Tesla’s CEO is in a pickle, and it’s not the electric kind. A public spat with President Trump has left Elon Musk and his EV empire facing a bumpy road. The fallout could cost Tesla billions, and the drama is juicier than a soap opera.
The trouble started when Musk and Trump traded barbs on social media. Tesla’s stock took a 14% nosedive on Thursday, the worst single-day drop in its history. By Friday, it clawed back nearly 4%, as investors hoped for a ceasefire or just sniffed a bargain.
Musk’s beef with Trump puts Tesla’s bottom line at risk. The House Republicans’ domestic policy bill, now in the Senate’s hands, aims to zap EV-friendly policies. Tax credits up to $7,500 for EV buyers? Gone. Battery factory subsidies? Poof. Charging station funds? History.
This bill is no friend to Tesla, the U.S.’s top EV maker. It even slaps a $250 annual fee on EV owners, which green groups call a low blow. Every automaker with electric cars will feel the sting, but Tesla’s got extra skin in the game.
Here’s the kicker: Tesla’s been banking big on clean air credits. In Q1 alone, these credits raked in $595 million—more than Tesla’s net profit of $409 million. Without them, Tesla would’ve been in the red, not the black.
Princeton’s Jesse Jenkins, an EV industry guru, says these credits are Tesla’s lifeline. He crunched the numbers: Republican policies could slash U.S. EV sales by 7.7 million by 2030. For Tesla, that’s 3.4 million fewer cars sold—two years of sales up in smoke.
Musk’s not just fighting for cars; he’s got big dreams of driverless taxis. He’s called them Tesla’s future, but Trump’s team might slam the brakes. Federal regulators, now out of Musk’s sway, could stall those robo-ride plans.
Until recently, Musk seemed to shrug off the GOP’s anti-EV crusade. He’s been vocal about the federal deficit, calling it a path to national bankruptcy. Guess he thought Tesla could weather the storm while rivals sank.
But the storm’s hitting harder than expected. Tesla’s sales and profits are already sliding, and this bill could make things worse. The company’s not just losing subsidies; it’s losing its regulatory credit cash cow.
Musk’s flip-flopping on subsidies adds to the comedy. He’s called for scrapping all government handouts, including EV credits, saying they’d help Tesla by hurting competitors. Now, with his company on the ropes, he’s singing a different tune.
Tesla’s not alone in this mess. Other automakers, like Ford and GM, are sweating the loss of EV credits too. Their trade group begged Congress to keep the $7,500 rebate, citing competition with Chinese EV giants.
Meanwhile, California’s fighting back. Governor Newsom plans a state-level $7,500 EV credit if the federal one dies, though Tesla might not qualify. Musk called that move “insane” on X, because of course he did.
The Senate could still tweak this bill. Some Republicans, whose districts rely on EV factories, are hesitant to gut subsidies. But Trump’s pressure keeps them in line, making Tesla’s future shakier than a bad Wi-Fi signal.
Investors are jittery. Some, like Gary Black of The Future Fund, dumped Tesla stock, saying its value doesn’t match its profits. Others, like Morgan Stanley, still bet on Musk’s autonomous dreams, but the road’s looking rough.
Musk’s exit from Trump’s inner circle doesn’t help. He left his “Department of Government Efficiency” gig, citing too much political heat. Posts on X say he’s worried about Tesla’s brand taking a hit.
Tesla’s not just a car company anymore. Musk’s pushing AI and robotics, with driverless taxis as the golden goose. But if regulators turn hostile, those plans could stall faster than a dead battery.
The EV market’s already wobbling. Sales grew 11% in Q3 2024, but Tesla’s share slipped from 64% in 2022 to 48% last year. Musk’s polarizing antics aren’t helping, with 60% of EV buyers saying his reputation sours them on Tesla.
Trump’s team isn’t backing down. They’re eyeing weaker pollution rules and fewer charging stations, which could choke EV growth. Environmentalists warn this could spike emissions, making city air dirtier than a dive bar’s floor.
Musk’s in a tight spot. He can’t charm Republicans into saving Tesla’s subsidies, and his driverless dreams hang by a thread. It’s a high-stakes game, and Tesla’s riding the rollercoaster without a seatbelt.
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