From Trump dividend to Trump risk, Musk faces new reality

Proper after Donald Trump’s victory within the US presidential election, many thought Elon Musk, who had supported Trump, would profit from the new administration. There was additionally the discuss of battle of curiosity when Musk assumed cost on the Division of Authorities Effectivity (DOGE). Musk contributed a minimum of $119 million to a pro-Trump spending group, Reuters reported based mostly on federal data, and tirelessly touted the previous president on the crucial late stage of his marketing campaign. Musk’s politicking displays a wider technique to insulate his corporations from regulation or enforcement and increase their authorities assist, in accordance to Reuters interviews final yr in November with six Musk-company sources aware of his political and enterprise dealings and two authorities officers who’ve intensive interactions with Musk companies. The sources offered a uncommon view of the strategizing inside Musk’s companies to take full benefit of his deepening relationship with Trump. Musk’s enterprise pursuits – from Tesla electrical automobiles to SpaceX rockets and Neuralink mind chips – rely closely on authorities regulation, subsidies or coverage.

Nevertheless, a number of months later, as a substitute of reaping a Trump dividend, Musk has run right into a Trump threat as its chief enterprise, Tesla, has begun to really feel the warmth of the Trump administration’s insurance policies and stances.

Retaliatory tariff warmth is scaring Tesla

Tesla has warned that it and different main American exporters are uncovered to retaliatory tariffs that may very well be leveled in response to Trump’s aggressive use of tariffs. The Tesla feedback mirror these of many US companies involved by Trump’s tariffs, however is notable as a result of it’s from Tesla.

The feedback had been made in a letter to the US Commerce Consultant’s Workplace and out there on the workplace’s site dated Tuesday, Reuters reported. It’s amongst lots of despatched by corporations to the workplace about US commerce coverage. It isn’t clear who at Tesla wrote the letter, which is unsigned however is on an organization letterhead. Tesla didn’t instantly reply to a Reuter’s request for a remark. Tesla says it will be important to be sure that the Trump administration’s efforts to handle commerce points “don’t inadvertently hurt US corporations.”

It says it’s keen to keep away from retaliation of the kind it confronted in prior commerce disputes, which resulted in elevated tariffs on electrical automobiles imported into international locations topic to U.S. tariffs. Trump is contemplating imposing vital tariffs on automobiles and elements made world wide in early April.

Tesla warns that even with aggressive localization of the provision chain, “sure elements and elements are troublesome or inconceivable to supply inside the USA.”
The automaker provides that corporations will “profit from a phased method that allows them to put together accordingly and guarantee applicable provide chain and compliance measures are taken.”

“As a U.S. producer and exporter, Tesla encourages USTR to take into account the downstream impacts of sure proposed actions taken to handle unfair commerce practices,” the EV maker says.

Can Tesla survive the Trump storm?

Tesla is going through penalties of its CEO’s arduous sup[port for Trump and his radical position in Trump administration to reduce waste and lay off employees. Tesla CEO Elon Musk appeared on the verge of tears throughout a current Fox Enterprise interview, visibly distressed as he mentioned the mounting challenges going through his corporations. Talking with Larry Kudlow, Musk admitted that managing a number of companies had grow to be “extraordinarily troublesome”, as Tesla’s inventory plunged 15.4%, marking its greatest drop since September 2020. In the meantime, X (previously Twitter) continued to wrestle with technical and operational setbacks. The worldwide slowdown in electrical car (EV) demand has additional intensified Tesla’s troubles.

A wave of protests in opposition to Tesla, some peaceable and others involving acts of vandalism and arson, not too long ago erupted throughout the US and past. Tesla showrooms, charging stations, and automobiles had been focused in a number of places. On March 9, 4 Tesla Cybertrucks had been broken throughout a hearth at a Seattle facility.

Past U.S. borders, 12 Tesla vehicles had been torched in Toulouse, France, on March 2, and a Berlin-area Tesla manufacturing facility was set on hearth on March 5, with a far-left group claiming duty. In the meantime, a grassroots initiative known as “Tesla Takedown”, spearheaded by actor Alex Winter, has organized peaceable protests encouraging folks to abandon Tesla merchandise and inventory. Musk has indicated with out proof that billionaires like George Soros and Reid Hoffman are behind the protests.

A current Morgan Stanley investor survey has despatched shockwaves by means of the market. A staggering 85% of respondents consider Elon Musk’s political actions are damaging Tesla’s enterprise fundamentals. This sentiment, captured in a survey performed on March 11, 2025, amongst 245 traders, displays rising unease concerning the firm’s future .

One of many greatest issues highlighted within the survey is the decline in Tesla’s car deliveries. The numbers inform a troubling story: 59% of respondents foresee a year-over-year drop in Tesla’s 2025 deliveries; and a mere 19% anticipate any progress; 21% predict a double-digit decline of over 10% y/y. This can be a stark distinction to the optimism seen in January 2025, when investor sentiment was way more bullish. Now, issues over slowing demand, market saturation, and inner challenges dominate the dialog.

Wedbush know-how analyst Dan Ives, who has been Tesla’s greatest cheerleader for years, has now sounded the alarm over CEO Musk’s growing forays into politics and different enterprise pursuits seem to be hurting the corporate, in accordance to a report.

In a letter to Tesla shareholders, Ives, who has had an “outperform” ranking on the inventory for years, cautioned that traders’ persistence is “carrying very skinny,” Fortune reported. His warning comes as Musk’s focus appears cut up, together with his consideration extra on the Trump administration’s DOGE, whereas Tesla struggles with protests, vandalized shops, and prospects promoting their vehicles, in accordance to Fortune. Ives, usually bullish on Tesla’s prospects, drew a darker image in his most up-to-date evaluation. He highlighted that Musk has not been as seen at Tesla’s core operations in a troublesome interval for the corporate. Ives mentioned, “A second of fact is forward for Musk and Tesla, and the way Musk handles the subsequent few months can be crucial,” as quoted by Fortune.

Tesla shareholders need Musk to stability his time and present that he’s Tesla’s CEO, Fortune reported. Ives additionally talked about that, “This isn’t the time to simply play within the DOGE sandbox. He wants to step up,” as quoted within the report.

Tesla traders cheered as Trump got here to the protection of Musk’s carmaker by shopping for a Tesla automobile and showcasing 5 Teslas lined up within the White Home driveway. The Tesla inventory ended up closing up almost 4% after one of many worst single day sell-offs in Tesla’s historical past a day earlier.

However specialists warn the weird presidential backing of a personal firm might backfire. “Tesla is changing into a political image of Trump and DOGE, and that could be a dangerous factor for the model,” Ives informed AP. “You assume it’s serving to, nevertheless it’s really hurting.”

Tesla shares have plummeted 45% in 2025 and on Monday tumbled greater than 15% to $222.15, the bottom since late October, reflecting newfound pessimism as gross sales crater across the globe.

(With inputs from companies)