Tesla just took a hit — and it wasn’t from poor sales, a bad product launch, or even a recall. It was politics. More specifically, a public war of words between Elon Musk and President Donald Trump that has investors spooked and Tesla’s stock feeling the heat.
Here’s what went down: Elon Musk called out Trump’s massive tax and spending bill on X, calling it a “disgusting abomination.” His main gripe? The bill slashes electric vehicle tax credits — a move that directly affects Tesla — while keeping oil and gas subsidies intact. Musk didn’t hold back. He claimed the bill was rushed through Congress with no real transparency and slammed it as unfair to clean energy industries. For a guy who’s sunk years into electrifying transportation, this was personal.
Trump didn’t take it lightly. During a meeting with the German Chancellor, he responded in real time, saying he was “very disappointed” in Musk and hinted their once-strong relationship might be over. He accused Musk of knowing the bill inside and out and only complaining after it passed. The jabs didn’t stop there — Trump even suggested Musk could soon start personally attacking him.
Investors weren’t thrilled to be caught in the crossfire. Tesla’s stock dropped over 8% on June 5, landing at $303.23 by the end of trading. That’s a steep fall, even for a company as volatile as Tesla. The concern? Musk’s open political fights could draw unwanted heat to the company, especially as it navigates a changing regulatory environment. Some analysts are already warning that this kind of friction with the White House — particularly when clean energy policies are being debated — could hurt Tesla in the long run.
The timing couldn’t be worse. Tesla is still trying to regain footing after a slower-than-expected Q1, increased competition from China, and a global EV market that’s been wobbling. And now, instead of focusing on innovation or sales, headlines are dominated by Musk’s fallout with Trump and fears of political retaliation. Some insiders even speculate that Musk’s break from his former advisory role in the White House may have triggered the shift in EV policy to begin with.
But Musk isn’t backing down. In a stream of posts, he doubled down on his stance, saying he didn’t get to review the bill and suggesting it was packed with pork-barrel spending. “Keep the EV cuts, fine,” he wrote, “but ditch the mountain of disgusting pork.” He even threw in a jab about how no one in Congress actually read the thing before voting.
So what does this mean for Tesla moving forward? The immediate dip in stock price is a red flag for shareholders. It shows just how sensitive the market is to political drama, especially when it involves someone like Musk, whose personal brand is tightly interwoven with the company’s identity. If this feud escalates — or if EV subsidies continue to be stripped away — it could seriously impact Tesla’s bottom line.
The takeaway? It’s not just policy that moves markets — it’s people. And when two of the most powerful and unpredictable figures in the country go head-to-head, the fallout doesn’t stay on X. It hits the stock ticker too.
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