Tesla Stock Spirals After Ruthless Trump Claim
Tesla shares plummeted following a renewed public clash between CEO Elon Musk and President Donald Trump, exposing deep political fault lines that are now spilling into market performance.
The conflict erupted after Musk took to X, formerly known as Twitter, to denounce a proposed $3 trillion tax and spending bill reportedly backed by Trump. Musk called the plan “DEBT SLAVERY” and warned he would bankroll primary challenges against Trump-aligned politicians who supported it.
Trump responded sharply on Truth Social, suggesting the government could target Musk’s companies for investigations. He also floated the idea of revoking Musk’s legal status in the U.S., saying, “Perhaps we should have DOGE take a good, hard look at this,” about Musk’s now-defunct position as head of the Department of Government Efficiency (DOGE).
Tesla Market Reaction Is Immediate and Sharp
The market reaction was swift. Tesla shares dropped between 5.5 and seven points in pre-market trading and are now down nearly 13 percent over the past five days. The company declined to comment when reached by the media.
The breakdown in relations marks a dramatic turn from the earlier alliance between Musk and Trump, which began during the 2024 campaign. At the time, Musk contributed significant financial support to Trump’s bid and was rewarded with political latitude that helped fend off regulatory scrutiny. Federal agencies had investigated several Musk-led ventures, including the National Highway Traffic Safety Administration’s loking into Tesla’s self-driving tech, the FCC’s review of SpaceX’s satellite operations, and the EPA’s concerns over the Boring Company’s land use.
An Uneasy Alliance Unravels
Investors initially cheered Musk’s proximity to the administration. Tesla stock surged after Trump’s election and again after Musk’s appointment to the DOGE board. But the gains proved unstable. Concerns over Musk’s growing political role, compounded by stagnating global sales, aging product lines, and missed tech milestones, drove the stock down by March.
Musk’s resignation from DOGE in late May triggered a sharp rebound, with shares rising 20 percent in three days. However, that optimism faded quickly. When Musk again criticized Trump’s fiscal agenda, the White House responded with veiled threats, sparking new volatility.
Volatility May Be the New Normal
Analysts warn that this kind of market turbulence is becoming routine for Tesla. Bret Kenwell, an investment strategist at eToro, stated, “Volatility has been the price of admission for the stock’s long-term gains.”
Tesla is expected to release quarterly delivery numbers tomorrow, with analysts forecasting a 13 percent decline — another potential blow to a company already facing external pressure and internal uncertainty.
