Elon Musk’s back-and-forth with President Donald Trump last week sent Tesla’s share price tumbling. However, industry observers say it’s unlikely to slow the automaker’s long-term goals, including its much-anticipated robotaxi service.
The public spat began when Musk criticized the Republican spending bill for cutting electric-vehicle tax credits, a move he warned would add more than $2.4 trillion to the U.S. deficit.
Trump responded by threatening to cancel government contracts with Musk’s companies. Musk then fired back, saying he would shut down SpaceX’s Dragon spacecraft before backing away from that threat.
On Thursday of last week, the TSLA stock slid 14%, erasing about $138 billion from its market value. The shares recovered some ground the next day, but Musk still saw one of the biggest single-day drops in personal wealth ever recorded, an estimated $34 billion hit to his net worth as reported by Business Insider .
Tesla faces a bigger threat than the Trump feud
Despite the headlines, analysts say there’s little reason to believe the feud will leave lasting scars on Tesla’s core business.
“Musk’s and Trump’s relationship has an impact on the stock and maybe investor sentiment, but as far as the actual business impact for Tesla, I never thought Trump getting elected was positive or that negative for Tesla,” Morningstar analyst Seth Goldstein told Business Insider. “So with the feud that started between Trump and Musk, I never really viewed that as that positive or negative for Tesla either.”
Goldstein noted that the more significant concern for Musk and other EV makers is the broader political push to trim or eliminate subsidies.
President Trump has already signaled he would cut electric-vehicle tax credits, a change Gene Munster of Deepwater Asset Management warned could shrink Tesla’s deliveries by about 15% in 2025.
Trump still wants Tesla to do well
As Tesla gears up to launch its robotaxi service in Austin this June, most analysts don’t think the federal government will try to stop it. Munster argues that self-driving cars are a key part of “physical AI,” and that the U.S. has an interest in leading both digital and real-world artificial intelligence. He expects “cooler heads to prevail” and for Washington to keep supporting the technology.
Goldstein says the government has almost no way to block Tesla’s self-driving plans. While the Department of Transportation is reviewing federal safety rules for self-driving vehicles, he said it’s unlikely regulators would mandate expensive lidar sensors just to target Musk’s company.
“If Trump wanted to hurt Elon, they could more easily cut SpaceX contracts than create a convoluted policy against Tesla,” he said.
Morgan Stanley analyst Adam Jonas echoed the broader sentiment in a note released Friday.
He said the Musk-Trump dust-up doesn’t change the “longer-term vectors that drive the stock’s value,” pointing to the EV maker’s work in AI, robotics, manufacturing, supply-chain redesign, renewable energy, and critical infrastructure.
By late Friday, the public exchange of former best friends had died down. In a Saturday interview with NBC News, Trump said he doesn’t plan to reconcile with Musk and warned him against backing Democratic candidates . Yet, on Friday, while talking to reporters on Air Force One, the president said on a lighter note, “I hope he does well with Tesla,” Trump said.
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