Elon Musk’s Tesla (NASDAQ: TSLA) is experiencing a stark contrast in its global market presence. While the EV giant faces backlash and declining sales in Western markets, China appears to be an oasis of stability. This unusual divergence underscores the brand’s resilience in the world’s largest electric vehicle (EV) market, even as Musk’s political stances fuel controversy elsewhere.
A Global Backlash Against Tesla?
Musk’s public persona has long been interwoven with Tesla’s brand identity, and recent political controversies are putting that to the test. His reported support for the far-right Alternative for Germany (AfD) party has led to severe consequences in key markets. In Germany, Tesla’s sales plunged by a staggering 76% in February 2025. California, a traditionally strong market for Tesla, is also showing signs of weakening demand.
The online #TeslaTakeDown movement is further amplifying the brand’s struggles. Activists have planned demonstrations at 72 Tesla locations across the U.S., and high-profile figures like singer Sheryl Crow have publicly distanced themselves from the company. Social media users have taken to marking their Tesla vehicles with stickers clarifying their purchase “is not an endorsement” of Musk’s views.
China’s Love Affair with Musk and Tesla
In contrast, China appears largely unaffected by these controversies. Musk enjoys considerable popularity in the country, thanks in part to his mother, Maye Musk, a well-known personality on Chinese social media. With nearly 700,000 followers on Xiaohongshu, she actively promotes Tesla while engaging in cultural exchanges and collaborations with Chinese brands.
Musk’s diplomatic approach toward China has also played a key role in Tesla’s success there. He has maintained a favorable relationship with Chinese leadership, aligning with Beijing’s stance on key issues like Taiwan and the U.S.-China trade decoupling. Tesla’s continued expansion in China, including the recent opening of a battery plant in Shanghai, further solidifies its commitment to the market.
China’s EV Market: Tesla’s Real Threat?
While Tesla’s brand remains strong in China, its competitive position is weakening. The country’s EV sector is evolving rapidly, and Tesla’s market share is slipping. In February 2025, Tesla’s China shipments fell by 49%, reflecting increasing competition from domestic automakers like BYD (OTC: BYDDF), Li Auto (NASDAQ: LI), NIO (NYSE: NIO), and Xpeng (NYSE: XPEV).
Tesla’s Model Y remains a best-seller in China, but the gap is closing. BYD’s Seagull and other local brands are offering cutting-edge technology at lower price points. Additionally, Chinese manufacturers are integrating advanced driver-assistance systems as standard features, whereas Tesla continues to charge a premium for its Full Self-Driving (FSD) package.
Tesla’s Future: A Brand at a Crossroads
As Tesla navigates political fallout in the West and intense competition in China, the company faces a critical inflection point. While Musk’s influence remains strong in China, Tesla’s technological edge is diminishing against local brands that are innovating at a breakneck pace. The company must adapt quickly or risk losing ground in the very market that has been its lifeline amidst global headwinds.
