Musk-Trump Feud: Tesla Troubles
Tesla’s stock plummeted following the escalating feud between Elon Musk and Donald Trump, a development sparking serious concerns. The primary takeaway? Shares of the electric vehicle manufacturer faced a significant drop, impacting the company’s market capitalization amid an already challenging climate. The news out of News Directory 3 indicates that potential government retaliation and scrutiny over existing investigations could now intensify and damage investor confidence. this public feud between the Tesla CEO and the former president, with its sharp barbs and threats, has the market and analysts on edge. The impacts could reach the electric vehicle incentives. Could a damaged relationship trigger new challenges? Discover what’s next …
Tesla Stock Plummets Amid Elon Musk’s Feud with Donald Trump
Updated June 06, 2025
Tesla’s challenges have deepened as CEO Elon Musk’s relationship with former President Donald Trump deteriorated into a public exchange of criticism. The Tesla stock experienced a important drop,intensifying existing pressures from declining sales,a lack of new models,and brand damage. This Musk Trump feud raises concerns about potential federal repercussions for the electric vehicle manufacturer.
Trump, with the resources of the federal government, could intensify scrutiny on Tesla. Ongoing investigations by the National Highway Traffic Safety Management (NHTSA) into Tesla’s Autopilot and Full Self-Driving features, linked to fatal accidents, may face renewed emphasis. Additionally, the Securities and Exchange Commission (SEC) could review Musk’s public statements regarding Tesla, and the company’s reliance on manufacturing in China could be examined.
“His surface area for attack is remarkable”
NHTSA is also seeking details on Tesla’s robotaxi plans before Musk’s planned pilot program launch in Austin this month. While autonomous vehicles and robotaxis are primarily regulated at the state level, a negative federal review could pressure Texas Gov. Greg Abbott to impede Tesla’s robotaxi launch. According to one automotive executive who requested anonymity, Trump could easily revive dormant investigations, targeting areas Musk believed were resolved.
The conflict between the two billionaires escalated after Musk criticized Trump’s budget bill, citing its contribution to the national deficit. The exchange,unfolding on X and Truth Social,involved Musk claiming Trump wouldn’t have been elected without his support and hinting at supporting impeachment. trump responded by threatening to cut government subsidies and contracts for Musk, potentially impacting SpaceX’s federal contracts. Steve Bannon, a Trump ally and vocal Musk critic, suggested investigating Musk and deporting him.
musk’s outspoken criticism of Trump could have significant consequences for Tesla. While his past criticism of President Joe Biden went largely ignored, Trump’s history of holding grudges suggests a different outcome.As president, Trump has the authority to direct federal agencies and policies that could negatively impact Tesla.
“People were betting the Musk/Trump partnership would result in policies that would directly benefit Tesla”
The immediate impact of the feud was a 14% drop in Tesla’s share price, wiping out $152 billion in market capitalization. The electric vehicle maker’s stock is down 30% this year.
loren McDonald, chief analyst with Paren, an electric vehicle industry data company, suggested that investors may have anticipated policies benefiting Tesla from a Musk-Trump alliance. With the relationship fractured, trump may no longer feel obligated to support Tesla or EVs, potentially reverting to an “EVs are evil” stance.
Investor Ross Gerber, CEO of gerber Kawasaki Wealth and Investment Management, expressed concern about the impact on shareholders, urging someone to take Musk’s phone away.
Tesla already faces challenges, including declining sales in Europe and China, coupled with rising costs