Elon Musk, the CEO of Tesla, and President Donald Trump began their verbal sparring match, as the shares of the electric vehicle manufacturer fell during Tuesday’s premarket trade.
Premarket trading saw a 6% decline in Tesla stock (TSLA).
In response to Musk’s harsh criticism of the One Big Beautiful Bill Act, which is currently making its way through the U.S. Senate, the president threatened to revoke government contracts for SpaceX and Tesla and remove subsidies from Musk’s businesses. Musk is also the CEO of SpaceX and the owner of the social media platform X. Being Musk’s sole publicly traded company, Tesla is once more exposed to the threats and backlash of a well-known internet political dispute.
When Musk lambasted senators who backed the proposed spending measure, which he claims will increase the deficit by $5 trillion, in a series of posts on X, the dormant phase of the Musk-Trump feud came to an end. He cautioned, “Every member of congress who campaigned on reducing government spending will lose their primary next year if it is the last thing I do on Earth.”
All 435 members in the U.S. House and one-third of the Senate’s 100 seats are up for election in 2026. Trump, who intends to sign the tax and spending bill before July 4th, has also indicated that he would back primary contests for any Republicans who oppose it.
See: Sen. Thom Tillis, a Republican, will not seek reelection in 2026 after criticizing Trump’s major plan.
Trump’s retaliatory posts on Truth Social, a platform run by a social media company (DJT) that he owns, in the early hours of Tuesday posed a direct threat to Tesla by saying that he was “strongly against the EV mandate” and that the so-called Department of Government Efficiency, which Musk effectively controlled until the end of May, “should take a good, hard look” at the subsidies given to Musk’s companies.
In response to a question on whether he would deport Musk, Trump later told a group of reporters that “we’ll have to take a look” before restating the DOGE threat.
According to the president, “DOGE is the monster that might have to go back and eat Elon,”
Shares of Musk’s flagship firm fell 14% on June 5, the last time Trump and Musk’s extremely personal differences were made public. (This occurred on a day when the S&P 500 SPX fell by only 0.5%.) But shortly after, the two came to a truce, the disputes appeared to be resolved, and Tesla’s stock price rose 20%.
With the release of Tesla’s second-quarter vehicle deliveries imminent, this farce occurs at a critical moment for the company. Given that Musk has left “DOGE,” as he called the quasidepartment, and returned full-time to focusing on his enterprises, traders and fund managers are especially sensitive to these numbers at the moment. Tesla was hopeful that sales would begin to recover.
Tom Narayan, an analyst at RBC Capital Markets, predicted deliveries of 366,000 in the second quarter in a report released last week. This is significantly less than the 406,000 average estimate given by Visible Alpha. Tesla’s shares have fallen 21% so far this year, and a figure this low combined with the recent outburst of controversy could make for a challenging second half for the company.
