Tesla Stock Plummets Amidst Policy Concerns and Presidential Remarks
Electric automaker faces market volatility as CEO cites “difficult quarters” ahead.
Tesla’s market valuation took a significant hit at the opening bell Thursday, following a stark warning from the company regarding potential revenue impacts stemming from U.S. trade policies. This downturn occurred even as President **Donald Trump** expressed a desire for the company’s founder, **Elon Musk**, to see his ventures “flourishing.”
Market Reaction to Tesla’s Outlook
The electric vehicle manufacturer’s shares experienced a steep decline of 8.5% on Thursday morning. This drop contributes to a broader loss of approximately 35% from their mid-December peak, a slump that followed the company’s announcement of a more than 20% decrease in its second-quarter profits.
Policy Impact on Tesla’s Earnings
Tesla has directly attributed the anticipated revenue hit to the trade policies initiated by President **Trump**, particularly those affecting electric vehicles within his legislative agenda. This situation comes as the U.S. government faces scrutiny over the impact of tariffs on imported goods, which can affect manufacturing costs and consumer prices.
“We are in a transitional period in which we will lose many incentives in the United States. We probably expect a few difficult quarterly.”
—Elon Musk, CEO
Presidential Response to Business Concerns
In a public statement made on his Truth Social platform, President **Trump** conveyed his support for **Musk** and American businesses.
Everyone claims I will destroy the Ilon companies by taking away some or even all the large -scale subsidies it receives from the US government, “The president said. “That’s not true!
— Donald J. Trump (@realDonaldTrump) August 10, 2023
President **Trump** also addressed claims that he intended to undermine **Musk**’s companies by reducing government subsidies.
“Everyone claims that I will destroy the Ilon companies by taking away some or even all the large -scale subsidies it receives from the US government. That’s not true!”
—Donald Trump, President
Shifting Relationship Dynamics
The recent public exchange highlights a noticeable shift in the relationship between **Musk** and **Trump**, which was once characterized by close ties during **Trump**’s early presidency. Over recent months, their interactions have reportedly become more strained.
This situation mirrors broader trends in the automotive industry, where the transition to electric vehicles is creating both opportunities and challenges. For instance, in 2023, global electric vehicle sales were projected to reach 14 million units, a significant increase that nonetheless comes with complex regulatory and economic landscapes [Reuters, January 2024].
