The public dispute between Donald Trump and Elon Musk has become a topic with real financial impact. It affects not only the stock price but also the future of contracts, incentives, and regulation in key sectors.
- Market Shakeup: Sharp Drop in Tesla
Tesla shares plunge 14.3% in one day, losing nearly $150 billion in market value.
This setback coincides with Trump’s threats to cancel federal contracts and eliminate the $7,500 tax credit for electric vehicles, which could cut approximately $1.2 billion annually in margins. - Recovery Moves: Optimism and Volatility
The next day, shares recovered 5% in pre-market trading after news surfaced that Trump and Musk might talk, although the call never materialized.
Analysts note that despite Tesla’s valuation of about 120× expected earnings, the political turbulence highlights how sensitive investor confidence is to these risks. - Regulation, Subsidies, and Geopolitical Risk
CNBC reports that Trump also plans to impose new tariffs and regulatory rollbacks, adding pressure on Tesla in international markets.
Additionally, agencies like the NHTSA are investigating the “Full Self-Driving” system after a fatal accident. A hostile government stance could result in costly demands, such as adding lidar sensors.
- Financial and Brand Implications
The cancellation of contracts (NASA, defense) and subsidy cuts directly affect Tesla’s and SpaceX’s future liquidity and valuation, threatening over $22 billion.
Moreover, the CEO’s pro-Trump stance has sparked disapproval among some consumers and triggered protests like the Tesla Takedown movement.
- Systemic Risk and Medium-Term Strategy
Musk faces a polarized reputation, which could harm both his future projects (robotaxis, AI) and opportunities for public financing or key partnerships.
In this environment, market reactions suggest that even mild political tensions can strongly affect business valuation and predictability.
The clash between Trump and Musk reflects how political issues can become high-impact financial events. The $150 billion loss in Tesla’s value, along with the risk of losing subsidies, contracts, and facing hostile regulation, shows why clean technology and energy companies must manage not only innovation and sales but also their relationship with political and regulatory power.
