Musk-Trump budget conflict causes Tesla stock to plummet... Coupled with poor sales in Europe
Elon Musk Split With President Trump (Source: NYT)
The Tesla stock took a direct hit from political controversy, dropping 4.5% in one day. Analysts say that uncertainty sparked by the budget bill conflict between Ceo Elon Musk and U.s. President Donald Trump has dampened investor sentiment.
On The 4th, local time, Musk strongly criticized the Republican-led budget bill as “monstrous and piggy bank-like spending.” He referred to his experience as the head of the Government Efficiency Department (Doge) during the Trump administration, noting, “This method drives the country into a structure where it can do nothing but pay interest.” After this remark, Tesla's stock price fell $15.46 (-4.54%) to close at $328.81.
The fallout from the political comments has raised concerns that it could negatively affect Tesla's prospects for future policy benefits, beyond just an image blow. Musk and Trump were previously considered to have a friendly relationship, but this public criticism is being taken as a sign of a crack in that relationship.
Meanwhile, Tesla is set to conduct an autonomous robo-taxi experiment in Austin, Usa, on the 12th. Autonomous driving is a key pillar supporting Tesla's future vision, but political risks and consumer backlash are emerging as variables. Protests opposing Musk's political stance have recently broken out at Tesla stores in the Usa, and a declining demand trend continues in Europe.
On The other hand, there are some positive indicators in the Australian market. According to local media ‘Drive,’ Tesla delivered 3,897 units in May, the highest level in a year. In particular, sales of Model Y increased by 122.5% year-over-year to 3,580 units. However, Model 3 sales decreased by 83.8% in the same month, and total cumulative sales are still down by 48.2% year-over-year.
Experts are evaluating the performance of the new Model Y in Australia as a signal of Tesla's global rebound, but they also analyze that political uncertainty and regional demand variations continue to be burdens on Tesla's stock price.