying car by 2026. 

The broader Hang Seng Index pared back morning losses to end the day flat.

Elon Musk’s EV maker faces fierce competition in China, compared with its home market of the U.S. Cars from BYD are more affordable, while startups like Nio and Xpeng offer advanced features and software, like driving assistance. Tesla only got permission to launch its own driving assistance features in February. 

Tesla reported a steep 49% year-on-year decline in China sales in February, though the drop was exaggerated by the U.S. carmaker pausing production ahead of a revamped Model Y release. BYD’s February sales, on the other hand, rose by 161% (though that figure may have been artificially inflated by 2024’s late Chinese New Year).

BYD was just around 25,000 cars shy of overtaking Tesla to be the world’s largest seller of battery EVs in 2024.

Musk’s popularity in China

Musk is a popular figure in China, thanks to his image as a successful entrepreneur and his public appreciation for his Chinese employees. Tesla was an early backer of China’s EV sector, through its Shanghai gigafactory.

Beijing has also cultivated its relationship with Musk. Vice President Han Zheng paid a visit to the Tesla CEO on his way to Trump’s inauguration earlier this year.

But China’s views of Musk may be shifting.

The Tesla CEO’s comments that USAID funded “bioweapon research, including COVID-19” rocketed around Chinese social media earlier this year, according to the South China Morning Post, with some grumbling that Musk was reopening old wounds about COVID’s origins.

On Monday, the China Passenger Car Association, which tracks car sales in the world’s second-largest economy, made a rare comment on Musk’s politics and how they might affect sales.

“As a successful businessman, one should be embracing 100% of the market: Treat everyone nicely, and everyone will be nice in return,” CPCA secretary general Cui Dongshu said during a Monday briefing, according to Bloomberg. That’s not possible in politics, he continued, as “half the voters will be friendly to you, and half of them won’t be.”

That polarization is the “unavoidable risk that’s come after [Musk] got his personal glory,” he added. 

Musk’s support of the U.S. president is hurting Tesla’s brand in other markets. The company’s sales in European markets like Germany and France have plummeted.

Tesla’s competitors are also taking potshots. Kia Norway drew eyeballs when its social media account posted a photo of its EV3, with a sticker saying, “I bought this after Elon went crazy.” (The ad is now gone, with Kia’s Korean headquarters saying that it never approved the spot.)

Chinese optimism

Chinese stocks, particularly in the tech sector, have rallied this year thanks to DeepSeek and its powerful, efficient, and cheap models. The Hang Seng Tech Index, which tracks tech companies listed in the Chinese city of Hong Kong, is up over 35% in 2025. 

On Monday, Citi upgraded Chinese equities to overweight, citing the emergence of DeepSeek and Beijing’s support for the tech sector. 

That’s in contrast to the U.S., where tech companies are plunging because of tariffs and Trump recession fears. U.S. tech companies, including Tesla, lost a combined $750 billion on Monday. The Nasdaq 100 index sank 3.8%.