FILE PHOTO: President Donald Trump next to Tesla CEO Elon Musk at the White House in Washington, D.C., March 11, 2025. REUTERS/Kevin Lamarque License this content on Reuters Connect , opens new tab

Our Standards: The Thomson Reuters Trust Principles. , opens new tab

Kylie Maclellan Thomson Reuters Kylie is the Deputy Live Pages Editor, helping showcase Reuters multimedia coverage of the biggest global stories. She previously worked on the UK Breaking News team, and spent eight years in Westminster as a UK political correspondent – a period which included the Scottish independence referendum, Brexit and several general elections. She joined Reuters as a graduate trainee in 2008 and has also covered investment banking.

Farouq Suleiman Thomson Reuters Farouq is a Live Page Journalist, covering Reuters international news stories. He previously worked as a correspondent on the UK Breaking News team, reporting on general news across the United Kingdom.

Elon Musk’s Troubles Pile Up: Tesla Shares Sink, Trump Turns Foe, and EV Incentives Face Ax in 2025

Tesla reels from a multi-front assault as sales dive, Trump steps up pressure, and U.S. policies threaten the electric car revolution.

Quick Facts: 14% — Tesla’s stock plunged in a single day after Musk-Trump feud erupted

— Tesla’s stock plunged in a single day after Musk-Trump feud erupted Up to $7,500 — Federal EV tax credit at risk in new GOP-backed policy shakeup

— Federal EV tax credit at risk in new GOP-backed policy shakeup $250 — Potential new annual fee for every electric vehicle owner

Tesla is racing into 2025 battered and bruised, slammed by plummeting sales, a bruising public spat between CEO Elon Musk and Donald Trump, and a Republican blitz to roll back billions in electric vehicle incentives.

While electric vehicles (EVs) surge worldwide, the U.S. could soon gut federal support, threatening the very foundation of Tesla’s business. As political tensions mount and the clock ticks, investors and industry insiders are asking: Is this the perfect storm that finally slows down the Tesla juggernaut?

Why Are Tesla’s Sales and Profits Nosediving?

Tesla’s global sales growth has slowed dramatically after years of rapid expansion. Supply chain bottlenecks, price wars with rivals like BYD and traditional carmakers, and a maturing U.S. EV market have all squeezed margins.

In the first half of 2025, profit warnings sent shockwaves through Wall Street, and one day in April saw Tesla’s share price nosedive 14% amid bad news and public drama. While shares clawed back nearly 4% the next day, investors remain wary.

The landscape is shifting: U.S. competition is fiercer, consumer sentiment uncertain, and global EV appetite more selective. The question now is whether Tesla can pivot fast enough.

How Could Trump’s Rift with Musk Reshape Tesla’s Future?

Elon Musk’s falling-out with Donald Trump isn’t just a social media spectacle—it’s a business risk with serious consequences. With Trump and Republicans seeking to reverse policies supporting EVs, Musk may lose his crucial seat at the table.

Tesla already faces the threat of losing access to federal incentives and subsidies. Losing influence with regulators could also stall bold initiatives, such as Musk’s ambitious self-driving “robotaxi” plans.

For more on U.S. politics and business, visit nytimes.com and reuters.com.

What’s In the GOP Domestic Policy Bill—and Why Does It Matter for All EV Owners?

The sweeping bill being championed by House Republicans—and gaining momentum in the Senate—packs a punch:

Eliminates the $7,500 consumer tax credit for new EV purchases

Phases out subsidies for battery factories and lithium mining

Ends funding for building new EV charging stations

Imposes a $250 annual fee on every electric vehicle owner

These provisions could undermine not just Tesla, but the entire American EV ecosystem. Industry advocates and environmental groups argue that they would make electric cars less affordable and slow the U.S.’s transition to clean energy vehicles, putting the country at a disadvantage globally.

For insights into the EV industry and global trends, check bloomberg.com and cnbc.com.

