Investor Panic as Tesla Shares Drop 14% Following Trump’s Threats Against Musk’s Businesses
Tesla’s $150 Billion Stock Crash: How the Musk-Trump Feud Shook Wall Street
Tesla’s stock price took a dramatic hit, plunging 14% and wiping out $150 billion in market value. The sharp decline followed an escalating dispute between CEO Elon Musk and U.S. President Donald Trump, who suggested terminating Musk’s government subsidies and contracts. Investors, once bullish on Tesla due to Musk’s close ties with Trump, reacted swiftly, dumping shares amid uncertainty over the company’s future.
The fallout stems from Musk’s criticism of Trump’s budget bill, which he called a “disgusting abomination.” Trump retaliated by questioning Musk’s influence and hinting at regulatory actions against Tesla and SpaceX. The market’s response was immediate, with Tesla’s valuation dropping below the $1 trillion mark.
The timing of the crash is particularly concerning for Tesla, as the company is preparing to launch its autonomous robotaxi service. Analysts worry that Trump’s stance on autonomous vehicles could slow regulatory approvals, further impacting Tesla’s growth trajectory.
Investor Confidence Shaken: What’s Next for Tesla?
Tesla’s stock crash has raised concerns about the company’s ability to navigate political and regulatory challenges. The electric vehicle giant has been relying on government contracts to support its expansion, particularly in the autonomous driving sector.
Trump’s remarks on Truth Social, where he suggested cutting Musk’s federal support, have fueled speculation about potential policy shifts. If Tesla loses government backing, it could face hurdles in scaling its robotaxi operations and maintaining its competitive edge in the EV market.
Despite turmoil, some analysts believe Tesla’s long-term prospects remain strong. The company’s innovation in AI-driven transportation and its global expansion efforts could help it recover from the current setback. However, investor sentiment will likely remain volatile as the Musk-Trump feud continues to unfold.
SpaceX Under Fire: Trump’s Threats Extend Beyond Tesla
While Tesla’s stock crash has dominated headlines, Musk’s aerospace company, SpaceX, is also facing potential repercussions. Trump’s comments about terminating government contracts could impact SpaceX’s NASA-funded missions, including astronaut transport and lunar exploration.
SpaceX has been a key player in the U.S. space industry, securing billions in funding for critical projects. The company’s satellite division, Starlink, has also benefited from Musk’s previous ties with Trump, gaining approvals for international expansion.
If Trump follows through on his threats, SpaceX could experience funding cuts, delaying key missions and affecting its valuation. Investors are closely watching how Musk navigates this political storm and whether SpaceX can maintain its trajectory despite the uncertainty.
Tesla’s Robotaxi Ambitions: Will Politics Derail Innovation?
Tesla’s plans to launch a driverless robotaxi service in Austin, Texas, have been a major focus for investors. The company aims to deploy autonomous vehicles in multiple cities next year, positioning itself as a leader in AI-driven transportation.
However, Trump’s stance on autonomous vehicles has raised concerns about regulatory roadblocks. Analysts fear that heightened scrutiny could delay Tesla’s rollout, impacting its revenue projections and market positioning.
Despite these challenges, Musk remains committed to advancing Tesla’s autonomous technology. The company’s AI-driven approach and extensive data collection efforts could help it overcome regulatory hurdles. However, investor confidence will depend on how Tesla manages political risks and maintains its innovation momentum.
Market Reaction: Tesla’s Worst Day in Months
Tesla’s 14% stock drop marks one of its worst trading days in recent months. The decline erased gains from the past eight weeks, during which Tesla’s stock surged following Musk’s robotaxi announcement.
The market’s response highlights the impact of political uncertainty on Tesla’s valuation. Investors are reassessing their positions, weighing the risks associated with Musk’s feud with Trump.
While Tesla has weathered volatility in the past, the current situation presents unique challenges. The company’s ability to stabilize its stock price will depend on its strategic decisions and how it addresses investor concerns.
