Just as Tesla was starting to bounce back after months of intense scrutiny, fueled mainly by Elon Musk’s deepening involvement in politics, another storm has hit. And this time, it’s personal. Musk took a jab at Donald Trump, and surprise, surprise: Tesla’s stock took a hit, subsequently impacting the S&P 500 and Nasdaq.
In short, Musk publicly criticized a Trump-backed budget proposal, calling it a “disgusting abomination.” He warned that the bill would balloon the national deficit and plunge the American people into “devastating” debt. In addition, the plan slashes subsidies for electric vehicles, striking at the core of Tesla's business model.
What followed was a sharp exchange of insults between Trump and Musk on their respective social media platforms, Truth Social and X. The tone was far from diplomatic, and Tesla stock took a big hit again — on Thursday, the stock plunged about 14.3%, wiping out more than $150 billion in market value.
Feeling he might have taken things too far, Musk began to backpedal. He called for “cooler heads to prevail” and even backtracked on his stance to halt the use of SpaceX's Dragon spacecraft. The message can be translated as he doesn't want to pick a fight with the president, which could end badly.
Either way, investors seemed to appreciate the shift. Tesla shares have started to bounce back, helped by Trump praising Musk and reassuring the public that he’s not planning to ditch his Tesla or Starlink setups at the White House, along with wishing Musk “the best.” Damage control, it seems, is in full swing — on both sides.
So, will Tesla stock keep going up?
If this narcissistic confrontation is reignited, Tesla could become collateral damage. For now, Musk's retreat from open political lobbying offers a glimmer of hope. There may even be behind-the-scenes negotiations to save electric vehicle tax credits in the federal budget, a lifeline for Tesla.
Without that support, the company could lose between $1.2 and $2 billion. In 2024, Tesla made $2.76 billion from regulatory credits and $595 million in the first quarter of 2025. That same quarter, it only reported $420 million in net income, meaning it wouldn’t have been profitable without those credits.
And that's not all. Musk's robotaxi ambitions — a bold bid for a slice of a projected $1 trillion market - could draw even more political fire if the dispute escalates. It's worth noting that Tesla has promised to launch its robotaxi service this month, and June 12 could be D-Day - let's see how things progress now.
