Tesla shares drop as Elon Musk revives conflict with Donald Trump

Tesla Shares Drop Amid Tensions Between Musk and Trump

Tesla’s stock experienced a notable decline of over 7% on Tuesday, wiping out billions in market value for the electric vehicle manufacturer. This drop was linked to an escalating feud between CEO Elon Musk and former President Donald Trump.

As of 9:40 AM Eastern time, Tesla shares were down $22.78, or 7.17%, settling at $294.88 per share.

The decline in stock prices has raised concerns regarding federal subsidies, potentially impacting both Tesla and SpaceX, following new criticisms from Trump on his social media platform.

Trump wrote, “Elon may get more subsidies than anyone in history, but without them, it seems Elon might have to shut down and head back to South Africa,” making it clear he feels strongly against EV mandates.

He added, “Without rocket launches, satellites, or electric vehicles, our country could save a lot of money. Maybe Doge should take a look at this?”

This criticism followed Musk’s disapproval of Trump’s recent tax and spending bill in the Senate, which could potentially lead to a loss of around $1.2 billion in annual profits for Tesla. Musk labeled the bill as “crazy and destructive,” and criticized handouts to established industries, suggesting they harm future development.

Musk, who had previously backed Trump, also took issue with lawmakers who promised to cut spending but continued to support significant debt increases. He even shared an AI-generated image portraying political hypocrisy with the caption “liar.”

Trump quickly responded, emphasizing that Musk should have understood his opposition to EV mandates long before supporting him for president, underscoring their political rift.

This renewed conflict echoes earlier tensions from June, which had resulted in a massive loss of over $150 billion in Tesla’s market value in just one day.

Wedbush analyst Dan Ives noted that this back-and-forth between Musk and Trump could be wearing thin for shareholders. “While the sparring will persist as Congress discusses the budget, Tesla investors just want to see the company focus on its core business, rather than these political disputes,” he commented.

Adding to the pressure, new sales data indicated a decline in Tesla’s performance in Sweden and Denmark for the sixth month in a row. The company is expected to announce global vehicle delivery figures on Wednesday, with analysts predicting an 11% drop compared to last year.