The Tesla price fall this week wasn’t about production, deliveries, or rates. It was about a very public clash between Elon Musk and Donald Trump. And it hit the stock hard.
What Happened
Last week, Elon Musk stepped down from the Department of Government Efficiency (DOGE). The exit was loud and widely covered. Critics called DOGE a distraction. Musk said the job was done.
Then on June 3, Musk slammed Trump’s “One Big Beautiful Bill” on X. He called it a “$3.8 trillion deficit bomb” and a “disgusting abomination.”
The next day, during an Oval Office meeting with German Chancellor Friedrich Merz, Trump said he was “disappointed” in Musk and suggested he was upset over reduced EV subsidies.
Musk fired back on X, saying he hadn’t seen the bill before it passed.
That sparked the full meltdown.
Trump took to Truth Social. He said he’d consider pulling all federal contracts and subsidies from Musk’s companies. His post claimed this would save “billions and billions.”
Musk responded on X by saying SpaceX would start decommissioning its Dragon program. Some took it as a direct shot at NASA.
Investors took notice. Tesla stock fell over 14% in one day, wiping out around $150 billion in market cap.
Why It Matters
This wasn’t about fundamentals. It was about sentiment, perception, and politics.
But there’s more under the surface. Tesla’s position isn’t as dominant as it was two years ago:
- Legacy automakers are catching up in EV tech.
- Chinese EVs are cheaper and improving fast.
- Tesla’s full self-driving still isn’t ready.
- The brand is tied tightly to Musk — and Musk is polarizing.
Combine that with political risk, and you get what happened this week.
If You Hold Tesla Stock
This isn’t financial advice. But if you're holding Tesla, ask yourself:
- Are you buying the company or the CEO?
- How would your thesis hold up if Tesla lost federal support?
- Is Tesla still leading in tech, or just brand visibility?
- Could this political drama spill into regulatory decisions?
And most importantly: what happens if this isn’t the last spat?
If You’re Thinking of Selling
Before you rush to hit “sell,” step back:
- Was this drop based on fundamentals? Or headlines?
- Do you think Musk’s political role is over?
- What’s your investment horizon?
- Are you comfortable with this level of volatility?
Some investors buy dips like this. Others avoid politically exposed stocks altogether. You have to know your risk tolerance.
Summary
The Tesla price fall this week wasn’t random. It was triggered by a high-profile political row. But it’s also exposing deeper weaknesses: rising competition, political backlash, and a CEO who dominates headlines.
If you're a shareholder — or thinking about becoming one — you need to weigh your trust in the company’s long-term execution against its short-term chaos.
Disclaimer
This article does not constitute financial advice. Always consult a licensed financial advisor before making investment decisions.
