Tesla stock down 27% in 2025: can Musk’s feud with Trump trigger a brand collapse?

Tesla’s shares have tumbled nearly 27% this year amid a public feud between CEO Elon Musk and President Trump, raising alarms over the company’s brand perception and consumer confidence. This report explores how Musk’s political clashes and declining EV sales in key markets like Europe and China could threaten Tesla’s market dominance and future growth.

Sources:
ReutersScientificamericanInvesting+2
Updated 37m ago
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Sources: ReutersFinanceFool
Tesla's stock plummeted nearly 27% in 2025, largely due to a highly publicized feud between CEO Elon Musk and former President Donald Trump. The clash escalated on social media and in public statements, with Trump threatening to cut government contracts and subsidies critical to Musk's companies, including SpaceX.

The dispute has had a tangible impact on Tesla's market value, wiping out over $150 billion in shareholder wealth in a single session. Tesla shares experienced a 14% drop in one day, contributing to the overall decline.

Musk criticized a recent spending bill that threatens to add trillions to the national debt and eliminate electric vehicle tax credits, which are vital incentives for Tesla's sales. This legislative threat compounds challenges as Tesla's global sales fell 13% in Q1 2025, with even steeper declines in key markets like Europe and China.

Political strategist Evan Roth Smith warned that Musk's alienation of Republicans leaves Tesla vulnerable, with no political allies to support consumer sentiment. This dynamic raises concerns about a potential collapse in brand perception.

Despite some recovery in Tesla's stock following signs of a truce, the feud's long-term effects on government contracts, subsidies, and consumer confidence remain uncertain. The situation underscores the risks when corporate leadership becomes entangled in high-profile political conflicts.

"With Musk alienating Republicans, there is no one left to prop up consumer sentiment towards Tesla, which could lead towards a full-scale collapse in brand perception," said Evan Roth Smith, co-founder of Slingshot Strategies.

Tesla's reliance on government incentives and contracts, combined with the ongoing political feud, poses significant challenges for the company's future growth and stability.
Sources: ReutersFinanceFool
Tesla stock plunged 27% in 2025 amid a public feud between CEO Elon Musk and former President Donald Trump, wiping out over $150 billion in market value. The clash, involving threats to government contracts and elimination of EV tax credits, raises concerns about Tesla's brand and sales decline globally.
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With Musk alienating Republicans, there is no one left to prop up consumer sentiment towards Tesla, which could lead towards a full-scale collapse in brand perception.
Evan Roth Smith
political strategist and co-founder of Slingshot Strategies
Reuters
Key Facts
  • Trump publicly feuded with Elon Musk, criticizing him and threatening to terminate SpaceX government contracts and subsidies worth hundreds of millions.Reuters
  • Tesla shares plunged more than 14% in one session, wiping out over $150 billion in market value amid the feud between Musk and Trump.ReutersInvestingFinance
  • Musk criticized a spending bill that would add trillions to the national debt and eliminate EV tax credits, which are crucial government incentives for Tesla.Finance
  • Tesla's global EV sales declined 13% in Q1 2025 from a year earlier, with sharper drops in Europe and China despite overall EV market growth.Fool
  • Tesla shares partially recovered, rising nearly 4% after the steep fall, but the truce between Trump and Musk remained uncertain.ReutersFinance
  • The S&P 500 rallied past 6,000 as investor hopes grew for a cooldown in the acrimonious feud between President Trump and Elon Musk.
  • Tesla stock is down 26.9% year-to-date, with concerns about brand perception and consumer sentiment amid Musk alienating Republicans.Reuters
Key Stats at a Glance
Tesla stock plunge in one session
14%
Investing
Market value wiped out in Tesla shares
$150 billion
Finance
Tesla global EV sales decline in Q1 2025
13%
Fool
Tesla shares partial recovery after steep fall
4%
Reuters
Market value wiped out in previous session
$152 billion
Reuters
Tesla stock year-to-date decline
26.9%
Reuters
S&P 500 index level
6000 points
Finance

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