Can Tesla Survive Without U.S. EV Incentives?

Tesla has built its brand around innovation, but incentives have fueled its rapid ascent in America. If the new policies pass, Tesla’s revenues and profits could take a major hit—especially as other automakers ramp up their own EV lineups.

Still, Musk’s relentless drive and international ambitions mean Tesla may double down on global markets, software services, and new technologies to offset U.S. headwinds. Autonomous driving, energy storage, and other ventures could prove to be Tesla’s safety net.

How Should Consumers and Investors React Now?

For consumers, now may be the time to act before incentives vanish. For investors, volatility is the new normal. Watch policy developments and Tesla’s quarterly results closely to gauge the impact.

Stay Ahead: What to Watch & Do Next

Track the fate of the EV tax credit and GOP policy bill in Congress

Monitor Tesla’s financial reports and sales trends

Consider buying or leasing an EV before incentives disappear

Watch for updates on “robotaxi” deployments and U.S. regulatory standoffs

Diversify investments as Tesla stock volatility remains high

Tesla CEO Elon Musk spent some $300 million on Donald Trump’s campaign, gaining unprecedented access to the Republican president’s administration. What does their public row mean for Musk’s empire?

How did Musk and Trump get so close?

Once a vocal critic of Donald Trump during his 2016 United States election campaign, Elon Musk, the billionaire CEO of Tesla and SpaceX, pivoted from his Democratic Party roots to embrace Trump’s policies during the Republican’s second term.

Frustrated by Obama-era regulations stifling his ventures, Musk embraced Trump’s agenda of tax cuts and deregulation.

Their bond grew from mutual respect to a robust political alliance, which saw Musk last year back Trump’s reelection campaign to the tune of nearly $300 billion (€263 billion).

When Trump returned to the White House in January, the world’s richest man took on an advisory role in the administration, leading the controversial Department of Government Efficiency (DOGE).

Tasked with slashing public spending, Musk’s role stirred controversy, impacting Tesla’s stock price and auto sales. After months of pressure from investors, Musk agreed last month to scale back his work in Trump’s government.

Trump and Musk on the outs over Big Beautiful Bill To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video

What sparked the public feud between Trump and Musk?

On Thursday, wearing a T-shirt emblazoned with the “The Dogefather,” Musk was given an initially cordial farewell by the president in the Oval Office.

But Trump could not contain his frustration at Musk’s earlier criticism of his administration’s sweeping tax and spending bill, which the Tesla founder called fiscally reckless and a “disgusting abomination.”

After Musk then accused the US president of alleged ties to child sex offender Jeffrey Epstein, the news conference ended with Trump threatening to revoke Musk’s government contracts, which could cost his business empire billions of dollars.

Over the next few hours, the row spilled over to social media, where both men repeated their White House remarks, prompting the SpaceX owner to announce an immediate decommissioning of its Dragon spacecraft, before appearing to back down.

How did markets react to the Trump-Musk fallout?

Tesla stock lost about $150 billion in market value on Thursday — the largest single-day decline in its history. The stock closed down over 14%.

However, news outlet Politico reported Friday that the two men were scheduled to speak later in the day in the hope of defusing the situation, which caused a sharp reversal in the stock’s fortunes. Tesla stock was up 5% in pre-market trade.

However, a White House official said later Friday that Trump had no plans for any call, adding that he may get rid of his Tesla bought in March in a show of support against Musk in the face of anti-Tesla protests.

Tesla shares have been on a wild rollercoaster ride this year after a strong performance around the US election. Having peaked at $428 in January, shares in the electric vehiclemaker plummeted by almost half in March as investors reacted negatively to Musk’s involvement in the Trump administration.

Tesla stock then rallied when Trump paused his unprecedented tariffs on the rest of the world and after US regulators eased rules on self-driving vehicles.

Trump came to Musk’s aid when Tesla vehicles and dealerships were attacked Image: Andrew Harnik/Getty Images

What’s at stake for Musk’s empire?

