Elon Musk vs. Trump Feud Sends Tesla Stock Reeling: What It Means for Investors in 2025
Tesla shares nosedive 14% amid a fiery Musk-Trump clash, raising fresh fears for Tesla’s future as EV tax incentives hang in the balance.
- Tesla stock sank 14% in a single day after the feud broke out.
- EV tax credits worth $7,500 per car set to expire at 2024’s end.
- Major investors warn Tesla’s “Elon premium” could be gone for good.
- Robotaxi and AI hype failed to cushion the blow.
On a volatile Thursday, Tesla shares plummeted by a jaw-dropping 14%, leaving investors and Wall Street insiders reeling. The catalyst? An explosive social media showdown between Tesla’s CEO, Elon Musk, and former President Donald Trump.
What started as digital banter rapidly escalated into a full-blown feud—prompting experts like Ross Gerber of Gerber Kawasaki Wealth & Investment Management to call it a “disaster of epic proportions” for Tesla and its future. The public spat has raised fiery new questions: Can Tesla survive without Musk’s political clout? And will the coming expiration of EV tax credits deal a fatal blow to sales?
Why Did Tesla’s Stock Crash So Hard?
The crux of the selloff centers on what many call the “Elon premium.” For years, investors have paid a hefty extra for Tesla’s shares based on Musk’s influence and perceived proximity to political powerhouses in Washington. Now, that advantage is falling apart.
As Musk trades barbs with Trump—arguably one of the most powerful figures in US politics—market perception around Tesla has soured rapidly. Investors worry that government support for Tesla’s projects, including SpaceX launches and full self-driving approvals, could become political collateral damage.
Q&A: What Does the Musk-Trump Feud Mean for Tesla Investors in 2025?
Q: Was the dramatic 14% drop justified?
Market watchers say the slide is only the beginning. Tesla’s value, they argue, has long rested more on Musk’s persona than on pure business fundamentals. Now, with optimism waning, stock price targets are sliding below $200—a stark contrast to the highs of the past two years.
Q: Could this hurt Tesla’s government partnerships?
Absolutely. With EV tax credits expiring at the end of 2024, there’s real concern over a sharp decline in US sales. Without these $7,500 incentives, analysts predict fewer Tesla vehicles will move off the lot, stalling the company’s already slowing momentum.
Q: How are major investors reacting?
Large stakeholders, like Ross Gerber’s firm, have already slashed their Tesla holdings by up to 60% since 2021. After Thursday’s plunge, institutional investors are calling for stricter oversight from Tesla’s board—and even hinting at potential lawsuits over what they call “utter and complete negligence.”
How Will Tesla Compete as Robotaxi and AI Hopes Waver?
Despite splashy announcements about robotaxis and AI ventures, Tesla still makes nearly all its money from selling electric vehicles and related products. The vision of transforming into a full-stack AI company has yet to materialize. And with government relations now in jeopardy, initiatives like AI integration and self-driving approvals face an uncertain path.
How Can Tesla Rebuild Investor Trust Amid Turmoil?
To calm a jittery market, Tesla needs more than Musk’s charisma. Investors want solid strategies—expanding battery storage, innovating in charging networks, and solving critical Full Self Driving hardware issues. Transparency from the board and fresh leadership could be crucial to a new era.
Will Lawsuits and Board Shakeups Follow?
Calls for legal action are growing. Shareholders are urging pension funds and institutional investors to demand accountability from Tesla’s board for letting this crisis snowball.
For now, many are simply trimming their exposure—waiting to see if Tesla can reinvent itself for the coming regulatory and competitive landscape.
Tesla’s Next 90 Days: What Should Investors Do Now?
- Monitor Tesla’s Q2 and Q3 earnings and delivery figures closely.
- Watch for updates on federal EV incentives and potential extensions.
- Stay alert for further Musk-Trump developments—policy retaliation could accelerate.
- Evaluate your exposure; consider diversifying until Tesla finds steady ground.
Keep your finger on the pulse: The Tesla rollercoaster is far from over. Review your portfolio strategy, stay objective, and be ready to act as the Musk-Trump saga rewrites the EV investment map in 2025.