Tesla stock drops 6% due to Trump-Musk feud and subsidy threats
From Financial Modeling Prep: 2025-07-02 06:32:00
Tesla Inc. (NASDAQ:TSLA) shares dropped over 6% due to tensions between Elon Musk and President Trump, who threatened subsidy cuts for Musk’s companies. Trump criticized Musk for receiving excessive subsidies and hinted at revoking federal support for EVs and rockets. Musk responded by calling for all subsidies to be cut.
The feud between Trump and Musk escalates as Trump threatens to scrutinize taxpayer funding for SpaceX and Tesla. Investors are concerned about regulatory and subsidy risks impacting Tesla’s valuation and stock performance. The uncertainty in policy landscape and high exposure to federal incentives make Tesla vulnerable to political volatility.
Investors are closely monitoring Tesla’s upcoming Q2 delivery numbers amid competition in China and U.S. policy risks. Analysts differ on the impact of the Trump-Musk feud, with some warning of potential consequences on Tesla’s subsidies, partnerships, and regulatory approvals. The future of Tesla’s subsidies and partnerships is crucial, especially in sectors like autonomous driving.
Tesla’s stock drop highlights the increasing influence of politics on its performance. With delivery numbers pending and subsidy policies in flux, investors face a complex risk environment. The intersection of politics and performance is evident as Tesla navigates through changing political conditions and high-profile feuds with the White House.
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