Tesla CEO Elon Musk and President Trump are currently in the midst of a public feud, with Tesla being caught in the crossfire. The impact of this feud on Tesla’s business is significant, beyond just the fluctuations in its stock price.
Following Trump’s election, Tesla’s stock saw a surge, largely attributed to the anticipation of corruption between Musk and the federal government. However, the recent public fallout between Musk and Trump led to a 14% drop in Tesla’s stock.
Despite these fluctuations, Tesla’s core business has seen some challenges. While its energy business is growing, the automotive business is facing a decline, particularly in EV deliveries. Investors are hopeful that Tesla’s self-driving technology will turn things around, although skepticism remains given Musk’s track record on this front.
Brand issues have also plagued Tesla, particularly in North America and Europe. Musk’s involvement in politics has led to protests and alienated a portion of Tesla’s customer base. The recent public spat with Trump is likely to further impact Tesla’s brand image, with potential repercussions on sales in key markets.
Incentives for electric vehicles have been a point of contention between Musk and Trump, with the removal of the $7,500 EV tax credit looming. Musk’s support for Trump’s campaign promises regarding EV incentives now appears to be backfiring, as the current administration moves to eliminate these incentives.
Furthermore, investigations and penalties against Musk and Tesla by federal agencies may see a resurgence following the fallout with Trump. Musk’s influence over government agencies has waned, potentially leading to increased scrutiny and penalties for his companies.
While the situation between Musk and Trump may cool down, the long-term impact on Tesla remains uncertain. The impending removal of EV incentives, coupled with increased competition in key markets, could spell trouble for Tesla’s financials in the coming years.
In conclusion, the feud between Musk and Trump has far-reaching implications for Tesla’s business. The company may face challenges in branding, sales, and regulatory scrutiny in the aftermath of this public fallout. As the automotive market shifts towards electric vehicles, Tesla’s future success may hinge on its ability to navigate these turbulent waters.
