Shares in Elon Musk’s Tesla have seen a significant reversal due to renewed concerns about his focus on the company’s recovery while also being at odds with Donald Trump. The electric car company’s shares plummeted by over 7% at the opening of Wall Street trading, wiping out approximately $71 billion (£52 billion) from its market value.
The stock has been under pressure ever since Musk aligned himself with the president, particularly in his efforts to reduce government expenses through the establishment of the Department of Government Efficiency, also known as DOGE. However, the stock is now suffering as their political relationship has deteriorated.
Musk has been vocal in his opposition to Mr. Trump’s major tax cut and spending plans, commonly referred to as the «big, beautiful bill,» ever since he resigned from his DOGE position. Musk expressed his concerns about the bill’s excessive spending, which significantly raised the debt ceiling, leading him to criticize the political landscape as a one-party system dominated by what he calls the «PORKY PIG PARTY.»
Following the bill’s approval, Musk conducted a poll on X, asking individuals if they supported the launch of the America Party. The results showed a 65.4% majority in favor of creating the new political party, leading to the formal announcement of the America Party the next day. Musk emphasized the need for a new party to combat the alleged wastefulness and corruption in the current political system.
In response to Musk’s actions, Trump expressed disappointment with Musk’s recent behavior, referring to him as a «TRAIN WRECK» for wanting to establish a Third Political Party. Trump also criticized the feasibility of such a party succeeding in the United States.
Trump has previously threatened to target Tesla’s government subsidies and contracts through the DOGE department as tensions between the two escalated. These threats have had a negative impact on Tesla’s share price, which has been on a downward trend since late last year following Trump’s reelection.
The ongoing trade war, coupled with tariff disruptions and backlash from consumers and investors over Musk’s involvement in DOGE, have contributed to a 35% decline from the peak in December. The absence of Tesla’s CEO has further weighed on the company’s shares, with global sales suffering as a result of trade tensions and tariff impositions by a government Musk previously supported.
Despite these challenges, Musk has recently refocused his attention on Tesla and other business ventures. However, investors remain concerned about the potential impact of Trump’s actions on subsidies and Musk’s distractions from Tesla’s operations.
In conclusion, Tesla’s share price woes are a result of various factors, including political tensions, tariff disputes, and concerns about Musk’s involvement in government affairs. Investors are closely monitoring the situation amid uncertainties surrounding subsidies and Musk’s commitment to the company’s success.
SOURCE