Just hours after the U.S. Senate narrowly approved President Trump’s new tax-and-spending bill, Tesla stock nosedived amid an explosive public feud between Trump and Elon Musk. What started as a political win quickly turned into a Wall Street drama that cost Tesla billions in market cap and stirred fears about the future of clean energy incentives.
Senate Passes Tax Bill
| Takeaway | Stat |
|---|---|
| Tesla stock dropped following Trump’s comments | −7% intraday decline |
| National debt impact of tax bill | ~$3.3 trillion |
| Potential loss from EV tax credit repeal | ~$1.2 billion/year |
As someone who’s covered auto-tech for over a decade, I’ve seen policy shifts rattle companies before. But this is different. Trump and Musk aren’t just CEOs and politicians—they’re cultural lightning rods. Their clash puts Tesla’s future subsidies, investor confidence, and even executive bandwidth on the line.
Meanwhile, the average EV buyer just wants affordable options. Without the $7,500 credit, the sticker shock could steer folks right back to gas-powered cars.
A Razor-Thin Win in the Senate
On July 1, the Senate passed President Trump’s “One Big Beautiful Bill” with a 51–50 vote, thanks to Vice President J.D. Vance’s tiebreaker. The bill, which extends Trump-era tax cuts and adds deductions for tipped and overtime workers, is expected to deepen the national debt by an estimated $3.3 trillion over the next decade.
Federal Reserve Chair Jerome Powell signaled no immediate interest rate cuts, citing inflation uncertainty tied to the bill’s spending boosts.
Musk Blasts the Bill—Trump Hits Back
Tesla CEO Elon Musk didn’t mince words. Calling the bill “utterly insane and destructive,” Musk warned it could crush innovation and cost American jobs. On X (formerly Twitter), he hinted at funding primary challenges against pro-bill lawmakers.
Trump responded within hours on Truth Social: “Elon is nothing without government help. $7,500 tax credits, SpaceX contracts, and now he cries? Maybe time for DOGE to eat the master.” In a follow-up, Trump hinted that Musk’s companies could face deeper scrutiny—and even implied Musk’s U.S. citizenship should be “reviewed.”
Tesla Stock Gets Torched
Tesla shares dropped nearly 7% intraday on July 1, ultimately closing around $300–$301. That’s a multi-billion-dollar haircut in one afternoon. Investor anxiety flared not only over the EV credit but also the prospect of Trump-fueled investigations or federal contract cuts.
Delivery Numbers: A Litmus Test
On July 2, Tesla is due to report Q2 delivery numbers. Analysts expect around 387,000 vehicles delivered—a 13% year-over-year drop. The range varies widely from 342k to 404k, underscoring investor uncertainty. If deliveries disappoint, expect the stock to keep sliding. If they exceed expectations, Musk might have just enough momentum to weather this political storm.
FAQs
Why did Tesla stock drop after the tax bill passed?
Because Elon Musk attacked the bill, and Trump retaliated. Investors fear the fallout could affect federal support for Tesla.
Is the $7,500 EV tax credit at risk?
Yes. Trump hinted it could be repealed by September, which would hit Tesla’s margins hard.
How many cars did Tesla deliver in Q2 2025?
Estimates range from 342,000 to 404,000. Official numbers are expected July 2.
Could Trump cut SpaceX or Tesla contracts?
He’s suggested he might, especially if Musk keeps criticizing him publicly.
