Tesla Stock Plummets Following Feud Between Elon Musk and Donald Trump
Tesla’s stock has experienced a significant decline of 16% since CEO Elon Musk criticized President Donald Trump’s substantial spending bill last week. This drop adds to a substantial 33% decrease since Inauguration Day. The downward trend began shortly after Musk distanced himself from the Trump administration, which occurred the day after the criticism began.
Their relationship publicly deteriorated when Trump expressed disappointment over Musk’s remarks regarding the spending bill. Musk, recognized as the world’s richest person, transitioned away from his role as the head of the Department of Government Efficiency to focus on his various businesses, including Tesla, SpaceX, and Neuralink. These companies have recently faced criticism, especially as Musk implemented significant cuts to the federal workforce.
This year, global Tesla sales have plummeted sharply. Tensions reached new heights when Trump and Musk exchanged harsh words, with Trump threatening to cancel Musk’s government subsidies and contracts. By the end of Thursday, Tesla’s stock had fallen over 14%.
As the only public company Musk operates, Tesla has faced scrutiny, especially given recent actions by Trump to promote the automaker under contentious circumstances. The rift between the two intensified following Musk’s harsh criticism of the spending bill, which he labeled “a disgusting abomination.” Musk’s dissatisfaction stems partly from the exclusion of an electric-vehicle tax credit that could incentivize Tesla purchases, a move he argues could exacerbate national debt, projected to rise by $2.4 trillion over the next decade. He characterized the bill’s impact on fiscal responsibility as misguided.
Trump responded, asserting that Musk seemed to have had no issues with the bill until he learned that the electric vehicle mandates would be slashed, undermining Tesla’s potential earnings. Musk, disputing this claim, insisted that he had not seen the bill prior to its passage. While some analysts point to Musk’s comments and the electric vehicle tax credit issues as contributing factors to Tesla’s stock decline, they note that broader regulatory concerns stemming from Trump’s response are at play.
Musk suggested that his contributions were crucial to Trump’s electoral success, while Trump joked about Musk’s apparent longing for the Oval Office. Overall, the evolving dynamics between these two high-profile figures reflect broader concerns in the market, affecting both Tesla and Trump’s own ventures, including his media company, which has seen significant stock declines as well.