Tesla shares were down just over 12% on Thursday after CEO Elon Musk sounded the alarm over Chinese electric-car makers, which he called “the most competitive car companies in the world.”

On Tesla’s Wednesday earnings call, Musk claimed that Chinese carmakers, which include BYD, Geely, and SAIC, are “extremely good,” and could threaten other carmakers in the U.S. and elsewhere if governments do not step in.

“Frankly, if there are not trade barriers established, they will pretty much demolish most other car companies in the world,” he said.

In addition to Musk’s China comments, lower predicted sales numbers for 2024 and uncertainty about whether the Fed would lower interest rates this year took a $82 billion bite out of Tesla’s market cap on Thursday.

Tesla did not immediately respond to Fortune’s request for comment.

The stock was trading about 12% down from the previous night’s close on Thursday afternoon, at around $182, and was down 27% year to date, with some market onlookers calling for it to lose its label as one of the so-called Magnificent Seven stocks.

Dethroned as EV leader

Earlier this month, Tesla lost its status as the world’s largest EV maker to the Warren Buffett–backed Chinese carmaker, BYD, despite implementing multiple price cuts on its U.S. vehicles the prior year, partly to compete with lower-cost Chinese EVs.

BYD keeps its costs low in part by owning every step of the supply chain, including the production of lithium batteries—the costliest component in electric vehicles. Still, some have accused BYD and other Chinese car companies of anticompetitive behavior.

The Biden administration has explored raising tariffs on Chinese EVs as the country continues to dominate the sector. Chinese electric vehicles are already subject to a 25% tariff in the U.S.

Investigators from the European Commission also plan to visit several Chinese automakers over the coming weeks as the European Union decides whether to raise tariffs on Chinese companies to protect European carmakers. European Commission President Ursula von der Leyen in September accused Chinese automakers of benefiting from large state subsidies that keep their prices “artificially low.”

“This is distorting our market,” she added.

Meanwhile, Tesla is in the process of launching its own lower-cost model that could allow it to compete in a distinct category from that of its higher-price-tag vehicles. Musk said on Wednesday’s earnings call that production will begin on Tesla’s “next-generation” $25,000 electric vehicle in mid-2025.

It is still unclear whether Tesla’s success in the more expensive EV category will translate to the lower-cost EV sector, which is largely dominated by Chinese companies. Still, in terms of licensing and partnering, Musk said Wednesday that Tesla is willing to play nice with Chinese companies—for a price.

“We’re also happy to license for self-driving, perhaps license other technologies and anything that could be helpful in advancing the sustainable energy revolution,” he said.

Tesla’s drop almost equal to GM and Ford’s entire value

The $82 billion decline in Tesla’s market value as of midafternoon on Thursday nearly exceeds the entire valuations of both GM ($48 billion) and Ford ($45 billion), and equals around one-third that of Toyota ($270 billion). Since Tesla now confirms it won’t come anywhere near meeting its own, or Wall Street’s, expectations for either volume or margin growth in the next couple of years, the big question for investors is whether the stock’s newly discounted price accurately reflects the new, downsized expectations. The bulls will argue that at these prices, Tesla’s stock is still a good deal.

The numbers, however, are daunting. Though Tesla’s stock price is falling, so too are its earnings, meaning that its price-to-earnings multiple remains towering. In Q4, Tesla’s pretax income, excluding regulatory credits, was roughly $2 billion (after adjusting to a normalized tax rate and excluding a big one-time tax benefit). Its net earnings have fallen rapidly in past quarters, going from $3.9 billion in Q4 of last year to $2.4 billion in Q3 of 2023 before sliding once again.

A steep climb for its stock to recover

Since Tesla presented virtually no positives on the call, let’s assume that its net income is now running at the current clip of $2 billion a quarter or $8 billion a year. That puts its price-to-earnings ratio at 72. How fast must Tesla’s profits wax to grow into that still astounding valuation?

For investors to pocket a 10% annual gain over the next seven years, Tesla’s market cap would need to reach $1.2 trillion by early 2031. If we assume its P/E will decline to a still formidable 30, the EV giant will need to post GAAP net earnings of $40 billion. That’s almost half of what Apple makes now, 60% of Alphabet’s current profits, and twice what Toyota’s averaged over the past three years.

The chances of getting anywhere near a double-digit return gets even dimmer if Musk gets his way, and the Tesla board awards him an extra 12% or 13% of Tesla equity to entice the maverick to develop an AI juggernaut for the automaker. Musk wants the shares for free as a reward for his additional services. Unlike any other stock offering, this one wouldn’t put cash for investment in Tesla’s war chest. Put simply, the move would dilute current shareholders so that instead of owning 88% of Tesla, they own 76% or 77%. Hence, their share of the hypothetical, probably mythological $1.2 trillion valuation would go from $1.05 trillion to $920 billion, cutting their return from 10% to 8.8%.

The last thing Tesla investors need is for Musk to raise the bar on garnering decent gains on his stock. Even the Tesla bulls must be questioning whether Elon himself sees where his stock is headed, and wants to get a lot more for free to cushion the blow.

This story was originally featured on Fortune.com