Shares of Tesla Inc. declined 4.78% during Tuesday’s pre-market session. This sudden drop came after CEO Elon Musk reignited political comeback rumors following his criticism of President Donald Trump‘s spending bill.
What Happened
Late Monday, Musk expressed his disapproval of the spending bill on social media platform X. He stated, “If this insane spending bill passes, the America Party will be formed the next day.” Musk criticized the existing political system, calling for alternative parties to give Americans a voice.
Musk’s Criticism
Musk’s criticism of the bill extends to both Republicans and Democrats. He claims the bill would increase the U.S. debt ceiling by $5 trillion. Musk also warned politicians supporting the bill that they would lose their primaries next year.
Response from President Trump
President Trump responded to Musk’s criticism by suggesting that the Tesla CEO’s empire relies heavily on federal subsidies. Trump stated, “Elon may get more subsidy than any human being in history, by far, and without subsidies, Elon would probably have to close up shop and head back home to South Africa.”
Tesla’s Sales Woes
Additionally, Tesla saw a significant decline in vehicle registrations in Denmark and Sweden during June, with a drop of over 60%. This decline comes after the company witnessed strong sales in Norway.
Why It Matters
The spending bill and proposed cuts have been criticized by experts and could impact Tesla and the broader automotive industry’s EV push. The bill proposes axing the $7,500 federal EV credit on all new EVs sold in the U.S.
Investor Warnings
Investor Gary Black warned that Tesla’s Q2 deliveries could fall short of estimates, potentially due to the political controversy surrounding the spending bill. Furthermore, Tesla’s sales in Canada have reportedly dropped to nearly zero, according to researcher Troy Teslike. Teslike expects Tesla may start reporting GAAP losses from Q1 2026, possibly due to the political controversy and proposed cuts in the spending bill.
Key Points to Consider
- Tesla’s shares declined 4.78% in pre-market trading on Tuesday
- Musk’s criticism of the spending bill and proposed cuts could impact Tesla and the broader automotive industry
- Investor warnings suggest Tesla’s Q2 deliveries may fall short of estimates
- Tesla’s sales in Canada have reportedly dropped to nearly zero
- The company may start reporting GAAP losses from Q1 2026 due to political controversy and proposed cuts.