The Tesla news of the day isn't really about Tesla. It's about China and its plans to dominate the global auto market.

Wednesday, Michigan Senator Elissa Slotkin shot off a series of tweets on X, suggesting President Donald Trump might allow Chinese cars to be sold in America. That isn't a good idea, according to the Senator: "In Germany, Chinese owned car companies only entered the market in 2021. Today, they own around 8% of the market. As a result, Volkswagen, is cutting 50,000 jobs. 50,000."

The White House didn't respond to a request for comment. President Trump has backed tariffs on Chinese cars in the past. He has also said that Chinese car makers are welcome if they build plants and hire American workers. That process would take years

Chinese automotive overcapacity has become an issue for the entire auto industry. The country has roughly twice as much car building capacity than demand, which hasn't been good for profits. Only three of 30 Chinese EV makers were profitable in 2025, according to Alix Partners. Overcapacity has led Chinese car companies to look overseas for growth, which has pressured profits and stock prices of European auto makers, such as Volkswagen.

It hasn't pressured profits in the U.S., though. Chinese cars are effectively banned by tariffs and data security rules. Any drastic policy changes that allows Chinese imports would threaten profits and shares prices of General Motors and Ford Motor.

As for Tesla, China remains a critical, if unhealthy, market. The country accounted for more than 20% of total 2025 revenues. It's also the home to Tesla's most productive automotive plant in Shanghai.

Tesla has partly mitigated the China risk by not focuing on cars. It's pivoted to AI, believing physical AI applications such as robot and robo-taxis will unlock a new era of earnings growth at the company. Tesla launched a robo-taxi service in Austin, Texas in June 2025.

It could try to do the same in China eventually. When it does, Tesla will face domestic robo-taxi competition, just like it does in the U.S.

Tesla stock was down 0.7% in premarket trading at $365.23, while S&P 500 and Dow Jones Industrial Average futures were flat and up 0.2%, respctively.

Coming into Thursday trading, Tesla stock was down 18% year to date and up 6% over the past 12 months.