New York, May 15, 2026, 11:02 (EDT)
Tesla shares slid roughly 3.7% on Friday, with President Donald Trump departing Beijing empty-handed on significant trade progress. Investors saw no new clarity on whether China will greenlight the automaker’s driver-supervised Full Self-Driving software.
This is key: Full Self-Driving, or FSD, sits at the heart of Tesla’s argument that it’s more than just another electric-car company. The feature can operate the car, but drivers still have to stay alert—Tesla stresses that supervision is mandatory, and the vehicle isn’t actually autonomous.
The bigger issue is China. Tesla wants Chinese approval to roll out FSD more broadly in the country, the world’s top car market. Reuters said this week the automaker was one of several U.S. companies pushing for regulatory support and access as Trump and Xi met.
Executives got a foot in the door, but not many answers. According to Reuters, major U.S. business leaders like Elon Musk wrapped up the summit with “little clarity” about any concrete results, as analysts pointed out the trip looked more like a goodwill gesture than a push for quick deals. Reuters
“Beijing never approaches a leadership summit of this sort from a purely transactional perspective,” said Feng Chucheng, founder and partner at Hutong Research, in comments to Reuters. “I wouldn’t use the size of deals to measure the outcome of the summit.”
Han Shen Lin, China country director at The Asia Group, didn’t mince words. “The summit has much more on positive atmospherics than deliverables,” he said. Lin also warned that without concrete achievements, Washington and Beijing could quickly slip back toward escalation.
Prediction-market traders didn’t see a fast turnaround on trade, either. On Polymarket, odds of a U.S.-China tariff agreement landing by May 31 sat at 31%, with $57,614 traded so far—a snapshot of sentiment on the policy landscape Tesla has to navigate in China.
Tesla shares are being measured against a hefty spending spree. Just last month, the company bumped its 2026 capital outlay target above $25 billion as Elon Musk pours resources into artificial intelligence, robotaxis, and humanoid robots. Reuters quoted Morningstar’s Seth Goldstein, who said the whole investment thesis rides on whether investors trust Musk to deliver “seemingly impossible things” as viable businesses. Reuters
Auto demand is showing pockets of strength. Tesla saw its China-made EV sales jump 36% in April compared to a year ago—the sixth monthly increase running. Still, Reuters points out cheaper local competitors and hang-ups with FSD approval could hold back more robust gains.
Tesla isn’t standing still in Europe. On Tuesday, the company announced plans for an additional $250 million investment into battery-cell operations at its Berlin-area plant. That would push annual capacity from 8 GWh up to 18, and see headcount in battery production climb past 1,500.
The catch? Approval and scale could lag behind Musk’s ambitions. Reuters ran Tesla robotaxis through their paces in Texas—results were spotty: delays, cancellations, odd drop-offs. Officials in Austin count around 50 Tesla vehicles operating there. That’s a fraction of Alphabet’s Waymo, which runs 250-plus in the city.
Regulatory moves could still shift the landscape. The U.S. National Highway Traffic Safety Administration gave a nod to the 2026 Model Y, calling it the first to clear its updated driver-assistance system tests. Still, Tesla isn’t in the clear: the agency has open investigations, including one that looks at FSD and whether it struggles in low-visibility situations.
Investors clearly wanted more than handshakes out of Beijing, at least for now — the stock’s move says as much. Tesla hasn’t lost the market’s attention. But with China FSD clearance still out of reach, Friday’s selloff doesn’t look like a blip; it’s another warning on execution.
