Tesla shares tumble as Trump, Musk escalate attacks: ‘Elon's politics continue to harm stock'

Core Viewpoint - Elon Musk's criticism of President Trump's tax legislation has led to a decline in Tesla's stock, indicating potential strain in their relationship, which has historically benefited Musk's business empire [1][4][5]. Group 1: Stock Performance - Tesla shares dropped over 5% on a day with no significant news, suggesting that Musk's rhetoric is impacting investor sentiment [1][4]. - Overall, Tesla shares are down 22% this year, despite being the most valuable automaker globally with a market value of $1 trillion [17]. Group 2: Legislative Impact - The House version of the budget bill proposes ending the $7,500 electric vehicle subsidy by the end of 2025, which could negatively affect Tesla's demand [13]. - Analysts predict Tesla could face a $1.2 billion hit to its full-year profit and an additional $2 billion setback to regulatory credit sales due to Senate legislation targeting California's EV sales mandates [14]. Group 3: Market Dynamics - Musk's alignment with the Trump administration has alienated some potential Tesla buyers, particularly Democrats, and his recent criticisms may further impact Republican buyers [6][7][16]. - Despite the challenges, Tesla remains the most valuable automaker, significantly surpassing competitors like Toyota, which has a market value of about $290 billion [17].