Tesla Stock: Musk-Trump Feud Sends Shares Tumbling

Tesla's stock has come under significant pressure as CEO Elon Musk's relationship with former ally Donald Trump deteriorates over proposed legislation. After Trump expressed disappointment with Musk's public opposition to his "Big Beautiful Bill," Tesla shares dropped nearly 6% before settling with a 4% loss. The heart of the conflict lies in the bill's potential elimination of electric vehicle subsidies and a 30% tax credit for solar installations—both critical to Tesla's business model. Musk labeled the legislation a "disgusting abomination" and called for resistance against it, claiming concern about expanding government deficits. Trump countered that Musk's objections are purely self-interested, suggesting the Tesla CEO only began protesting when he learned about the threatened EV incentives.

Broader Challenges Facing Tesla

The political clash comes at a particularly vulnerable time for Tesla, which is already navigating troubled waters. The company experienced a 13% drop in sales during the first quarter compared to the previous year, marking a concerning trend after 2024 saw Tesla's first annual sales decline. Chinese competitors like BYD are gaining ground in critical markets, including Europe, where BYD recently outsold Tesla for the first time. These market pressures have contributed to Tesla stock falling 17.78% since the beginning of the year, now trading approximately 28% below its all-time high despite a recent 20% recovery.

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Source StockWorld