As the spat between Trump and Tesla CEO Elon Musk resurfaced over the weekend, Tesla’s stock fell 8% at the opening bell on Monday.
In protest of the Republican spending plan that was passed late last week, Musk, a former Trump buddy and major donor, declared that he was launching a third political party. The law has drawn harsh criticism from Musk, who claimed it would stifle emerging companies and eliminate employment.
Trump said in a social media post on Sunday that the billionaire who owns SpaceX, Tesla, and X has lost his mind in recent weeks.
Investors worry that if Musk’s conflict with Trump worsens, his businesses, which rely heavily on governmental subsidies, may suffer even more.
“With the autonomous future ahead and the AI Revolution in full force, Musk/Tesla do not need to keep poking the bear as Trump can create more hurdles for Musk/Tesla/SpaceX over the coming years if this political battle gets nastier heading into mid-terms in 2026,” Wedbush Securities analyst Dan Ives wrote in a note to clients late Sunday.
Since Musk fully backed Trump in the lead-up to last year’s election, Tesla shares have been incredibly volatile. The company is now facing an increasing backlash due to Musk’s involvement in the Trump administration and his support of right-wing ideology.
In both Europe and the United States, shares have plummeted. According to industry observers, Musk’s ties to Trump and far-right groups like the German AfD are largely to blame for that decline. However, Tesla is up against more competition everywhere, especially in China.
Approximately 40% of the value of Tesla shares has been lost since they peaked on December 17 at $479.76. Since Thursday’s close, Tesla’s stock has dropped around $26 per share to $289.75.
