Tesla $TSLA ( ▼ 4.14% ) is trading about 1.5% higher in premarket action Monday after Elon Musk posted about having a “lovely dinner” with President Trump and Melania Trump over the weekend, signaling a visible thaw in their relationship.
Musk shared a photo from Mar-a-Lago alongside the caption “2026 is going to be amazing,” suggesting the Tesla CEO and the president are once again on friendly terms after a very public falling out last year.
Politics beats China worries, for now
Improved optics with the White House appear to be outweighing concerns around Tesla’s China business. Earlier Monday, data from China’s Passenger Car Association showed Tesla’s shipments in the country fell 7% in 2025 to 851,732 vehicles.
That said, December sales in China were relatively strong, rising 3.6% from December 2024. The bigger issue is the full-year picture, where Tesla lost ground as competition intensified and pricing pressure mounted across the EV market.
EV crown slips as investors look past deliveries
Last week, Tesla confirmed that global deliveries declined for a second straight year, while China’s BYD $BYDDY ( ▲ 1.12% ) posted a 28% jump in annual EV sales and overtook Tesla as the world’s largest EV seller.
Despite those fundamentals, the market reaction suggests investors are still highly sensitive to political dynamics around Musk and Tesla. For now, perceived alignment with the Trump administration is acting as a short-term tailwind, even as questions linger about demand, competition, and Tesla’s core auto business heading into 2026.