What will happen to Tesla stock if Trump cuts Musk off?

Core Insights - Elon Musk's companies, including Tesla, have significantly benefited from government subsidies, tax credits, and federal contracts, despite Musk's public disdain for big government [1] - Musk condemned a proposed Congressional bill aimed at eliminating EV tax credits and cutting clean energy programs, labeling it a "disgusting abomination" [2] - President Trump retaliated by accusing Musk of being self-serving and reliant on federal aid, threatening to revoke Tesla and SpaceX's subsidies [3] Financial Impact - Following the public spat between Musk and Trump, Tesla's stock fell over 14% on June 5, resulting in a loss of more than $150 billion in market capitalization [4] - In Q1 2025, Tesla reported $595 million in regulatory credit revenue, which accounted for 145% of its net income of $409 million, indicating a growing reliance on these credits [5] - Tesla's increasing dependence on regulatory credits is evident, with credits making up 38.9% of net income in FY 2024, compared to just 11.9% in FY 2023 [5] Market Dynamics - The federal EV tax credit, which can reduce consumer purchase prices by up to $7,500, is crucial for Tesla's sales, especially as competition increases and vehicle prices rise [5] - Tesla's profitability is not solely driven by innovation but is also heavily influenced by government policies, making the company vulnerable to changes in Washington [6]