Core Viewpoint - Tesla's stock has recently been affected by political tensions between CEO Elon Musk and former President Donald Trump, leading to significant volatility in share prices, including a decline of over 5% ahead of a weak Q2 delivery report [1][9]. Group 1: Political Tensions - The conflict began when Musk criticized Trump's new tax bill, calling it a "disgusting abomination," which prompted Trump to label Musk as "crazy" and suggest a review of government subsidies for Tesla and SpaceX [2][3]. - Following Musk's continued criticism of the tax bill, Trump highlighted that Musk may receive more subsidies than anyone else and suggested that without them, Musk would have to shut down operations [3]. Group 2: Impact on Electric Vehicle (EV) Tax Credits - Trump's tax bill proposes the elimination of the $7,500 federal EV credit, which is crucial for making Tesla vehicles more affordable in the U.S. This change could negatively impact demand, which is already facing pressure from increasing competition [3][4]. - The bill includes a "special rule" that preserves tax credits for automakers that haven't sold 200,000 EVs by the end of 2025, which excludes Tesla, GM, and Ford, thereby favoring newer companies like Rivian and Lucid [5][9]. Group 3: Energy Incentives and Growth - Tesla's solar and battery storage units benefit from federal tax breaks, and the removal of these incentives could hinder growth in one of the company's fastest-expanding sectors [4][7]. - Without favorable policies and tax incentives, Tesla's ambitions in solar and battery storage may face significant challenges, impacting its growth strategy [6][7]. Group 4: Market Performance and Valuation - Year-to-date, Tesla shares have declined approximately 25%, while the industry has seen a 20% decline; in contrast, Ford's shares have increased by 14.6% and GM's have decreased by only 2.6% [10]. - Tesla's forward price-to-sales ratio stands at 9.18, significantly higher than the industry average, indicating a valuation concern, especially when compared to GM's 0.29 and Ford's 0.28 [11].