The public spat, as well as Trump’s budget plans, have left the fortunes of Musk’s companies hanging in the balance.

Tesla, Musk’s most profitable firm, could be severely impacted by Trump’s plans to cut a subsidy on new electric vehicles that is worth up to $7,500 for buyers.

Despite Musk’s aggressive criticism and lobbying by Tesla, Trump plans to eliminate the credit by the end of the year, seven years before it was due to expire.

News agency Bloomberg cited JP Morgan analysts as saying that the cut would reduce Tesla’s full-year profit by $1.2 billion. Cuts to state-level credits could further impact the EV maker’s bottom line this financial year.

It could, however, encourage EV buyers to bring forward their plans and spur demand for Tesla’s vehicles in the short term.

Tesla is already being impacted by Trump’s tariffs as the firm relies on Chinese parts for its Cybercab robotaxi and Semi electric truck.

Starlink satellite system shaping modern warfare To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video

However, it is unclear whether Trump can unilaterally make good on his threat to tear up federal contracts with Musk’s firms like SpaceX.

Since 2000, SpaceX has received more than $22 billion in contracts from the US Defense Department and space agency NASA.

If Trump were to terminate the contracts, it would have a huge financial impact on SpaceX and disrupt the US government’s space ambitions.

SpaceX’s Crew Dragon is currently the only US spacecraft certified to carry crew to the International Space Station (ISS).

Any ending of Pentagon contracts involving Musk’s Starlink satellite internet service would also be a lose-lose for both Musk and the government.

Starlink provides broadband services to rural areas. Terminals are also deployed on US military bases, ships, aircraft, and armored vehicles. The satellite internet service is often used for disaster response.

Edited by: Uwe Hessler

Will Musk’s explosive row with Trump help or harm his businesses?

18 hours ago Share Save Lily Jamali North America technology correspondent Share Save

Getty Images

When Elon Musk recently announced that he was stepping back from politics, investors hoped that would mean he would step up his involvement in the many tech firms he runs. His explosive row with US President Donald Trump – and the very public airing of his dirty White House laundry – suggests Musk’s changing priorities might not quite be the salve they had been hoping for. Instead of Musk retreating somewhat from the public eye and focusing on boosting the fortunes of Tesla and his other enterprises, he now finds himself being threatened with a boycott from one of his main customers – Trump’s federal government.

Tesla shares were sent into freefall on Thursday – falling 14% – as he sounded off about Trump on social media. They rebounded a little on Friday following some indications tempers were cooling. Even so, for the investors and analysts who, for months, had made clear they wanted Musk off his phone and back at work, the situation is far from ideal.

Watch: Did Elon Musk really win the election for Trump?

‘They’re way behind’

Some argue, though, that the problems for Musk’s businesses run much deeper than this spat – and the controversial role in the Trump administration it has brought a spectacular end to. For veteran tech journalist Kara Swisher, this is especially so for Tesla. “Tesla’s finished,” she told the BBC on the sidelines of the San Francisco Media Summit early this week. “It was a great car company. They could compete in the autonomous taxi space but they’re way behind.”

Tesla has long attempted to play catch-up against rival Waymo, owned by Google’s parent, Alphabet, whose driverless taxis have traversed the streets of San Francisco for years – and now operate in several more cities. This month, Musk is supposed to be overseeing Tesla’s launch of a batch of autonomous robo-taxis in Austin, Texas. He posted on X last week that the electric vehicle maker had been testing the Model Y with no drivers on board. “I believe 90% of the future value of Tesla is going to be autonomous and robotics,” Wedbush Securities analyst Dan Ives told the BBC this week, adding that the Austin launch would be “a watershed moment”. “The first task at hand is ensuring the autonomous vision gets off to a phenomenal start,” he added. Who is Elon Musk?

