Summary
- Tesla shares sink 14% in heavy volume
- Political tensions have hurt Tesla sales in key markets
- Trump’s ‘big beautiful bill’ would cut EV subsidy
- Musk’s political stance affects Tesla’s market perception
(Reuters) – Tesla shares went into free-fall on Thursday as President Donald Trump publicly feuded with the electric vehicle maker’s billionaire CEO Elon Musk, his self-proclaimed “First Buddy.”
Investors watched the unfolding drama with growing worry about what the fracas could mean for Musk’s business empire. The carmaker’s shares ended the day down 14%, wiping off $150 billion in market value on a day absent other news about the company.
Traders dumped Tesla in heavy trading after Musk quickly responded to Trump’s criticism with social media posts that stepped up criticism of the president’s tax bill. Trump fired back further, alleging Musk was upset because the bill takes away tax benefits for electric vehicle purchases.
Openly feuding with Trump could pose multiple hurdles for Tesla and the rest of Musk’s sprawling business empire. The U.S. Transportation Department regulates vehicle design standards and would have a big say in whether Tesla can mass-produce robotaxis without pedals and steering wheels.
The agency is also investigating Tesla’s driver-assistance software, known as “Full Self-Driving,” following a fatal crash.
“Elon’s politics continue to harm the stock. First he aligned himself with Trump, which upset many potential Democratic buyers. Now he has turned on the Trump administration,” said Tesla shareholder Dennis Dick, chief strategist at Stock Trader Network.
With EV sales falling, Musk over the last year has re-oriented Tesla’s future around self-driving robotaxis. On an earnings call last year, he said investors “should sell their Tesla stock” if they did not believe the company would solve the technological challenges of driverless vehicles. Wedbush analysts have said the AI and autonomous opportunities could be worth $1 trillion alone in market value for the company.
Musk has advocated for one federal approval process for autonomous vehicles to streamline the current maze of different state regulations.
Ross Gerber, CEO of Tesla investor Gerber Kawasaki Wealth and Investment Management, said the feud with Trump “creates a negative force against Tesla” that could jeopardize regulations and risk more government investigations.
“Every benefit that was perceived he would have got now turns into a negative,” Gerber said.
Musk, the world’s richest man and a key figure in the Department of Government Efficiency’s (DOGE) cost-cutting plan for several months, blasted Trump’s “big beautiful bill” this week, after he decided to spend less time in the White House and instead focus on his companies. Following Thursday’s selloff, his net worth fell by roughly $27 billion to $388 billion, according to Forbes.
Musk, the world’s richest man and a key figure in the Department of Government Efficiency’s (DOGE) cost-cutting plan for several months, blasted Trump’s “big beautiful bill” this week, after he decided to spend less time in the White House and instead focus on his companies. Following Thursday’s selloff, his net worth fell by roughly $27 billion to $388 billion, according to Forbes.
Tesla shares slide as Trump hits back at Musk over spending bill
Source: worldautoforum.com
