Chinese electric vehicle maker Nio Inc.’s (NYSE:NIO) CEO William Li thinks Tesla Inc. (NASDAQ:TSLA) is the biggest beneficiary of Chinese regulations, BBC reported Wednesday.

What Happened: Li told the BBC that the U.S. electric vehicle maker has been the biggest beneficiary of the Chinese government’s efforts to spur development. He added that policy support from Beijing does not specifically apply to one company or one industry.

“This is not just about one company but the whole (of) society have to work on it,” Li was quoted by BBC as saying.

See Also: How Elon Musk Responded To Competitor Nio's 100,000th Vehicle Milestone

Why It Matters: Tesla and Nio are pitched against each other in China, which is the world’s largest EV market. Electric vehicles are seeing strong demand from consumers in China after the government launched subsidy programs and announced the development of a national charging network.

Tesla CEO Elon Musk has taken digs at Nio in the past. In November, when Nio's shares rose past a psychological resistance point of $40, Musk brushed it off, saying, "420 is ten times better than 42," in a reference to his company's shares, which were trading at a price point about 10 times more than Nio's.

Tesla entered the Chinese market in 2019 and has seen rapid growth. Tesla’s Gigafactory in Shanghai is its first factory outside the U.S. The Palo Alto-based company is now preparing to expand the factory as part of its efforts to boost sales in China, the company’s second-largest market.

However, Tesla has been facing issues in China of late. It was reported in March that China restricted access for Tesla vehicles to military and state-owned facilities on the grounds that cameras installed in the vehicles will collect sensitive information.

Tesla also suffered a backlash at the Shanghai Auto show on Monday, with protestors alleging their vehicles were plagued by malfunctioning brakes.

See also: How to Buy Nio Stock

Price Action: Tesla shares closed 3.5% higher in Wednesday’s regular trading session at $744.12, but declined 0.4% in the after-hours session to $740.95.

Nio shares closed 5.3% higher in the regular trading session at $38.90 but declined 0.5% in the after-hours session to $38.69.

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Photo courtesy: Tesla