Elon Musk's Rift with Trump Sends Tesla into Market Turbulence

Elon Musk's criticism of President Trump's tax legislation has strained their relationship, affecting Tesla's market position. Musk's objections to the budget bill, particularly regarding EV subsidies, have caused Tesla shares to decline. His distancing from the White House has contributed to market volatility for Tesla.

Elon Musk, the CEO of Tesla, known for his alignment with President Donald Trump, has recently ramped up his criticism of the president's tax legislation. This escalation has caught investors' attention, especially as Tesla shares fell by about 5% on an otherwise uneventful trading day for the company, raising speculation about potential strains in Musk's ties with Trump.

The controversy revolves around a proposed budget bill that seeks to end a $7,500 electric vehicle subsidy by 2025. Musk, a major GOP donor, has publicly denounced the bill as an "abomination," reflecting his frustration with losing government support. This sentiment has resonated with shareholders and potential Tesla buyers, affecting sales in several key markets.

As Musk distances himself from his once-close relationship with the White House, his political stances have started to impact Tesla's stock, which has dropped 22% year-to-date. Although Tesla remains the world's most valuable automaker, market reactions suggest significant challenges ahead, particularly concerning legislative changes in EV incentives.

(With inputs from agencies.)