Tesla Rebounds After Musk-Trump Feud Shocks Wall Street—What’s Next for EV Stocks?
Tesla’s share price whipsawed after a fiery standoff between Elon Musk and Donald Trump. Here’s why experts say the drama isn’t over yet.
- Tesla plunged 14% in a single day—the steepest drop since March 2025.
- Pre-market bounce: Tesla rebounded 4.5% early Friday.
- Market cap fell below $1 trillion—first time in months.
The tech world witnessed high drama as war words erupted between Tesla CEO Elon Musk and President Donald Trump, catapulting Tesla stock into a frenzy that left investors gasping. The public spat sent shares plummeting, only to see a rapid rebound that has the financial world glued to the ticker.
Even before Wall Street’s opening bell, Tesla shares surged back after Thursday’s wipeout, triggered by Musk’s scathing criticism of President Trump’s “Big Beautiful Bill”—a major spending plan that phases out crucial electric vehicle (EV) tax credits. Tesla, long seen as the bellwether of the EV revolution, suddenly found its fortunes battered by a tweetstorm from its own CEO.
Analysts tried to steady jittery nerves, declaring the selloff overblown. With Tesla now trading well below the closely watched $1 trillion valuation mark, all eyes are on what happens next, as the rivalry between two of America’s most headline-grabbing figures heats up.
Q: Why Did Tesla Stock Tumble 14%?
The market rout kicked off after Elon Musk slammed the president’s flagship bill, accusing it of fiscal recklessness. Trump, refusing to back down, alleged Musk was frustrated over expiring EV subsidies—direct lifelines for Tesla buyers.
Legal threats soon followed. Trump vowed to cancel federal contracts with Musk’s portfolio companies—from SpaceX to Tesla—claiming it would save taxpayers “billions.”
Wall Street panicked. Investors fled, fearing an ugly political standoff could strangle Tesla’s growth and federal funding.
How Did Tesla Bounce Back So Quickly?
Only hours after its brutal sell-off, Tesla recouped nearly 5%. Veteran analysts from Fox Business and Wedbush Securities signaled confidence, arguing the dispute was more spectacle than substance. They believe both leaders have too much at stake: Musk championing America’s EV sector, Trump relying on innovation-driven jobs for the economy.
That uneasy alliance explains why Tesla’s volatility attracts global headlines—and why a swift recovery is possible once tempers cool.
Q: What Does This Mean for the Future of EV Stocks?
Even as electric cars become everyday sights—2025 could see 30% of all US vehicles sold as electric, according to Bloomberg—policy wrangling in Washington can spark sudden shocks. If Tesla loses its edge in federal favor, rivals like Ford or GM may pounce.
But with the EV race heating up and battery innovations emerging, Tesla’s destiny will rest as much on boardroom drama as on battery chemistry.
How Should Investors React?
Don’t get swept up by headlines alone. Experts urge:
– Track policy changes on EV tax credits.
– Watch for further federal contract announcements.
– Monitor Musk-Trump public statements for escalation or reconciliation.
– Diversify EV holdings—Tesla remains king, but nimble competitors are gaining ground.
Ready for the next move in the EV stock game? Stay alert with this quick-action checklist:
- Check Tesla’s daily price swings and market cap status.
- Follow regulatory changes affecting EV credits and contracts.
- Compare quarterly earnings from major automakers.
- Watch for reconciliatory signals or new feuds online from Musk and Trump.
- Balance your EV portfolio—don’t bet on headlines alone.
Stay tuned to financial news and prepare to shift gears—the next chapter in the Musk-Trump saga could reshape the entire electric vehicle revolution.