Tesla’s Dependence on Elon Musk Leads to Its Decline

Tesla’s stock has lost 20% of its value in 48 hours amid highly publicized disputes between Elon Musk and Donald Trump.

Tesla’s stock has been in free fall for two days, not due to financial or industrial results, but following a highly publicized conflict between Elon Musk and Donald Trump. This quarrel marks, according to many investors, the end of an era where Tesla’s market valuation incorporated a political factor.

For several months, Tesla’s stock trajectory had been heavily influenced by the ties between Musk and Trump, despite the latter’s openly anti-electric vehicle positions. Musk had supported Trump’s campaign, with donations estimated in the hundreds of millions of dollars, in hopes of gaining regulatory advantages. He even accepted a role in DOGE, a pseudo-department called the “Department of Government Efficiency,” with no real power other than to cause nuisance.

Trump’s victory had sparked a surge in Tesla’s stock, driven by speculation of preferential treatment. But enthusiasm quickly faded due to the economic consequences of Trumpist policies: destructive tariffs, withdrawal of tax credits for electric vehicles (which Tesla had supported), and above all, a severely tarnished brand image.

The breaking point between the two men was reached when Musk publicly opposed the new Republican budget, which he accused of massively worsening the American deficit. Trump retaliated by threatening to cut federal subsidies to SpaceX, to which Musk responded by promising to disable the Dragon capsule, essential for NASA’s space missions. The exchange escalated on X, leading to personal accusations from Elon Musk linking Donald Trump to Jeffrey Epstein.

For the markets, this dispute illustrates Tesla’s vulnerability to the whims of its CEO. For the past year, Musk seems more concerned with his other companies and his controversial political stances than with managing Tesla. The result: a drop in sales, loss of customers, protests, and now, stock market collapse.

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