Tesla has begun to climb back after a brutal $152 billion market value wipeout triggered by a public fallout between Elon Musk and former President Donald Trump. But while investors are breathing a little easier, some are asking: is the worst yet to come?
Tesla Climbs After Brutal $152B Selloff
| Takeaway | Stat |
|---|---|
| Tesla’s market value lost in the selloff | $152 billion |
| Stock rebound after feud headlines | +4% |
| Robotaxi rollout resilience | Analysts remain optimistic |
This isn’t Tesla’s first political storm, and it probably won’t be its last. But the company’s core strengths—its tech, its brand, and its scale—remain solid.
The Trump-Musk spat is headline-worthy, but whether it can derail a trillion-dollar juggernaut is another question entirely. As a longtime auto tech reporter, I wouldn’t bet against Elon. But I’d keep a close eye on Capitol Hill.
Why the Market Panicked
When Trump lashed out at Musk over his criticism of the GOP’s latest “tax-and-spend” bill—which cuts EV credits—the markets reacted immediately. Tesla lost over $152 billion in value within days. Musk called the bill a “deficit nightmare,” and Trump fired back by saying the relationship was “over.”
He didn’t stop there. Trump warned of “very serious consequences” for Tesla and SpaceX, including threats to government contracts and subsidies.
As someone who has covered Tesla for over a decade, I’ve seen the stock move sharply on less provocation. But this clash had bite: it put Tesla in political crosshairs just as it gears up for a major robotaxi launch.
Musk Responds: Strategic or Stubborn?
Musk has since tempered his tone, signaling he’s not looking to escalate. It’s a calculated move, analysts say, to keep Tesla insulated from government backlash.
According to ARK Invest’s Cathie Wood, Musk’s pivot is more tactical than political. “He knows Tesla’s growth leans on a good regulatory climate,” she said in a recent webcast.
What Wall Street Thinks
Analysts remain divided on whether this feud has long-term consequences:
- Short-Term: Tesla could see more volatility, especially if the feud flares up again.
- Medium-Term: Most of Tesla’s AI and robotaxi tech doesn’t need direct GOP backing.
- Long-Term: Innovation and global demand will matter more than politics.
Adam Jonas from Morgan Stanley told clients the robotaxi rollout, especially in Austin, could become “an inflection point” for the company that offsets political drag.
Will GOP Policy Hurt Tesla?
The GOP’s revised budget trims federal EV tax credits—a big deal for Tesla, which leans on these incentives. Trump has also hinted at reviewing federal contracts tied to SpaceX.
But Tesla has fans on both sides of the aisle. In fact, several red states house Tesla factories or battery plants. Canceling federal support could backfire politically for Trump.
What Happens Next?
There are three ways this could go:
1. They Patch Things Up
Not likely in the short run, but possible if business interests prevail.
2. Continued Tension, Little Impact
Feud simmers but doesn’t hit Tesla’s core. That’s the consensus on Wall Street.
3. A Prolonged Battle
If Trump regains the presidency and pursues retaliatory policies, Tesla could face real hurdles.