How the Trump-Musk feud erupted But with Musk’s attention divided, the project’s odds of success would appear to have lengthened. And there’s something else to factor in too: Musk’s own motivation. The talk in Silicon Valley lately centres less on whether Musk can turn things around and more on whether he even cares. “He’s a really powerful person when he’s focused on something,” said Ross Gerber, President and CEO of Gerber Kawasaki Wealth and Investment Management. “Before, it was about proving to the world that he would make EVs – the tech that nobody else could do. It was about proving he could make rockets. He had a lot to prove.” A longtime Tesla investor, Mr Gerber has soured on the stock and has been paring back his holdings since Musk’s foray into right-wing politics. He called Thursday an “extremely painful day”. “It’s the dumbest thing you could possibly do to think that you have more power than the president of the United States,” Mr Gerber said, referring to Musk’s social media tirade against Trump. The BBC contacted X, Tesla, and SpaceX seeking comment but did not receive a response.

Watch: What’s happening with Trump’s Tesla parked at White House?

The Tesla takedown

A particular problem for Musk is that, before he seemingly created an enemy in Trump, he already had one in the grassroots social media campaign against his car-maker. Protests, collectively dubbed #TeslaTakedown, have played out across the country every weekend since Trump took office. In April, Tesla reported a 20% drop in car sales for the first three months of the year. Profits plunged more than 70%, and the share price went down with it. “He should not be deciding the fate of our democracy by disassembling our government piece by piece. It’s not right,” protestor Linda Koistinen told me at a demonstration outside a Berkeley, California Tesla dealership in February. Ms Koistinen said she wanted to make a “visible stand” against Musk personally. “Ultimately it’s not about the tech or the Tesla corporation,” said Joan Donovan, a prominent disinformation researcher who co-organised the #TeslaTakedown protests on social media. “It’s about the way in which the stock of Tesla has been able to be weaponised against the people and it has put Musk in such a position to have an incredible amount of power with no transparency.” Another aspect of Musk’s empire that has raised the ire of his detractors is X, the social media platform once known as Twitter. “He bought Twitter so that he had clout and would be able to – at the drop of a hat – reach hundreds of millions of people,” Ms Donovan said.

Getty Images An anti-Musk protest in London

The personal brand

There is another possibility here though. Could Musk’s high-profile falling out with Trump help rehabilitate him in the eyes of people who turned against him because of his previous closeness to the president? Patrick Moorhead, chief analyst at Moor Insights & Strategy, thinks it could. “We’re a very forgiving country,” he said. “These things take time,” Mr Moorhead acknowledged, but “it’s not unprecedented”. Ms Swisher likened Musk’s personal brand to that of Microsoft co-founder Bill Gates more than two decades ago. She said Gates was once regarded as “the Darth Vader of Silicon Valley” because of his “arrogant and rude” personality. Today, despite his flaws, Gates has largely rehabilitated his image. “He learned. He grew up. People can change,” Ms Swisher said, even though Musk is “clearly troubled”.

Space exit

Elon Musk, the world’s richest man, faces the risk of losing billions due to a dispute with former President Donald Trump. This clash could jeopardize Tesla’s self-driving cars, SpaceX’s NASA missions, and Starlink’s international contracts, as well as prompt advertisers to leave Musk’s social media platform X.

The conflict complicates an already precarious situation for Tesla, which is planning a major roll-out of its driverless taxis in Austin, Texas. The feud threatens the company’s reliance on government contracts and regulatory credits, crucial aspects of Musk’s business empire. Analysts express concern over Trump’s potential influence on federal safety regulations and carbon credit policies, which could impair Tesla’s expansion.

The tension extends to other Musk ventures, such as SpaceX and Starlink. Trump suggested cutting government contracts for SpaceX, a major supplier of NASA services. Meanwhile, Starlink’s dealings in countries like India may feel the impact of the political friction. The unfolding situation holds significant implications for the tech industry and Musk’s business endeavors.

(With inputs from agencies.)