Tesla shares slump in early trading once again. This time, the drop came after a public clash between Elon Musk and Donald Trump. The two well-known figures have had disagreements in the past. Their latest dispute appears to have shaken some investors.
In this blog post, we’ll cover what happened, how the stock reacted, and what this could mean going forward.
Tesla Shares Slump in Early Trading
Tesla shares slump by nearly 5% shortly after the market opened. This came just hours after Elon Musk made strong comments about government policy. His post targeted a spending bill supported by Trump and his team.
The dip in Tesla stock was quick and sharp. Some traders reacted immediately. By mid-morning, Tesla had lost billions in market value.
Shares opened around $298. By 11 a.m., the price dropped to near $293. The trading volume also surged as news spread.
The Musk-Trump Dispute Rekindled
Elon Musk used his platform, X (formerly Twitter), to post about a bill he opposes. The bill offers fewer subsidies for electric vehicles. Trump has backed the bill, saying it cuts wasteful spending.
Musk called the bill “bad for innovation” and “a blow to American business.” He didn’t name Trump directly, but the connection was clear.
Soon after, Trump responded on Truth Social. He accused Musk of “crying about government handouts” and warned that “subsidies aren’t forever.”
This back-and-forth was covered widely. News outlets picked up the story quickly. Investors noticed.
Tesla Shares Slump: What’s Behind the Drop?
When Tesla shares slump, it’s often due to more than one thing. In this case, the Musk-Trump feud is just part of the story.
Investors may be worried about:
- Policy changes that could reduce tax credits for electric vehicles.
- Public tension between Musk and politicians who may influence those policies.
- Broader market uncertainty.
Many investors follow Musk closely. He’s not just the CEO of Tesla—he’s a major voice in the tech and business space. His words can move markets.
What Analysts Are Saying
Some market analysts say the Tesla shares slump is short-term. Others warn that continued political tension could lead to longer-term issues.
Dan Ives from Wedbush Securities said the feud is “a distraction.” He still believes in Tesla’s business model but notes the stock may stay volatile.
Other analysts point to slowing sales, rising competition, and internal shifts at Tesla. All these factors may play a role in the recent price drop.
Still, many firms keep a “buy” or “outperform” rating on the stock.
A Look at Tesla’s Recent Performance
The Tesla shares slump is not the first in 2025. Earlier this year, Tesla reported a 13% drop in deliveries. Profits also fell by more than 70% compared to the same time last year.
The company has faced supply chain issues, labor challenges, and price cuts. It also faces growing competition in the electric vehicle space.
Companies like BYD and Rivian are moving quickly. Some offer cheaper cars with similar features.
Musk has also made big bets on self-driving software and robotics. But these projects take time and money, which adds pressure to the business.
Political Tensions and Business Impact
The clash between Elon Musk and Donald Trump adds a new twist. It’s not just a war of words. If the government changes rules on EV support, that could affect Tesla’s profits.
Some government deals, tax credits, or federal contracts could be reviewed. Even if that doesn’t happen, the talk alone can affect investor mood.
This isn’t the first time Tesla and politics have mixed. In the past, Musk has disagreed with both parties on different issues.
But a direct back-and-forth between Musk and Trump brings national attention. That makes some investors nervous.
What Should Investors Watch Next?
There are a few key things to watch:
- Quarterly results: Tesla will report its next earnings soon. Investors want to see improvement in sales and profits.
- EV policy news: Any changes in tax credits or EV support could affect Tesla.
- Public messaging: Both Musk and Trump speak often. Any new posts could move the stock again.
For now, many investors will wait and watch. Some may see the slump as a buying chance. Others may stay cautious.
Final Thoughts
Tesla shares slump after a new round of public words between Elon Musk and Donald Trump. It’s not the first time they’ve clashed. It may not be the last.
The drop in share price reflects market concern about policy, politics, and public image. But it also connects to deeper issues—sales, profit margins, and global competition.
Investors should focus on long-term facts, not just headlines. The business is strong, but it faces real tests.
As always, anyone buying stocks should do research and think about risk. Tesla remains a major name in the EV space—but the road ahead may have bumps.
