The news: Tesla stock rebounded about 3.7% Friday after a 14.3% crash during a public social media feud between President Donald Trump and Tesla CEO Elon Musk over the “Big Beautiful Bill.”
The EV giant lost $152.4 billion in market value Thursday—its biggest one-day decline ever, per The Wall Street Journal.
The stakes: The Big Beautiful Bill is currently under consideration in the Senate. It would accelerate the phase-out of former President Joe Biden’s EV credits through December 31, 2025, and add an annual fee of up to $250 for EV owners.
The end of EV credits would be a blow to Tesla at a particularly vulnerable moment—between January and April, Tesla’s EU car sales declined 46% YoY, per the European Automobile Manufacturers’ Association.
As EU sales plummet, Tesla will need to rely on maintaining strong demand in the US. Without federal incentives, consumer interest in Tesla vehicles—especially higher-priced models—may wane and dampen the company’s growth.
Overall EV interest isn’t fading: Lower EV sales are specific to Tesla, not the broader industry, indicating Musk may be harming Tesla’s brand image.
- Battery-electric car sales in the EU rose 26.4% between January and April.
- New EV registrations in Germany grew 44.9% YoY in May, but Tesla’s dropped 36.2%, per Germany’s Federal Motor Transport Authority.
Our take: The Musk-Trump quarrel could drag on or it could end as abruptly as it started. Its effects on Tesla’s stock are a reminder that Musk is the company’s de facto spokesperson and that his persona is inseparable from Tesla’s brand.
The Big Beautiful Bill, paired with cautious US consumer spending and economic uncertainty, could slow Tesla’s EV adoption just when the company can least afford it.
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