Musk Turns On Trump.Tesla Will Pay The Price

Group 1: Core Business Implications - The conflict between Elon Musk and President Trump poses significant risks for Tesla, particularly with the introduction of Trump's "Big, Beautiful Bill," which aims to eliminate the $7,500 federal EV credit by the end of 2025, making Tesla vehicles less economically accessible [2][3] - The proposed bill also seeks to abolish EV mandates and emissions standards that have been crucial for Tesla's profitability, with regulatory credits contributing over $8 billion to Tesla's revenue [3][4] - Tesla's stock experienced a 14% drop following the fallout between Musk and Trump, indicating market sensitivity to political developments [3] Group 2: Financial Support and Regulatory Environment - Musk's companies, including Tesla, have received at least $38 billion in public funding, with $6.3 billion committed in 2024 alone, highlighting Tesla's reliance on government support [4] - The initial funding for Tesla came from a $465 million low-interest loan from the Department of Energy in 2010, which was pivotal for the development of the Model S and the Fremont factory [4] - The ongoing conflict jeopardizes tax credits, infrastructure funding, and regulatory conditions that are essential for Tesla's market valuation [4] Group 3: Autonomous Vehicle Development - Trump's previous support for deregulation facilitated Tesla's advancements in Full Self-Driving (FSD) technology, but the rift with Musk may alter this favorable regulatory environment [5][6] - Tesla is currently under investigation by the NHTSA regarding its self-driving technology, which could lead to increased scrutiny and reduced political support for its autonomous vehicle initiatives [6] Group 4: Consumer Demographics and Market Demand - Musk's political shift and association with right-wing individuals have alienated Tesla's initial customer base, which was primarily liberal and environmentally focused [7] - The ongoing feud with Trump may further erode support from both the original liberal demographic and the newer conservative customers, potentially leading to significant demand challenges for Tesla in the U.S. market [7]