Tesla stock falls 8% after Trump criticizes Elon Musk over tax bill and EV mandate dispute
Tesla stock dives after confrontation between Elon Musk and Donald Trump over EV mandate cuts and $2.4T spending bill.
Tesla shares were down Wednesday as tensions flared between Chief Executive Elon Musk and President Donald Trump. Shares of electric vehicle (EV) maker Tesla (TSLA) slid as much as 8% near midday as Trump publicly voiced disappointment with Musk and his opposition to a major Republican tax and spending bill.
In comments from the Oval Office, Trump stated that Musk had previously supported the bill and was aware of what it was about. Trump claimed Musk's opposition came only after finding that the bill would cut EV subsidies directly tied to Tesla's business. Musk responded with "Whatever" on X, the social media platform he owns.
Trump-Musk rift impacts Tesla
The rift between Trump and Musk represents a significant change in their relationship. Musk, a significant donor to Trump's 2024 campaign and the head of the Department of Government Efficiency (DOGE) created by Trump, has become increasingly critical of the latest tax bill. Musk previously described the bill as "disgustingly abominable," and encouraged followers to reach out to their elected representatives to oppose the bill.
Analysts cited as substantially threatening to Tesla, the proposed phase-out of federal EV tax credits. Tesla has relied a great deal on EV tax credits, and, along with it, risk associated with the EV tax credit in phase-out. The Congressional Budget Office stated that the proposed tax bill will add $2.4 trillion to the deficit in the next ten years -- one of the central arguments being made by Musk in his public campaign to halt the bill.
Tesla's stock price is down after political implications of its CEO Elon Musk. Photo: Yahoo finance
Business and political fallout for Tesla
The consequences are affecting more than just Tesla's stock price. Reportedly, Musk is also upset with the Biden administration's decision to block Jared Isaacman's nomination for NASA administrator, a role Musk lobbied for. Isaacman is a close friend, and partner at SpaceX, and this has only made matters worse.
Along with growing concerns from owners about his political leanings and other pressures, including slowing European demand, U.S. showroom protests, and so on, these tensions are building ahead of Tesla's upcoming robotaxi event on June 12, in Austin. Meanwhile, Alphabet's Waymo is enjoying increasing momentum in the autonomous vehicle space and is now completing 250,000 robotaxi trips per week.
