Elon Musk's criticism of Trump caused Tesla stock to plummet 14%

From Yahoo Finance: 2025-06-23 11:27:00

Tesla stock plummeted 14% on June 5, wiping out $150 billion amid Elon Musk’s criticism of President Trump’s proposed tax and spending bill affecting EV subsidies. The bill could cut tax credits and scrap emission rules, sparking a heated exchange between Musk and POTUS over the national deficit.

In retaliation, Trump threatened to cut federal contracts with Musk’s companies, including Tesla and SpaceX, to save government money. Despite the feud, Tesla stock rebounded 5% the next day amid reports of a potential de-escalation, though the White House denied any scheduled call between the two.

Analysts caution about long-term implications as Musk’s companies may face regulatory hurdles with the federal government, especially for innovations like driverless robotaxis. While Tesla shows investment potential, some AI stocks may offer higher returns with lower risk, particularly amid ongoing trade tensions and onshoring trends.

Read more: Musk’s Trump Tirade Tanked Stock, Recovery Hinted at Damage Control