Tesla Global News #30

Tesla Stock Plummets After Musk-Trump Feud

Tesla’s stock experienced a dramatic 14.2% drop on Thursday, June 5, 2025, erasing over $380 billion in market value and marking the company’s 11th-worst trading day since its 2010 IPO. The sharp decline was triggered by a public feud between Tesla CEO Elon Musk and President Donald Trump, sparked by Musk’s vocal criticism of Trump’s tax and spending bill, which includes phasing out the $7,500 electric vehicle (EV) tax credit by December 2025. Trump retaliated with threats to cut government contracts for Musk’s companies, including Tesla and SpaceX, intensifying investor concerns about regulatory risks.

The conflict, described by Wedbush analyst Dan Ives as a “high school friends feud,” has raised fears of a tougher regulatory environment for Tesla, particularly for its autonomous driving ambitions. The loss of EV tax credits could increase Tesla vehicle prices, potentially reducing demand, with JPMorgan estimating a $1.2 billion annual profit hit. Despite a partial recovery of nearly 4% on Friday, Tesla’s stock remains down 30% year-to-date, making it the worst-performing large-cap stock of 2025.

What It Means for Investors and Consumers: The Musk-Trump spat highlights Tesla’s vulnerability to political shifts, especially as Musk’s high-profile persona influences the brand. Investors are now closely monitoring whether the feud cools, with signs of détente reported by Politico on Friday. For consumers, the potential loss of EV tax credits could make Tesla’s vehicles, like the Model Y, less affordable, with effective price increases of up to $7,500. As Tesla navigates this turbulence, its upcoming robotaxi launch in Austin could shift focus back to innovation—if it delivers.

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