Tesla Stock Tumbles After Trump Calls Out Musk Over Tax Bill Criticism

• Tesla (TSLA) stock dropped over 9% to $301.50 as CEO Elon Musk’s public dispute with President Trump over a spending bill intensified, raising concerns about Tesla’s growth prospects.
• Musk’s opposition to the bill, which eliminates the federal EV tax credit and is projected to add $2.4 trillion to deficits, has strained his ties with the Trump administration, potentially impacting Tesla and SpaceX.
• The uncertainty surrounding the bill and Musk’s influence, alongside Tesla’s upcoming robotaxi test on June 12, underscores the high stakes for the company’s autonomous driving ambitions and regulatory relationships.

Tesla (TSLA) stock plummeted over 9% to session lows of $301.50 on Thursday, reflecting investor unease as tensions between CEO Elon Musk and President Trump intensified over a contentious government spending bill. The public spat, marked by sharp exchanges, has cast a shadow over Tesla’s near-term outlook, with broader implications for Musk’s business empire and the electric vehicle (EV) industry.

The dispute centers on a proposed bill, dubbed the “Big Beautiful Bill” by some, which faces an uncertain fate in the Senate. The Congressional Budget Office projects the House-passed version would balloon federal deficits by $2.4 trillion over the next decade, a figure Musk has seized upon to rally opposition. Labeling the bill a “disgusting abomination” on Tuesday, Musk escalated his criticism on X, the social media platform he owns, urging followers to pressure lawmakers to reject it. His Wednesday post was blunt: “Call your Senator, Call your Congressman, Bankrupting America is NOT ok! KILL the BILL.” Trump, in response, expressed frustration during an Oval Office press conference, noting Musk’s intimate knowledge of the bill’s details and questioning his sudden opposition, particularly to the removal of an EV mandate. “Elon and I had a great relationship. I don’t know if we will anymore. I was surprised,” Trump remarked. Musk’s retort on X was a curt “Whatever,” signaling a deepening rift.

The fallout extends beyond rhetoric. Bloomberg reports suggest Musk’s frustration partly stems from the bill’s phase-out of the federal EV tax credit, a critical incentive for Tesla’s growth strategy. The credit has driven demand for Tesla’s vehicles, and its elimination could dampen sales momentum. Additionally, The Wall Street Journal highlighted strains over the White House’s decision to withdraw Jared Isaacman’s nomination for NASA administrator, a move that irked Musk, who had championed his ally for the role. These developments underscore the fragility of Musk’s influence within the Trump administration, previously seen as a tailwind for Tesla and SpaceX.

Musk’s broader business interests are at a pivotal juncture. Tesla’s valuation hinges significantly on its autonomous driving ambitions, with a high-profile robotaxi test scheduled for June 12 in Austin. Success in this arena could unlock substantial value, enabling Tesla to scale its robotaxi services and enhance autonomous features for individual owners. However, regulatory hurdles, overseen by bodies like the National Highway Traffic Safety Administration, remain a critical factor. SpaceX, another Musk venture, relies heavily on NASA contracts, making the administration’s goodwill vital. The public discord with Trump threatens to complicate these dynamics, potentially impacting investor confidence.

The bill’s fate is further complicated by the Department of Government Efficiency (DOGE), once spearheaded by Musk, which aimed to slash federal spending. Despite Musk’s bold promises, DOGE has faced criticism for delivering unpopular cuts without the transformative savings envisioned. This backdrop amplifies Musk’s vocal opposition to the bill, as he leverages his platform to shape public and political discourse.

Tesla’s stock slide reflects the market’s sensitivity to these developments. Investors are grappling with the uncertainty of Musk’s strained relationship with the administration, the potential loss of EV incentives, and the broader fiscal implications of the bill. While Tesla’s long-term prospects remain tied to its technological edge in EVs and autonomy, the immediate turbulence underscores the risks of Musk’s high-stakes political engagement. As the Senate deliberates, the interplay of policy, personality, and market dynamics will continue to shape Tesla’s trajectory.

WallStreetPit does not provide investment advice. All rights reserved.

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