Key Stats for Tesla Stock
- Yesterday’s Price Change: -14%
- Current Share Price: $285
- 52-Week High: $488
- TSLA Stock Price Target: $299
What Happened?
Tesla (TSLA) shares plummeted 14% on Thursday, erasing $152 billion in market value as the ongoing feud between CEO Elon Musk and President Donald Trump escalated.
The dramatic selloff pushed Tesla’s market capitalization below the $1 trillion threshold to $916 billion, marking the largest single-day decline in its market cap ever.
The catalyst was Trump’s escalating threats to terminate government contracts with Musk’s companies after the Tesla CEO criticized the president’s tax and spending bill.
“The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts,” Trump wrote on Truth Social, calling Musk “CRAZY”. Trump also claimed he had asked Musk to leave his government advisory role.
Musk fired back defiantly, posting “Go ahead, make my day” and later suggesting he would begin decommissioning SpaceX’s Dragon spacecraft.
The public spat escalated when Musk declared, “Without me, Trump would have lost the election,” and even hinted at supporting Trump’s impeachment in favor of VP JD Vance.
The conflict centers on Musk’s vocal opposition to Trump’s budget bill, which would cut electric vehicle tax credits that have been crucial to Tesla’s US sales growth.
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What the Market Is Telling Us
The sell-off demonstrates how Tesla’s stock has become deeply intertwined with Musk’s political activities and personal brand.
Despite Tesla’s fundamental business being in the automotive sector, investors are pricing in political and regulatory risks stemming from Musk’s high-profile government role and volatile relationship with Trump.
The threat to government contracts is concerning, given that Musk’s SpaceX alone secured $3.8 billion in federal contracts in fiscal 2024, with over $20 billion in total government business since 2008.
Any disruption to these contracts could impact Musk’s ability to fund his various ventures, including potential investments in Tesla’s expansion.
Beyond the political drama, Tesla faces fundamental business challenges, including declining sales in Europe (down 15% in May), competition from cheaper Chinese EVs like BYD, and delays in launching its promised robotaxi service.
Further, the EV maker recently canceled its long-awaited $25,000 model, disappointing investors who expected it to drive mass-market adoption.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
