Trump Cuts Ties with Elon Musk, Triggering Sharp Decline in Tesla Stock
The relationship between former U.S. President Donald Trump and Tesla CEO Elon Musk has officially collapsed, triggering immediate and sharp market reactions. Tesla's shares (TSLA) plummeted following Trump's public remarks criticizing Musk and the federal government's electric vehicle (EV) incentive policies.
Tensions Escalate Over EV Incentive Policy
The conflict stemmed from Musk’s outspoken opposition to the proposed elimination of EV incentives, calling the policy “disgraceful” and poorly designed. The legislation, which aimed to remove tax incentives for electric vehicle purchases, was introduced under a plan supported by Trump’s team, particularly his advisor Jared (a veiled reference to Jared Kushner), who also formerly held a leadership role at NASA.
Trump didn’t hold back. “Elon knew the incentives would be removed from the start,” he said. “He’s angry because the proposal didn’t meet his expectations and that’s unfortunate.”
In response, Musk argued that the incentives favored legacy automakers and failed to promote true innovation, adding that the legislation was more about optics and political gain than actual progress. His criticism appeared to take on a more personal tone, leading to a total rupture of any remaining political or strategic ties between the two moguls.
Stock Market Reacts Swiftly
The fallout was felt immediately on Wall Street. Tesla shares tumbled nearly 14% in a single day, marking one of the steepest single-day drops for the company in recent history. The decline extended to over 24% year-to-date, erasing billions of dollars in market value and heightening investor concerns about Tesla’s future political alignment.
Market analysts note that Elon Musk’s strong public presence, especially on platforms like X (formerly Twitter), often influences investor sentiment sometimes dramatically. “Tesla’s volatility has always been linked to Elon’s persona. When he’s in conflict with political figures, the market takes notice,” said a Bloomberg analyst.
A Rift Beyond Business?
While policy disagreement was the spark, the fallout appears deeply personal. Trump, known for his strategic alliances, dismissed Elon’s importance in shaping the EV landscape, despite Musk’s undeniable role in transforming the automotive industry. Elon, on the other hand, continued to highlight that he isn’t dependent on government handouts and remains committed to innovation, regardless of who is in office.
Final Thoughts
This public split between two of the most influential figures in business and politics underlines how tightly intertwined political rhetoric and market performance can be. As the 2024 election season intensifies, investors may see more turbulence ahead, especially in sectors like tech and clean energy, which are highly sensitive to federal policies.
> Disclaimer: This article is for informational purposes only and should not be taken as financial advice. DYOR (Do Your Own Research).