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Musk vs. Trump: Political Feud Sparks $150 Billion Tesla Meltdown

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πŸ“‰ Tesla shares drop on Musk-Trump confrontation

Tesla shares fell nearly 5% in premarket trading today, extending a steep decline that has already wiped out more than $150 billion in market cap this year. The most recent reason? A renewed feud between Elon Musk and former President Donald Trump.

Trump accused Musk of improperly profiting from government EV subsidies and hinted at pushing new legislation to eliminate the $7,500 federal tax credit for electric vehicles β€” a move that could severely hurt Tesla’s competitive edge in the U.S. market.

This public dispute has fueled growing uncertainty about Tesla’s political risk profile and contributed to a nearly 20% year-to-date decline in its stock price.

βš™οΈ EV subsidy clash: What’s at stake

At the center of the issue is Trump’s proposed legislation, called “One Big Beautiful Bill,” currently under review in the Senate. The bill aims to eliminate EV tax incentives, a key financial pillar for automakers like Tesla.

While some analysts remain optimistic β€” highlighting Tesla’s leadership in EV technology and AI-powered infrastructure β€” others warn that the company could face margin pressure and weak demand if the subsidies are rolled back.

πŸ”» Technical pressures mount

Tesla’s stock has underperformed broader indices in recent weeks. By the end of June, the stock price had fallen 1.8%, and losses have deepened to about 6.6% in the past month. Technical analysts point to a deteriorating valuation trend, with Tesla’s forward P/E ratio approaching overbought territory β€” raising red flags for value-focused investors.

All eyes are now on Tesla’s Q2 earnings report, expected later this month. Forecasts suggest a potential drop in earnings per share (EPS) to about $0.43, which could add more downward pressure if delivery numbers disappoint.

πŸš• Robotaxi rollout sparks optimism

Amid the turbulence, there’s still room for hope. Tesla’s limited robotaxi launch in Austin fueled a recent 8.2% rally, driven by investor enthusiasm for its long-touted autonomous ride-hailing vision.

Analysts view Tesla’s automation arm as a potential long-term growth engine even as the core EV business faces policy and competitive hurdles. One major firm revised its price target upward, citing confidence in Tesla’s mobility tech’s future.

🏁 Summary: Mixed signals for investors
Driving force implications
Political drama Short-term drag; Long-term solutions still uncertain
Market Outlook Analysts divided – some say cautious, others bullish
Catalysts to watch: Q2 earnings, robotaxi scaling, EV policy decisions

βœ… Final Opinion
Tesla stock is in a volatile holding pattern, caught between political drama and long-term innovation bets. The short-term direction depends on:

The outcome of the EV subsidy law

Q2 financial performance, especially deliveries and profitability metrics

Robotaxi scaling and technological advancements in the automation segment

For retail investors and institutional players, Tesla remains a high-risk, high-reward proposition in 2025. Get ready – Q3 could bring even sharper turns.

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