A Public Feud Impacts Tesla’s Stock
On July 1, 2025, Tesla (TSLA) shares declined over 5% in premarket trading, as shown in the finance card above, following a late-night Truth Social post by President Donald Trump. He suggested the Department of Government Efficiency (DOGE), formerly led by Elon Musk, should review subsidies for Musk’s companies, claiming they could save the U.S. “a FORTUNE.” This follows a public spat over a tax and spending bill, reigniting tensions between the two. This article details the stock drop, the Musk-Trump feud, and its implications, drawing from recent reports and real-time financial data.
Stock Movement and Financial Context
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Stock Performance: As per the finance card above, TSLA’s current price on July 1, 2025, is $302.057, down from the previous day’s close of $317.66, reflecting a roughly 4.9% drop. The stock opened at $298.46, hit a high of $312.414, and a low of $293.659, with intraday data showing fluctuations between $298.134 and $303.976. This follows a 22% rally in May 2025 but a 30% year-to-date decline, with a year high of $488.5399 and a low of $182.00.
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Market Impact: Tesla’s market cap stands at $1.123 trillion, down from $1.275 trillion before the drop. The decline aligns with prior volatility, including a $152 billion market cap loss on June 5, 2025, after an earlier Musk-Trump clash.
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Broader Context: Tesla’s stock has faced challenges in 2025, with a 36% first-quarter drop, weak sales in China (down 20%) and Europe (50% in April, double-digit in May), and eight Cybertruck recalls in 15 months for issues like software bugs and accelerator pedal problems.
The Musk-Trump Feud: Subsidies and Policy Clash
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Trump’s Statement: In a Truth Social post, Trump claimed Musk “may get more subsidy than any human being in history” and suggested that without subsidies, Tesla, SpaceX, and Starlink would collapse, forcing Musk “back to South Africa.” He proposed DOGE, which Musk led until May 2025, investigate these subsidies to save “billions.” Trump reiterated this to reporters, stating Musk could “lose a lot more” than EV mandates.
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Musk’s Response: On X, Musk countered, “I am literally saying CUT IT ALL. Now,” supporting subsidy cuts but criticizing the tax bill’s “MOUNTAIN of DISGUSTING PORK” and its deficit impact. He previously called the bill “utterly insane and destructive.”
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Background: Musk, a key Trump campaign backer in 2024, spent over $250 million and led DOGE, slashing agencies like USAID and saving an estimated $180 billion, though far below his $2 trillion goal. Tensions arose when Musk criticized Trump’s tax bill, which cuts green energy support and raises the federal deficit, leading to a June 2025 feud where Tesla lost 14% in a day.
Subsidies and Tesla’s Reliance
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Government Support: A February 2025 Washington Post analysis estimated Musk’s companies received $38 billion in government contracts, loans, subsidies, and tax credits over two decades, with SpaceX poised for more under Trump’s “Golden Dome” missile defense plan. Trump’s post exaggerated the impact, but Tesla benefits from EV tax credits, which the bill eliminates, affecting its competitiveness against Chinese rivals like BYD.
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Musk’s Stance: Musk’s push to “cut it all” aligns with his DOGE tenure, where he dismantled federal spending, but his criticism of the bill focuses on its deficit growth and unfair exclusion of oil and gas subsidies.
Community and Industry Reactions
Social Media Sentiment
X posts reflect intense debate. @MarketMatrixs and @samsolid57 highlighted Trump’s subsidy critique, noting TSLA’s 5% premarket drop, while @MosdefNG emphasized Trump’s EV mandate jab. @LibertyWitness captured Musk’s defiance, quoting his “CUT IT ALL” response. @WindInfoUS underscored the financial stakes, linking the drop to Trump’s subsidy threat.
Industry Insights
Analysts view the feud as a risk to Tesla. CNBC noted the stock’s volatility, with a 22% May rally undone by weak fundamentals and this spat. BBC called it a “bitter conclusion” to Musk and Trump’s alliance, citing Musk’s claim that his campaign support secured Trump’s 2024 win. The Wall Street Journal (via web) suggested Musk’s X attacks could fuel Republican opposition to the bill, complicating Trump’s agenda. Investors worry about Tesla’s sales, quality issues, and tariff-driven cost hikes.
The Bigger Picture: Tesla and Policy Risks
Tesla’s 2025 challenges—declining sales, recalls, and boycott threats over Musk’s DOGE actions and far-right endorsements—compound the subsidy threat. India’s EV market, growing 20% annually, watches closely, as Tesla’s planned factory faces tariff hurdles. The Musk-Trump feud, rooted in policy disagreements, risks further stock volatility, with TSLA down 30% year-to-date despite a $1.123 trillion market cap. The bill’s passage could reshape EV incentives, impacting Tesla’s affordability against competitors.
Tesla’s stock tumble on July 1, 2025, to $302.057, as shown in the finance card above, reflects renewed tensions between Elon Musk and President Trump over subsidies and a deficit-heavy tax bill. Trump’s call for DOGE to probe Musk’s $38 billion in government support threatens Tesla’s EV strategy, already strained by weak sales and recalls. Musk’s defiant “CUT IT ALL” stance on X underscores his policy rift with Trump, risking further volatility. As India’s EV market grows, Tesla’s challenges highlight the interplay of politics and business, with investors bracing for uncertainty.
