Trump Backs Musk’s Tesla Amid Stock Plunge: What This Means for Investors

NEW YORK (AP) — President Donald Trump surprised many when he voiced support for Elon Musk’s Tesla on social media, despite their past disagreements. On Truth Social, Trump said he wants Musk and all businesses in the country to succeed.

However, this endorsement couldn’t lift Tesla’s stock. After announcing disappointing financial results, shares fell by 8.2%, marking over a 24% decline this year. In the most recent quarter, Tesla reported a 12% drop in revenue and a 16% fall in profit. Some buyers seem put off by Musk’s recent political moves, while competition in Europe and China grows.

Investors are concerned about Musk’s turbulent relationship with Trump, especially since the president hinted at withdrawing government contracts and subsidies that benefit Tesla. Yet, Trump adopted a more positive stance recently, stating that he believes in the success of Musk’s companies and that it would ultimately benefit the nation.

Following the recent budget bill, Tesla may lose the $7,500 tax credit for electric vehicles and face additional costs due to tariffs imposed by Trump on imports from countries like China and Mexico.

Musk criticized the budget, calling it a “disgusting abomination” and even hinted at creating a new political party. During a recent earnings call, he warned of tough times ahead, as Tesla shifts focus from selling cars to providing ride services using self-driving technology.

The company is rolling out a paid robotaxi service in Austin, Texas, and aims to expand it to other cities soon. Musk projected that by the end of this year, half of the U.S. population could have access to these driverless rides, contingent on regulatory approvals.

Musk acknowledged the transition could lead to challenging financial periods. He believes that by the second half of next year, as autonomous driving becomes more widespread, Tesla’s financial situation will improve significantly.

As the landscape for electric vehicles evolves, Tesla must navigate both internal changes and external challenges. Stakeholders are watching closely to see how Musk adapts to these pressures while aiming for innovation in the automotive and robotics sectors.

If you’re interested in more insights on electric vehicles, consider visiting the International Energy Agency’s report on the global electric vehicle market here.

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