Tesla shares experienced a 7% decline following a renewed feud between CEO Elon Musk and former President Trump. Musk announced the formation of a third political party in response to a controversial Republican spending bill that he criticized for hindering job growth. Investors are concerned that ongoing tensions with Trump could negatively affect Musk's ventures, particularly given Tesla's volatile share performance and declining sales, which fell 13% for two consecutive quarters. Meanwhile, competition from emerging electric vehicle manufacturers, particularly from China, exacerbates Tesla’s challenges in the market.
Shares of Tesla tumbled 7% Monday as the feud between CEO Elon Musk and Trump reignited over the weekend, with Musk forming a third political party in protest of the Republican spending bill. Investors fear that Musk's companies could suffer if his feud with Trump continues, as the political battle could create hurdles for Musk's ventures heading into the mid-terms in 2026. Tesla has seen a 13% plunge in sales for two quarters, linked to Musk's controversial political affiliations and growing competition from global automakers.
Tesla shares have been extremely volatile since Musk's political engagement, with competition from companies like BYD and Great Wall intensifying. The rising affiliation with Trump and far-right parties has reportedly impacted Tesla's sales, causing a significant drop in shares since last December. Analysts note that Musk's political decisions may not align well with the company's long-term market potential, particularly as the electric vehicle market expands rapidly with new competitors.
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