Tesla’s shares have dropped 16% since CEO Elon Musk criticized President Donald Trump’s spending bill last week, marking a 33% decline since Inauguration Day. This downturn began after Musk exited his role as head of Trump’s Department of Government Efficiency, citing a need to refocus on his businesses, including Tesla, SpaceX, Neuralink, and X. The relationship between Musk and Trump has soured, with Musk labeling the GOP’s spending bill a “disgusting abomination” and expressing disappointment that an electric vehicle tax credit was excluded from the legislation, which is projected to add $2.4 trillion to the national debt over the next decade.
Despite previously trying to support Tesla, Trump has now threatened to cut Musk’s government subsidies in response to the CEO’s critical posts. The tumultuous exchange intensified on social media, with Musk denouncing the spending bill while also rebuffing Trump’s claims of having prior knowledge about it.
Trump accused Musk of lacking integrity for his sudden opposition to the bill that would impact EV incentives, asserting that Musk was aware of its details in advance. In retaliation, Musk defended himself, asserting that he had never seen the bill and was blindsided by its rapid passage.
According to tech analysts like Dan Ives, the stock decline isn’t merely due to the electric vehicle tax credit issue but reflects broader concerns regarding regulatory scrutiny now that Musk’s relationship with Trump has deteriorated. Musk’s social media posts also highlighted his dissatisfaction, suggesting a sense of ungratefulness from Trump despite his previous support. Meanwhile, Trump’s media company shares have also decreased significantly, indicating challenges on both sides of this escalating feud.
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