Financial disaster unfolding: The estrangement between Trump and Musk is causing a downturn in Tesla's share value.
The seemingly friendly banter between President Trump and Elon Musk has turned sour, with the President expressing disappointment over Musk's opposition to the GOP's tax cut package. Here's the lowdown on this rollercoaster ride after Musk's tenure as a special government employee ended.
Tesla's Stocks in Turmoil
The tax bill and Trump's backing of it has ignited a war of words between the billionaire CEO of Tesla and the 45th President. This public spat sent Tesla shares plummeting by a whopping 14% during trading hours and further in after-hours trading, with shares sinking as much as 2.7%.
Tesla Inc. (TSLA) shares had been gaining ground in the run-up to Musk's departure as a special government employee, but these gains unraveled after Musk stepped up his criticism of the GOP bill and the President. The tumultuous ride continues as shares are down nearly 20% over the last five days and over 24.9% year to date.
Musk vs Trump: Round 1
TSLA
Musk has been vocal about his criticism of the tax bill, labeling it a "disgusting abomination" and urging Republican lawmakers to scrap it due to its projected impact on budget deficits. Trump, however, commented that he was "very disappointed" with Musk's criticism of the bill and hinted at Musk's awareness that EV subsidies for Tesla would be cut.
TESLA INC.
Musk's Counter and Trump's Response
325.31
Musk responded on his social media site, X, saying he had never seen the bill and again slamming it as being full of wasteful spending. Trump then suggested canceling contracts and subsidies related to Musk's companies to save billions of dollars, resulting in Musk stating that SpaceX would decommission its Dragon spacecraft.
6.20
A Spat Gone Sour
1.94%
The feud escalated as Musk took aim at Trump's tariff policies, saying they would cause a recession in the second half of the year. Musk also posted allegations against Trump, claiming that he was in the Epstein files and that the files had not been made public for that reason.
The Future of the Friendship
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Analyst Dan Ives commented that this feud creates major uncertainty for Tesla's future regulatory environment under the Trump administration. Despite this, Ives maintains a bullish view on Tesla and the autonomous front, but warns that this spat needs to settle down for the betterment of both parties.
Sources:
- CNN
- The Verge
- Business Insider
- Yahoo Finance
- TechCrunch
- CNBC
- The disagreement between President Trump and Elon Musk over the tax bill has led to a decline in Tesla's stock market performance, with TSLA shares dropping by 14% during trading hours and continuing to fall in after-hours trading.
- Musk's criticism of the tax bill and his exchanges with Trump have raised concerns about Tesla's regulatory environment under the Trump administration, according to analyst Dan Ives, despite Ives maintaining a bullish view on Tesla and the autonomous front.
- The tax bill has been a hot topic in the economy, with Musk labeling it a "disgusting abomination" due to its projected impact on budget deficits, while President Trump has hinted at possible consequences for Musk's companies if the EV subsidies for Tesla are cut. This discord has also seen Musk make allegations against Trump and criticize his tariff policies, which Musk claims could cause a recession in the second half of the year.
