How the Musk-Trump Dispute Shakes Up the Market
Tesla’s stock experienced a steep decline of over 14% on Thursday, signaling a notable drop in investor trust amid escalating tensions between Elon Musk adn former President Donald Trump. Musk publicly condemned Trump’s signature policy bill on X, while Trump dismissed these critiques as mere signs of “Trump derangement syndrome.”
Stock volatility Amid Political Tensions
The electric vehicle leader closed trading at $284.70, reflecting a 14.2% decrease for the day-one of Tesla’s largest single-day losses since its 2010 IPO. According to FactSet data, this ranks as the company’s 11th biggest daily drop. Earlier in the session, shares had tumbled more than 17% before partially rebounding.
Musk’s Strong Rejection of Legislative Measures
starting Tuesday, Musk unleashed over a dozen posts on X denouncing Trump’s policy bill as “massive” and “outrageous,” criticizing it for excessive spending often referred to as “pork.” He also reproached lawmakers who backed the legislation, accusing them of knowingly making poor decisions.
A Clash Between Two Influential Figures
for the first time during this dispute, Musk directly confronted Trump by citing an old tweet from 2013 where Trump expressed embarrassment about Republicans raising the debt ceiling. In response,Trump acknowledged their previously positive relationship but questioned whether it coudl endure under current circumstances.
Investor Sentiment and Expert Perspectives
“The swift deterioration of what was once a pleasant dynamic between Musk and Trump is surprising,” commented Wedbush analyst Dan Ives.”This conflict introduces significant uncertainty into Tesla’s future outlook and unsettles shareholders regarding upcoming prospects.”
The Financial Impact on Elon Musk’s wealth
Musk has seen his net worth diminish by roughly $25.5 billion due to Tesla’s stock decline, lowering his estimated fortune to approximately $389 billion based on recent evaluations.
Tesla’s Momentum Before Market Setback
Just last month, Tesla enjoyed an notable rally with shares climbing nearly 22%. This surge coincided with Musk announcing plans to reduce his involvement with White House affairs while reaffirming his commitment to remain CEO for at least five more years.
The Pressure Mounts With Legislative Deadlines Approaching
Trump is urging Republican senators to approve his contentious policy bill before a July 4 deadline imposed by Senate leadership-a timeline that intensifies political friction amid growing divisions.
Tesla Faces Sales Headwinds in Key Global Markets
The stock downturn aligns with disappointing sales results across major regions including the U.K., Germany, Italy, and China during May. Notably, Tesla saw U.K. sales plunge over 45%, despite overall automotive sales there rising nearly 28%, underscoring fierce competition within critical markets.
A New Venture: Launching Austin Robotaxi Service
This June marks Tesla’s planned debut of an autonomous robotaxi fleet in Austin featuring around twenty self-driving Model Y vehicles-a bold initiative amid ongoing scrutiny surrounding its Full-Self Driving (FSD) technology safety record.The National Highway Traffic Safety Governance (NHTSA) continues multiple investigations into Autopilot-related incidents spanning nearly ten years including recent probes linked to fatal crashes involving FSD software.
Musk’s Autonomous Ambitions Face Regulatory Challenges
musk asserts that Tesla vehicles are capable of full autonomy when activated; though regulatory agencies stress that active driver supervision remains essential due to unresolved safety issues tied to current software capabilities.
Background Behind The political Rift between Titans
This public feud follows months after Musk briefly led government efficiency initiatives under Trump’s administration-a tenure both sides described as amicable upon conclusion-with expectations he would continue informally advising afterward.
Despite this understanding, White House officials have stated Trump’s position toward the legislation remains firm despite awareness of Musk’s opposition.
Simultaneously occurring analysts have criticized Elon for diverting too much attention away from Tesla toward political roles earlier this year-raising concerns about leadership stability during crucial growth phases.
Following Q1 earnings released in April showing mixed results but promising long-term potential-Musk indicated plans to focus considerably more energy back on guiding Tesla forward without fully stepping away from public service roles yet confirmed no immediate exit date from governmental duties.
