By News18
Washington, Jul 1 (AP) Shares of electric vehicle maker Tesla, which is headed by Elon Musk, slumped Tuesday as the war of words between billionaire and President Donald Trump over the big bill of tax breaks and spending cuts heats up again, with Musk saying he may form a new political party.
Shares of Tesla have already tumbled more than 20% this year as sales of the company鈥檚 vehicles erode amid a backlash against Musk and his association with the Trump administration. Tesla sales are plummeting in Europe and China as well.
Tesla鈥檚 stock fell nearly 6% in early trading.
The resumption of hostilities between Trump and Musk, also the CEO of SpaceX, is always bad news for investors in Musk鈥檚 companies.
鈥淭his BFF situation has now turned into a soap opera that remains an overhang on Tesla鈥檚 stock with investors fearing that the Trump Administration will be more hawkish and show scrutiny around Musk related US government spending related to Tesla/SpaceX and most importantly the autonomous future with the regulatory environment key to the future of Robotaxis and Cybercabs,鈥 wrote Wedbush Securities analyst Dan Ives on Tuesday.
鈥淲e would expect the stock to be weak to kick off trading this morning as the Street will show concern that the Trump and Musk once BFF relationship now backfires and turns into a junior high school friendship gone bad into an enemy,鈥 he said.
The most prominent divide in the relationship between Musk and Trump is the president鈥檚 big bill. Musk ramped up his criticism of the bill over the weekend, arguing the legislation that Republican senators are scrambling to pass would kill jobs and bog down burgeoning industries.
Musk posted on X on Saturday that the bill would be 鈥減olitical suicide for the Republican Party鈥.
With the Senate working its way through a tense overnight session that dragged into Tuesday, Musk suggested he will work to get members of Congress who vote for the bill out of their seats next year.
鈥淓very member of Congress who campaigned on reducing government spending and then immediately voted for the biggest debt increase in history should hang their head in shame,鈥 he wrote on X. 鈥淎nd they will lose their primary next year if it is the last thing I do on this Earth.鈥 The post was viewed 26 million times on the social media platform.
A few hours later, Musk followed up with a post claiming he will create a new political party if the bill passes.
鈥淚f this insane spending bill passes, the America Party will be formed the next day,鈥 he wrote. 鈥淥ur country needs an alternative to the Democrat-Republican uniparty so that the people actually have a VOICE.鈥 Musk鈥檚 post about the America Party was viewed 32 million times on X.
Trump focused some of his criticisms of Musk on EV mandates and subsidies.
In a post on Truth Social early Tuesday, Trump said Musk has known that he鈥檚 against an EV mandate and that people should not be forced to own electric vehicles.
鈥淓lon may get more subsidy than any human being in history, by far, and without subsidies, Elon would probably have to close up shop and head back home to South Africa,鈥 Trump wrote.
Trump also suggested that the US could cut back on spending by targeting segments of the economy in which Musk plays a significant roll.
鈥淣o more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE. Perhaps we should have DOGE take a good, hard, look at this? BIG MONEY TO BE SAVED!!!鈥 Trump posted, alluding to the cost-cutting entity that until recently, was headed by Musk.
Several hours later, while standing on the White House lawn before heading to Florida, Trump continued to take shots at Musk and what he believes to be his biggest grievance, the billionaire鈥檚 displeasure over potentially losing EV subsidies.
鈥淗e鈥檚 very upset. You know, he can lose a lot more than that, I鈥檒l tell you right now,鈥 Trump said. 鈥淓lon can lose a lot more than that.鈥 When asked by a reporter if he was going to deport Musk, Trump warned that the Department of Government Efficiency, or DOGE, could come back to hurt the billionaire.
鈥淲e鈥檒l have to take a look,鈥 Trump said. 鈥淲e might have to put DOGE on Elon. You know what DOGE is? DOGE is the monster that might have to go back and eat Elon. Wouldn鈥檛 that be terrible? He gets a lot of subsidies.鈥 Musk responded on X by saying he would refrain from escalating the conflict, but he took another shot at Trump and Republicans anyway.
鈥淲hat good is Doge saving $160B when this bill increases the debt ceiling by $5T? It makes mockery of the work,鈥 he wrote. (AP) SCY SCY