Tesla Stock Drops 4.55% Amid Musk's Political Criticism

Tesla Inc. shares experienced a notable decline of 4.55% during Tuesday's pre-market trading session, with the stock price currently standing at $303.22. This drop comes on the heels of CEO Elon Musk's public criticism of President Donald Trump's spending bill, which has reignited speculation about Musk's potential political ambitions.

Musk took to the social media platform X to express his disapproval of the spending bill, stating that if the bill passes, a new political party, the "America Party," would be formed the next day. He criticized both Republicans and Democrats for supporting the bill, which he claims would increase the U.S. debt ceiling by $5 trillion. Musk also warned that politicians backing the bill could face primary losses in the upcoming elections.

President Trump responded to Musk's criticism by highlighting Tesla's reliance on federal subsidies. Trump suggested that without these subsidies, Tesla might face significant challenges, potentially leading to the closure of its operations and Musk's return to South Africa.

In addition to the political controversy, Tesla's vehicle registrations in Denmark and Sweden saw a significant drop of over 60% in June, following strong sales in Norway. This decline in registrations could be attributed to various factors, including changes in consumer preferences and market dynamics.

The spending bill, which includes proposed cuts, has been a subject of criticism from experts. The bill's potential impact on the broader automotive industry's electric vehicle (EV) push is a concern, as it proposes eliminating the $7,500 federal EV credit for all new EVs sold in the U.S. This could affect Tesla's sales and market position, as well as the overall EV market.

Investor Gary Black has warned that Tesla's Q2 deliveries might fall short of estimates, potentially due to the political controversy surrounding the spending bill. Additionally, researcher Troy Teslike has highlighted that Tesla's sales in Canada have reportedly dropped to nearly zero. Teslike also suggested that Tesla may start reporting GAAP losses from Q1 2026, possibly due to the political controversy and the proposed cuts in the spending bill.

The political controversy and the potential impact of the spending bill on Tesla's operations and market position have raised concerns among investors and analysts. The decline in Tesla's stock price during the pre-market trading session reflects these concerns and the uncertainty surrounding the company's future prospects.