Tesla & Trump: Musk’s Challenges Deepen
Tesla’s stock price plunged after a public feud erupted between Elon Musk and Donald Trump, with shares dropping considerably amid sharp criticism of the spending bill. The ongoing dispute casts a shadow over Tesla’s future, with analysts now dissecting the implications: concerns about the robotaxi timeline and possible EV credit adjustments as an inevitable result of political fallout. The already-fragile relationship has led to a market cap loss exceeding $150 billion, stirring calls for increased leadership oversight.Beyond the financial ramifications, Tesla possibly faces regulatory hurdles and a loss of government support. Delve deeper into the story with updates via News Directory 3, including commentary from Goldman Sachs and othre key analysts. Discover what’s next for the automotive giant as Musk navigates this challenging terrain.
Tesla Stock plummets Amid Elon Musk,Donald Trump Feud
Tesla is grappling with significant challenges after a public falling out between CEO Elon Musk and President Donald Trump. The dispute, triggered by Musk’s criticism of Trump’s spending bill, has sent Tesla shares tumbling and raised questions about the company’s future.
The conflict began when Musk,fresh off his stint as a special government employee,labeled Trump’s spending bill an “abomination” on X. Trump retaliated, calling Musk “CRAZY” and threatening to cut off government contracts and subsidies for Tesla. This exchange led to a 14% drop in Tesla’s stock price on Thursday, wiping out approximately $152 billion in market value.
The ramifications of this feud extend beyond financial losses. The once-close relationship between Musk and Trump, which saw Tesla showcase its vehicles at the White House, has entirely dissolved. A White House official confirmed that the president has no interest in resolving the dispute with Musk.
The Trump administration’s potential ire could impact Tesla in various ways, from future regulations and investigations to government support and tariff exemptions. tesla was already underperforming before the feud, with revenue down 9% in the first quarter due to increased competition and consumer backlash against Musk’s political activities.
Public officials are now calling on Tesla’s board to take action. New York City Comptroller Brad Lander stated that the “schoolyard fight” highlights Tesla’s weak accountability measures. Maryland Comptroller Brooke Lierman echoed this sentiment, emphasizing the need for a CEO who prioritizes the company’s interests.
“Musk’s behavior continues to threaten the future of Tesla,” Lierman said.
Analysts are also expressing skepticism about Tesla’s business fundamentals. Goldman Sachs recently lowered its price target on Tesla, citing weak delivery numbers in the U.S.and Europe. Quality issues, including multiple recalls of the Cybertruck, add to the concerns.
While Musk urges investors to focus on the future of autonomous vehicles and humanoid robots, Tesla faces stiff competition in these areas. Waymo, owned by Alphabet, is already operating commercial robotaxi services, and Tesla’s robotaxi launch in Austin has faced delays.
Despite these challenges, some investors remain optimistic about Tesla’s long-term prospects. FundStrat’s Tom Lee believes the selloff was “overdone,” and Morgan Stanley’s Adam Jonas highlighted Tesla’s strengths in AI, autonomy, and manufacturing.
However, the immediate impact of the Musk-Trump feud could be the rollback of EV credits and the loss of preferred treatment on tariffs, further complicating Tesla’s path forward.
What’s next
Tesla investors are now watching to see how Musk will divide his time and energy between tesla and his other ventures, including SpaceX, xAI, and Neuralink. The company’s ability to navigate the political landscape and address its operational challenges will be crucial for its future success.