Tesla’s bad start to the year keeps getting worse.
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 to 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’s 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 support for the tech sector.
That’s a contrast to the U.S., where tech companies are plunging due to 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%.
