What To Know
- Musk, who briefly led DOGE in the early months of the Trump administration, resigned in May, citing a need to focus on Tesla’s core operations and future technologies such as robotaxis.
- ” The billionaire, who once campaigned with Trump in 2024, has shifted sharply in tone, recently suggesting the need for a new political party that “actually cares about the people.
International Business News: A Fallout That’s Rattling the Markets
Tesla’s share price plunged by over 5% in early trading Tuesday as the long-simmering feud between President Donald Trump and tech billionaire Elon Musk reignited with new intensity. Once political allies, the two powerhouses have now found themselves on opposite ends of a bitter and increasingly public confrontation centered on federal subsidies and political betrayal.
Tesla’s share price plunges due to the feud between Trump and Musk
Image Credit: Digital Emeralds
This International Business News report comes amid growing investor anxiety after Trump took to his Truth Social platform to declare that the Department of Government Efficiency (DOGE) should thoroughly review the vast subsidies supporting Musk’s empire. The former president accused Musk of receiving more government funding than any individual in history, warning that without these funds, operations like Tesla, SpaceX, and Starlink might not survive.
Trump Calls for Clampdown on Musk’s Government Support
In a blistering late-night post, Trump wrote, “Elon may get more subsidy than any human being in history, by far, and without subsidies, Elon would probably have to close up shop and head back home to South Africa. No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE. Perhaps we should have DOGE take a good, hard, look at this? BIG MONEY TO BE SAVED!!!”
Musk, who briefly led DOGE in the early months of the Trump administration, resigned in May, citing a need to focus on Tesla’s core operations and future technologies such as robotaxis. However, his recent public criticism of Trump’s “One Big Beautiful Bill,” a sweeping tax and spending proposal, has once again triggered tensions. The bill would eliminate key subsidies like the $7,500 tax credit for electric vehicles—a move that directly threatens Tesla’s sales model.
A Political and Financial Powder Keg
During a White House briefing on Tuesday, Trump doubled down. “He’s upset that he’s losing his EV mandate,” the president told reporters. “But he can lose a lot more than that. We might have to put DOGE on Elon. DOGE is the monster that might have to go back and eat Elon.”
Musk responded tersely on X, his social media platform, posting, “I am literally saying CUT IT ALL. Now.” The billionaire, who once campaigned with Trump in 2024, has shifted sharply in tone, recently suggesting the need for a new political party that “actually cares about the people.”
Wedbush Tries to Calm the Storm but Market Reacts Sharply
Despite the dramatic headlines, analysts at Wedbush are maintaining their outperform rating on Tesla stock with a $500 price target. Led by Dan Ives, the firm cautioned that the feud is weighing on investor sentiment but predicted a truce may be inevitable. “Musk needs Trump and Trump needs Musk, especially in the context of the ongoing AI arms race with China,” the note read.
Still, Tesla’s stock performance reflects deepening concerns. After losing more than 20% of its value earlier this year, the latest political spat has wiped another 5% off its market cap. During the feud’s initial blow-up in early June, Tesla stock plunged 14% in a single day, erasing over $150 billion in value.
Tesla Faces Internal and Global Sales Pressures
In the midst of this chaos, Elon Musk has reportedly assumed direct control of U.S. and European sales at Tesla following the quiet exit of senior executive Omead Afshar. The company is also facing international headwinds, with global EV sales slowing and competition from Chinese automakers intensifying.
Adding to the pressure, Tesla’s latest sales figures are due Wednesday. Analysts and investors alike are watching closely to see if the fallout from the Trump-Musk war of words is beginning to translate into concrete losses in consumer demand.
The situation illustrates the fragility of business-political alliances, especially when built on shifting agendas and enormous public personalities. What started as a collaborative effort to reshape American industry through electric vehicles and space innovation now threatens to devolve into a financial and regulatory disaster for both parties.
With Trump targeting subsidies and Musk lashing out at both political sides, the rift may lead to a realignment of business and political loyalties in the coming months. Tesla’s future, along with its massive federal funding lifeline, hangs in the balance.
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