Trump's Sudden Musk Endorsement Fails to Stem Tesla's 9% Stock Plunge After Weak Earnings

President Donald Trump made an unexpected pivot on Truth Social Thursday, publicly endorsing Elon Musk and his ventures, including Tesla, as the electric vehicle maker’s stock plummeted nearly 9% following weak earnings. “I want Elon, and all businesses within our Country, to THRIVE,” Trump wrote, countering earlier threats to curtail federal subsidies for Musk’s companies. His comments sought to reassure investors amid speculation that his administration’s policies, including the recently passed budget bill, could strip Tesla of critical financial incentives like the $7,500 EV tax credit and regulatory credit sales [1].

Tesla’s Q2 financial results underscored the challenges: revenue dropped 12%, and profits fell 16% year-over-year. The company attributed the decline to waning consumer interest amid Musk’s controversial political statements and intensifying competition in Europe and China. Musk, meanwhile, has criticized Trump’s budget as a “disgusting abomination,” warning it exacerbates national debt and vowing to launch a new political party if necessary [2]. Despite Trump’s pro-business rhetoric, the stock’s decline persisted, reflecting investor skepticism about the sustainability of his support.

The ’s remarks followed weeks of volatility. Earlier, he had threatened to end government contracts for Musk’s businesses, spooking markets and prompting Tesla to warn of “rough quarters” ahead as it transitions from car sales to autonomous ride-hailing and robotics. While Musk expressed optimism about future projects like robotaxis—set to expand to half the U.S. population by year-end—analysts noted these ventures are years from profitability [3]. Trump’s shift to a pro-business tone, however, appears reactive rather than strategic. Market participants remain wary of his policy reversals, with some analysts labeling Tesla, Rivian, and Virgin Galactic as potential casualties of his evolving stance [4].

The episode highlights the fragile interplay between political rhetoric and stock valuations. Trump’s initial threats had already eroded investor confidence, and his sudden endorsement, while intended to stabilize sentiment, arrived after Tesla’s earnings had already triggered a sell-off. This underscores the broader risks for high-profile tech firms navigating polarized political landscapes. Yet, Trump’s emphasis on economic collaboration aligns with his campaign narrative of championing American business, potentially signaling long-term support if his policies prioritize deregulation over direct intervention [5].

Source: [1] [Trump Wants Elon Musk to Thrive: Earnings, Tesla](https://fortune.com/2025/07/24/trump-wants-elon-musk-to-thrive-earnings-tesla/) [2] [Trump Says He Wants Elon Musk to Thrive](https://www.tipranks.com/news/the-fly/trump-says-he-wants-elon-musk-to-thrive-thefly) [3] [Trump Pledges Elon Will 'Thrive Like Never Before'](https://www.tipranks.com/news/trump-pledges-elon-will-thrive-like-never-before-after-subpar-tesla-results) [4] [Stock Market Today: Dow Opens Lower; Trade Talks, Tesla](https://www.wsj.com/livecoverage/stock-market-today-dow-sp500-nasdaq-07-24-2025?gaa_at=eafs&gaa_n=ASWzDAgxmd3w_3DHZ36ubhZHR0jWmxJdUiIsMpQ4OLnZ-2JPKPbqL-8Zs1GW&gaa_sig=4QVa0pPFFFkziETKVUrDDLIMNcK9JCu4-4leRSBVCeQaQOYeozQmH4YZ7SnSK4TCOVIif7GYmImJHcdzBuA7Gg%3D%3D&gaa_ts=688274fb) [5] [Trump Backs Musk as Tesla Stock Slides](https://fortune.com/section/magazine/)