Tesla Shares Plunge: Musk and Trump’s Public Feud Sparks Investor Concerns
In a dramatic turn of events, a public spat between Tesla CEO Elon Musk and former U.S. President Donald Trump has caused Tesla shares to experience their most significant drop in history. The conflict arose over differences regarding a new government budget proposal that would eliminate electric vehicle subsidies. As tensions escalate, reports suggest both parties are moving towards reconciliation.
The Roots of the Disagreement
The clash began after Trump threatened Musk with cutting Tesla and SpaceX from federal projects, prompting Musk to criticize Trump’s policies publicly. Tensions further heightened when Musk suggested the need for a new political party to represent the interests of the majority of Americans who feel unrepresented.
Path to Resolution
Sources like Reuters reveal that Trump’s aides are organizing a call to Musk to mend the strained relationship. Investors responded positively to this possibility; before U.S. markets opened, Tesla’s stock price increased by 5% in Frankfurt trading as optimism grew for a resolution between the two influential figures.
Industry Analysts Weigh In
Analysts suggest that while the feud has been intense, mutual threats are unlikely to come to fruition. However, Tesla’s current challenges extend beyond executive disagreements. The company faces declining quarterly performance, falling monthly sales figures, and significant anticipation around the launch of an autonomous taxi service in Austin, adding to investor anxiety. The cessation of the subsidy program alone could cost Tesla $1.2 billion annually.
Musk’s Next Moves
Following an intense Twitter exchange, Musk considered ending the Dragon spacecraft program for NASA, which was met with public backlash. Advisers urged Musk to take a step back, which he acknowledged as sound advice, ensuring that the Dragon spacecraft will continue its important missions. The tech mogul also expressed willingness to reconcile with Trump, indicating a possible end to their feud.
