Tesla Stock Plummets After Musk Warns of 'Tough' Times Under Trump Policies

Tesla (TSLA) shares experienced a significant drop after CEO Elon Musk warned that former U.S. President Donald Trump's policies would bring “tough” times for the company, despite Trump stating he wants the Musk-led company to “thrive.” The electric vehicle manufacturer's stock fell 8% on Thursday, bringing the cumulative decline to 37% from its mid-December peak, eroding over $500 billion in market capitalization. The stock hit its lowest level since May 2023.

Impact of Policies on Tesla's Profits

On Wednesday evening, Tesla revealed that its second-quarter profits had fallen by more than a fifth due to slowing car sales. Musk indicated that Trump’s trade war and policies against electric vehicles and solar energy would further impact the company's earnings. “We’re in a weird transition period where the U.S. will lose a lot of incentives,” Musk stated on Wednesday. “The next few quarters are going to be quite difficult.” Musk is referring to the end of federal tax credits for electric vehicles.

Trump Denies Targeting Tesla

Trump denied retaliating against Musk after intense political disagreements. He posted on “Truth Social” that he wants “all companies in the USA to thrive, and, in fact, thrive like never before!” Trump added, “Everyone is saying I would destroy his [Musk's] company by terminating some (or all!) of the massive subsidies he gets from the U.S. Government, (but) that is not true!”

Musk's Relationship with Trump

Musk had contributed over $250 million to Trump’s campaign last year and led the formation of the so-called “Department of Government Efficiency” (DOGE). His close ties to Trump were initially seen as beneficial for Tesla but ultimately alienated many left-leaning customers. However, the relationship later soured into public disagreements.

Tesla's Future: Challenges and Opportunities

The electric vehicle sector faces numerous challenges, including increasing competition, rising raw material costs, and declining government incentives. However, there are also significant opportunities for growth, particularly in the field of self-driving technology and robotics. Tesla's ability to overcome these challenges and capitalize on these opportunities is crucial for its future success.

Conclusion

Tesla's stock is experiencing significant volatility, and the company is heavily influenced by government policies and political relationships. However, Tesla remains at the forefront of innovation in electric vehicles and technology, and its future depends on its ability to adapt to changing circumstances.

Risk Warning and Disclaimer: This article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform. Trading Contracts for Difference (CFDs) involves high leverage and significant risks. Before making any trading decisions, we recommend consulting a professional financial advisor to assess your financial situation and risk tolerance. Any trading decisions based on this article are at your own risk.

Tin moi

N/A

Thứ sáu, 25 Tháng bảy 2025

Indices

ECB Rate Cut Expectations Revised Amid Economic Resilience

N/A

Thứ sáu, 25 Tháng bảy 2025

Indices

Hedge Funds Advise Buying Protection Against Potential Stock Market Downturn

N/A

Thứ sáu, 25 Tháng bảy 2025

Indices

Federal Funds Rate vs. SOFR: Liquidity Measurement Debate in US Financial System

N/A

Thứ sáu, 25 Tháng bảy 2025

Indices

Musk Praises Tesla Autopilot Performance in China Test, Sparking Debate