Experts warn president Donald Trump’s vocal support for the private car company Tesla by Elon Musk could hurt it in two ways
On Tuesday, Tesla investors welcomed while Trump Musk’s besieged and Boycott defended the car manufacturer by gaining the CEO with praise in a press conference, while five Teslas were the driveway of the White House.
Tesla’s stock went higher, after a dive a day before, when Trump called a “patriot” and announced that he had even bought one of his cars.
However, the unusual presidential approval of a private company has expressed concern.
“Tesla becomes a political symbol of Trump and Doge, and that is a bad thing for the brand,” said Wedbush Securities Financial Analyst Dan Ives, referring to the advisory group responsible for reducing government spending led by Musk. “You think it helps, but it’s actually pain.”
Tesla’s stock started from the opening on Tuesday after Trump posted at night on his social social platform that Musk “at stake” to help the country. Trump claimed in the post that “radical left -wing madmen” tried “Tesla, one of the world’s large car manufacturers, illegally and collusively boycotting.
A few hours later, Tesla shares rose even higher when Trump in the White House announced that he had bought a Tesla himself.
“I don’t like what happens to you,” Trump said before he chooses a Red Model S, which sells $ 80,000 for you. While he went into the driver’s chair, he proclaimed: “Wow. That’s wonderful. “
The share closed almost 4 percent on Tuesday after one of the worst sale of one day in the history of Tesla a day earlier.
This year Tesla is subject to competition from rival electric vehicles, in particular from China.
Countless analysts of the car industry have also pointed to the narrow association of Musk with Trump and with distant right causes worldwide. Tesla -showrooms in the US were besieged by demonstrators and his vehicles destroyed on the street.
Tesla owners, perhaps in an attempt to prevent them from being target, have placed bumper stickers on their cars with messages such as: “I bought it before Elon went crazy.”
Shares plunged 45 percent in 2025 and on Monday they fell more than 15 percent to $ 222.15, the lowest since the end of October, as a result of a new pessimism as a sales crater around the world.
Musk pumped $ 270 million in the Trump campaign on the way to the 2024 elections, appeared on stage with him and cheered Trump’s victory over the Democratic candidate Kamala Harris in November. Tesla shares rose to $ 479 per share in mid-December, but now trading around $ 230 per share.
The company can harm that decrease in two ways in the coming year.
Firstly, Tesla offers many of his employees the opportunity to buy shares at a reduced price as a way to stimulate them.
But with the shares that fell sharply, this discount price that is offered last year is in many cases higher than the share that is currently being traded, which means that there is no discount at all and the incentive is worthless.
Secondly, the price decline would be able to raise Tesla’s assets to raise money by selling newly created shares to investors to finance research and expansion. In 2020, the company sold $ 12 billion in shares because the factories built in Berlin and Texas and collapsed in self -driving technology. A falling stock price means that it will be much less in the proceeds in a future so -called secondary offers, although the sale of collapses means that it may not have to expand quickly.
Musk has become the face of the Slash-and-Burn government of the Trump government, shrinking efforts, known as the Ministry of Government Efficiency of Doge.
The department has promised enormous dismissals from federal employees and aims to drastically reduce government spending. The involvement of Musk has raised a known problem for Tesla shareholders: that the CEO, who also runs various other companies, is too derived to fully concentrate on its EV company.
Some of those other companies have also been put in trouble lately. His x social media platform crashed several times on Monday, of which Musk claimed that it was a “huge” cyber attack. But just like the clear cut he has done with federal jobs, Musk has lowered the number of employees at X and warned the experts of technology for increased vulnerability.
Last week a rocket exploded by Musk’s SpaceX and broke apart over Florida, about two months after another missiles from the company failed.
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