Tesla’s shares took a beating in recent months after a public spat between CEO Elon Musk and former President Donald Trump escalated. Wall Street has recently begun worrying that autonomous vehicles may have hit a dead end in the U.S. It is no surprise then that Trump’s comments have fed these concerns.
At the heart of the struggle is the former president’s proposal to wield federal authority against Musk’s firm. Under the hood, he’s especially interested in how government subsidies and contracts work. Recently, investors have been ringing the alarm. They’re worried that under Trump, the federal government won’t be focused on advancing self-driving car technology—key to Tesla’s long-term business plan.
Even more telling, according to Dan Ives, a popular Wall Street analyst, was the increasing angst that bubbled up from the investment community. So, Reynolds warned, under a President Trump don’t expect an autonomy-friendly environment. This speaks to the increasing jitteriness when it comes to Tesla’s long-term market prospects.
Buried deep in Trump’s remarks was a far more direct threat to Tesla’s financial lifeline from the federal government. As Trump explained, “The quickest & simplest way to save money in our budget is to cancel Elon’s taxpayer-funded contracts & subsidies. That would save us tens of billions of dollars immediately. This offhand comment has led to all sorts of conjecture regarding the former president’s plans. Or he can take a tough line on Musk, undercutting all of Tesla’s hopes and ambitions.
Musk’s braggadocious interview rambles on about his alleged relationship with Trump. He claims the previous president could not have accomplished electoral triumph without his support. This one short statement provides a lot of insight into the complicated relationship between the two men. It further highlights the potential impact of their continued turf war.
Investors are particularly anxious about how Trump’s possible actions could impact Tesla, given that a large part of the company’s future growth is tied to advancements in autonomous vehicle technology. If Trump follows through on his threats, it would be a serious blow to Tesla’s innovation. This could negatively impact their international competitiveness in the rapidly growing global automotive market.
