Tesla Inc. [NASDAQ: TSLA] shares dropped approximately 3.7% on Friday, May 15, falling to around $428 according to Google Finance data, after President Donald Trump departed Beijing without securing Chinese regulatory approval for the company’s Full Self-Driving software despite CEO Elon Musk’s high-profile presence in the presidential delegation throughout the three-day summit.

The selloff reversed a strong preceding run that had seen Tesla gain roughly 3.5% for the week heading into Friday and surged 9.6% the prior week, leaving the stock down approximately 1% year to date as investors concluded that the diplomatic goodwill of Musk’s seat at the Beijing table had not translated into the concrete regulatory clarity that would move Tesla’s China value proposition forward in a measurable way.

Full Self-Driving is at the centre of Tesla’s China investment thesis because securing broader regulatory approval would give the company a critical software edge over local rivals BYD, Xiaomi, Geely, and Huawei, many of which are bundling advanced driver-assistance systems into lower-cost vehicles without the separate subscription fees that Tesla charges for FSD in the United States at $99 per month.

Tesla ended Q1 2026 with 1.3 million FSD subscribers globally, up from 850,000 a year earlier, a meaningful recurring revenue stream that management has identified as the key to transforming the company from a vehicle manufacturer into a platform business, and China’s absence from that subscriber base represents a significant opportunity left on the table.

Reuters reported that major US business leaders, including Musk, wrapped up the summit with “little clarity” about concrete results from the China meetings, and analysts at Morningstar described Tesla’s entire investment thesis as riding on whether investors trust Musk to deliver seemingly impossible things as viable businesses, a bar that the summit’s lack of tangible deliverables did nothing to lower.

China-made EV sales rose 36% in April compared to a year ago, continuing a six-month positive trajectory, but Tesla’s share of China’s new-energy vehicle market fell to just 3%, with its pure battery-electric segment share slipping to 4%, underscoring the competitive pressure from domestic rivals that FSD approval could partially offset.

The Shanghai Gigafactory remains Tesla’s most important manufacturing asset globally, accounting for 60% of total deliveries in Q1 2026 and shipping more than 53,000 vehicles internationally in April alone, meaning any regulatory action that affected the facility’s operating status would have an outsized impact on the company’s global output.

Tesla’s Wall Street analyst consensus sits at Moderate Buy, with 12 Buy ratings, 12 Hold ratings, and 5 Sell ratings, and a consensus 12-month price target of approximately $403.86, implying roughly 9% downside from pre-selloff levels and suggesting that the analyst community has already been pricing in execution risk around the China FSD approval timeline.