Tesla shares drop on Musk, Trump feud ahead of Q2 deliveries

Group 1: Tesla's Stock Performance and Market Expectations - Tesla shares have decreased by 7% from $323.63 to $300.71 ahead of the second-quarter deliveries report [1] - Analysts expect Tesla to report deliveries of approximately 387,000, reflecting a 13% decline from nearly 444,000 a year ago [2] - Prediction market Kalshi forecasts deliveries around 364,000, indicating lower expectations from traders [2] Group 2: Legislative Impact on Tesla - The One Big Beautiful Bill Act, which President Trump supports, is expected to negatively impact Tesla by cutting support for renewable energy and phasing out EV tax credits [4][5] - These legislative changes could reduce EV sales by about 100,000 vehicles annually by 2035, according to Energy Innovation [5] - The bill is projected to decrease renewable energy development by over 350 cumulative gigawatts, potentially affecting Tesla's Energy division [6] Group 3: Financial Implications and Regulatory Credits - Tesla has generated $11.8 billion in sales from automotive regulatory credits since 2015, which significantly contribute to its net income [8][9] - Regulatory credit sales accounted for approximately 60% of Tesla's net income in the second quarter of 2024, highlighting the importance of these incentives [9] - The company relies on federal and state regulations that mandate automakers to sell low-emission vehicles or purchase credits from Tesla [9]