Just as Tesla was starting to bounce back after months of
intense scrutiny, fueled mainly by Elon Musk’s deepening involvement in
politics, another storm has hit. And this time, it’s personal. Musk took a jab
at Donald Trump, and surprise, surprise: Tesla’s stock took a hit, subsequently
impacting the S&P 500 and
Nasdaq.
In short, Musk publicly criticized a Trump-backed budget
proposal, calling it a “disgusting abomination.” He warned that the bill would
balloon the national deficit and plunge the American people into “devastating”
debt. In addition, the plan slashes subsidies for electric vehicles, striking
at the core of Tesla’s business model.
What followed was a sharp exchange of insults between Trump
and Musk on their respective social media platforms, Truth Social and X. The
tone was far from diplomatic, and Tesla
stock took a big hit again — on Thursday, the stock
plunged about 14.3%, wiping out more than $150 billion in market value.
Feeling he might have taken things too far, Musk began to
backpedal. He called for “cooler heads to prevail” and even backtracked on his
stance to halt the use of SpaceX’s Dragon spacecraft. The message can be
translated as he doesn’t want to pick a fight with the president, which could
end badly.
Either way, investors seemed to appreciate the shift. Tesla
shares have started to bounce back, helped by Trump praising Musk and
reassuring the public that he’s not planning to ditch his Tesla or Starlink
setups at the White House, along with wishing Musk “the best.” Damage control,
it seems, is in full swing — on both sides.
So, will Tesla stock keep going up?
If this narcissistic confrontation is reignited, Tesla
could become collateral damage. For now, Musk’s retreat from open political
lobbying offers a glimmer of hope. There may even be behind-the-scenes
negotiations to save electric vehicle tax credits in the federal budget, a
lifeline for Tesla.
Without that support, the company could lose between $1.2
and $2 billion. In 2024, Tesla made $2.76 billion from regulatory credits and
$595 million in the first quarter of 2025. That same quarter, it only reported
$420 million in net income, meaning it wouldn’t have been profitable without
those credits.
And that’s not all. Musk’s
robotaxi ambitions — a bold bid for a slice of a
projected $1 trillion market – could draw even more political fire if the
dispute escalates. It’s worth noting that Tesla has promised to launch its
robotaxi service this month, and June 12 could be D-Day – let’s see how things
progress now.
This article was written by FL Contributors at www.forexlive.com.
