Tesla Stocks Plummet as U.S. Subsidies Are Revoked Amid Musk and Trump Rift
In a shocking turn of events, Tesla stocks fell by 14% following the U.S. President’s decision to revoke Tesla’s electric vehicle subsidies. This move, leading to a $152 billion drop in Tesla’s market capitalization, marks the largest decline in the company’s history, according to CNBC.
The revocation of subsidies is part of a larger budget decision that not only targets electric vehicles but also solar panel incentives. This shift comes as a blow to Tesla, whose stocks slid below the crucial $1 trillion market cap. Elon Musk, whose wealth is heavily tied to Tesla shares, expressed his discontent.
Trump and Musk’s Strained Ties
The fallout began when the U.S. President announced the cancellation of a subsidy program started by former President Joseph Biden, a move described as ending an “electric vehicle mandate.” President Trump commented on social platform Truth Social, referring to Musk’s diminishing influence.
Although Trump revealed past camaraderie with Musk, he now questions the future of their friendship. Musk’s lukewarm response, suggesting indifference, was swiftly followed by claims that he played a key role in Trump’s election success.
Impact and Future Concerns
This latest decline comes despite a 22% increase in Tesla shares earlier in May, although global sales are dipping. This week alone, shares decreased by 18%, aggravated by Musk’s opposition to the current U.S. budget proposition.
The proposed budget not only withdraws subsidies but also includes a $250 annual fee for electric vehicle owners. Furthermore, Musk’s attempts to appoint Jared Isaacson as NASA head faced governmental pushback.
Amidst ongoing protests, Tesla, led by Musk, braces for future challenges as market dynamics and political ties continue to shift.
