July 1, 2025 – Tesla Inc. (TSLA) shares continued their downward trend Tuesday as tensions between former President Donald Trump and Tesla CEO Elon Musk escalated, stoking investor uncertainty and raising questions about the electric vehicle giant’s near-term trajectory.
Tesla Stock Slides Amid Political Turbulence
On Tuesday, Tesla stock fell 4.8% to close at $171.23 on the Nasdaq, extending a week-long slump that has wiped more than $60 billion from the company’s market capitalization. The decline comes as the Trump-Musk feud enters a new phase, with both high-profile figures trading barbs on social media and in public appearances.
The conflict reignited over the weekend after Trump, the presumptive Republican nominee for the 2024 presidential election, criticized Musk’s recent comments about U.S. manufacturing policy and his push for stricter AI regulations. Musk, who has become increasingly vocal on political matters, responded by questioning Trump’s EV policies and warning that "political instability" could threaten American innovation.
Investor Anxiety Grows
Wall Street analysts say the ongoing dispute is fueling volatility for Tesla, already buffeted by slowing electric vehicle demand in China and increased competition from legacy automakers. The public spat has also heightened concerns that Tesla could become a political football in the 2024 presidential race, with Trump threatening to revisit federal EV incentives and Musk warning of "regulatory headwinds."
"Investors dislike uncertainty, and the Trump-Musk feud is creating just that," said Dan Ives, a senior equity analyst at Wedbush Securities. "Political pressure and unpredictable policy could weigh on Tesla’s valuation through the election cycle."
What’s Next for Tesla?
- Short-term outlook: Tesla faces continued volatility as the U.S. presidential campaign intensifies and Musk’s political activism garners headlines. Analysts expect further swings in share price driven by social media activity and policy pronouncements.
- Long-term fundamentals: Despite the noise, Tesla maintains a strong balance sheet and remains the global leader in EV sales. However, margin pressures and ongoing geopolitical uncertainty could challenge growth prospects.
- Regulatory risks: A potential Trump administration could roll back federal incentives for EVs—a move that might dampen U.S. sales and impact Tesla’s bottom line.
Market Watch: Broader Implications
Tesla’s turbulence comes at a time when tech and auto stocks are highly sensitive to political developments. The S&P 500 and Nasdaq Composite also closed lower Tuesday, with investors eyeing the impact of the Trump-Musk feud on broader market sentiment.
For now, analysts recommend caution as the political and regulatory landscape continues to shift. Many are watching for Musk’s next moves and how further escalation with Trump could shape both Tesla’s future—and the future of the EV industry—in the months ahead.
