Tesla share price plunge: Musk-Trump conflict fuels uncertainty on the stock market

(dpa) Trump's criticism of subsidies for Musk's companies is causing unrest. Investors are reacting sensitively, while Musk's business model with stock loans is coming under additional pressure. The dispute also affects strategically important US projects.

The price of Tesla stock is under pressure after a publicly conducted dispute between CEO Elon Musk and US President Donald Trump has escalated. | Photo: Christophe Gateau/dpa
The price of Tesla stock is under pressure after a publicly conducted dispute between CEO Elon Musk and US President Donald Trump has escalated. | Photo: Christophe Gateau/dpa

The share of electric car manufacturer Tesla has fallen by more than 14 percent in US trading. The trigger is an escalated dispute between Tesla CEO Elon Musk and US President Donald Trump. According to Bloomberg, the decline in stock price resulted in Musk's fortune shrinking by around 34 billion US dollars, now estimated at 335 billion US dollars.

Trump threatens to withdraw subsidies

Trump had previously publicly announced that he would reconsider government subsidies and contracts for Musk's companies. This would not only affect Tesla, but also the space company SpaceX, which currently plays a central role in manned flights for NASA as well as military rocket launches.

Trigger: Dispute over fiscal policy

The background of the conflict is a dispute over the tax and budget legislation promoted by Trump. Musk had called for stronger cuts in government spending and warned about a growing budget deficit. Trump responded with the accusation that Musk merely wanted to prevent the reduction of subsidies for electric cars.

Political proximity previously supported shares

After Trump's election victory in November, Tesla's stock initially rose significantly. Investors speculated on an advantage for Tesla due to the proximity between Musk and Trump. At the same time, Musk's political statements repeatedly led to criticism and protests. In the past, there have also been arson attacks on Tesla vehicles.

Risk for Musk's Financing Model

For Musk himself, the drop in share price could also have financial consequences. The Tesla CEO uses a significant portion of his shares as collateral for loans. According to the company's current annual report, around 236 million Tesla shares are pledged as collateral. If the price falls below certain thresholds, additional margin requirements may arise.

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