Trump makes an ad for Tesla
Tesla CEO Elon Musk and President Trump are in the midst of an ugly breakdown, and it didn’t take long for Musk’s businesses, including Tesla, to be thrown in the middle of it as children in a divorce.
We will focus on the real impact on Tesla’s business here rather than its stock price, which is largely driven by mood, similar to a Meme stock.
As Jamie pointed out in his post yesterday, Tesla’s stock rose after Trump’s elections, mostly on expected corruption between Musk that invested nearly $ 300 million to get Trump elected and the federal government.
Now Tesla’s stock crashed 14% yesterday after Musk, turning on Trump in a very public way.
During the increase after the election, and now this drop Tesla’s core business has remained unchanged. Its car business is in obvious decline, while its energy business is growing, but not enough to compensate for the fall in EV deliveries.
Investors cling to the hope that this time Musk is finally right in Tesla, which solves self-propelled, although he has consistently taken wrong for it for years, and has now launched a turn to Tesla, which operates an internal riding-hailing fleet in a geo-fence area in Austin, Texas, and helped with “heavy telecommunications operation.”
In this context, in Tesla, and with his CEO, who is now involved in a feud with the leader of the US federal government and his loyalists in Congress and the Senate, how can this affect Tesla?
Branding problems
Tesla has experienced major fire problems over the past few years as its CEO has become more and more political and this trend has been intensified since he became directly involved in Trump.
It led to the “Tesla Drafuedown” protests all over the world, and Musk Musk alienated a large part of Tesla’s Customer BALook that has a tendency to lean on the left. Some argued that Tesla might be able to grab new customers to the right of the political spectrum, and Trump tried to help with it by keeping what constituted a Tesla infomercial on the White House lawn.
However, we have previously emphasized that Tesla has limited opportunities to bring customers from red states and rural areas.
Now that Musk has called Trump an Ingrate, suggested he was a pedophile and called his flagship legislation a “abomination”, all within a few hours, it will probably result in Maga supporters turning away from Tesla.
Musk’s influence on the brand has had the most significant negative effect on Tesla in North America and Europe.
Tesla’s sales are on the way to be down approx. 50% in Europe this year and Tesla’s market is wiped out in Canada.
While the impact on the brand in the United States is undeniable, it has not yet been intense in deliveries for several reasons.
First, Tesla has maintained record discounts and incentives to buy its vehicles in the United States.
Secondly, the US market is the least competitive for electric vehicles between all global markets. Tesla’s most important competition is from other US car manufacturers, while many foreign car manufacturers do not bring their entire EV lineups into the United States, and Chinese EVs are almost banned in the country.
Eventually, the US still has an incentive of $ 7,500 when buying new electric vehicles, which is expected to go away next year – creating a certain speed to buy now.
Incentives
Trump struggled to remove the $ 7,500 incentive in purchasing electric vehicles – a campaign that Musk supported with almost $ 300 million.
The president also attacked electric vehicles in general during the campaign with clear wrong information. Shortly after, Musk said “Trump was right in everything.”
The plan was always to remove the EV tax credit and any incentives for renewable energy. Musk actually agreed with this, although he added that he believes that subsidies for fossil fuels that largely surpass them for renewable energy should also be removed.
Trump never showed any intention to do so and fought for the US drilling for more oil and restarting unpaid coal -fired power plants.
The ‘big beautiful bill’, which was approved by Congress and is now being discussed in the Senate, officially kills the EV tax credit, 30% tax credit for solar, wind and energy storage (ITC), the incentives to produce batteries in the United States, and it tries to kill Carb’s ZEV credits.
Some have attributed this as the real reason why Musk turned on Trump and attacked the bill, but the truth is that Trump and GOP had signaled all this before, including during the campaign that Musk supported.
However, Musk has mostly been absent in Tesla for the past year, but he recently returned to Tesla and received several orientations. There is a possibility that Musk has now understood the full impact of removal of all EV, battery and solincentaments.
Without ZEV Credits, EV -Tax Credit, ITC and Battery Production Credits, Tesla would have lost money in the 1st quarter of 2025.
Surveys, sanctions and prohibitions
Many argued that the real reason why Musk supported Trump was to get federal agencies to investigate him and his businesses from his back.
Musk and his companies have been under SEC, DOJ, NTHSA, US Labor Board and FTC studies.
Some of these studies rose and when musk first entered the government, he pressed for new leaders of these agencies and depleted their resources through DOGE.
Now that he has turned on Trump, there is an opportunity for these studies to ramp up again.
Trump has already made it clear that he is planning to reciprocate against Musk’s companies in a number of positions on truth social:
Especially could sec T.AKE Action against Musk and Tesla because of the recent accusations of misrillation of Tesla’s demand.
NHTSA has conducted a long-term study of Tesla’s full self-driving program, and Trump was able to press the agency to close its upcoming pilot program in Austin or even remember FSD features.
Electek Tag
I think things will cool down. The way I see it was the musk pushed out; He realized he didn’t have that much control over Trump and tested the water to activate his plan B, which is to get Trump impeached and have him replaced by JD Vancce.
He quickly realized that he did not have the political weight to make it happen and backed up.
The situation is still not ideal and I can definitely see it escalating again. Especially when Musk signaled that he is willing to shed his weight into the political class to get what he wants:
Trump could be worried about it and decide to reduce musk’s power that is addicted to Tesla’s bloated stock price.
Even if nothing happens and Musk and Trump solve their differences, the truth is that Tesla will suffer significantly of this bill.
The whole EV market will suffer. If the bill goes, EV will have a good second half of the year as buyers try to take advantage of the tax credit, but things will be rough in 2026.
For Tesla, I think it’s starting to lose money in 2026. Competition is starting to crush the business in Europe and China. The United States is its only market where sales do not go down, but that’s because Tesla is willing to reduce its gross margins with discounts.
Tesla will have to dig deeper on that front without tax credit. You are removing the billions of dollars that Tesla has got for ZEV and Battery Manufacturing Credits from Bidens IRA and it will be negative.
In the end, it will ruin the entire US car market when the rest of the world moves to electric vehicles, and US car manufacturers have a weaker car market that still indirectly incentives fossil fuel -powered vehicles.
FTC: We use income that earns Auto -connected links. More.