Tesla shares plunged 14% on Thursday as a public dispute between US President Donald Trump and Tesla CEO Elon Musk raised concerns about the company’s future. According to Reuters, investors sold off stock following Musk’s sharp criticism of Trump’s tax bill and the president’s response threatening to cut government subsidies and contracts to Musk’s companies.
Tesla’s market value dropped by $150 billion in a single day amid escalating tensions between Musk and Trump. This turmoil comes at a critical time as Tesla pursues approval for its autonomous vehicle technologies and faces regulatory scrutiny over its driver-assistance system after a fatal crash.
“Elon’s politics continue to harm the stock. First he aligned himself with Trump, which upset many potential Democratic buyers. Now he has turned on the Trump administration,” said Tesla shareholder Dennis Dick, chief strategist at Stock Trader Network.
The US Department of Transportation plays a major role in approving Tesla’s plans for self-driving robotaxis, which Musk has heavily promoted as Tesla’s future. However, Trump’s administration has proposed ending the popular $7,500 electric vehicle tax credit by 2025, a move that could hit Tesla’s sales and profitability. JP Morgan estimates Tesla could lose $1.2 billion in annual profits from subsidy cuts and regulatory credit changes.
Musk’s push for a unified federal approval process for autonomous vehicles contrasts with the current patchwork of state regulations. However, federal regulators are reportedly considering rules that could require lidar sensors — a technology Tesla does not use, relying instead on cameras — which could put Tesla at a disadvantage.
Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, said the feud “creates a negative force against Tesla that could jeopardize regulations and risk more government investigations.”
Tesla’s stock has experienced volatility since Musk endorsed Trump’s 2024 re-election campaign. After rising 169% between July and December 2024, the stock slid 54% through early April amid growing protests and slumping sales in key markets including Europe, China, and California.
As tensions escalate, Tesla faces pressure from multiple fronts: political conflicts, regulatory challenges, and investor skepticism. The company remains the most valuable automaker globally, but the uncertainty around government support and regulatory approvals weighs heavily on its market performance.
Article updated 3 weeks ago. Content is written and modified by multiple authors.
